INDUSTRY WATCH
INVESTMENT IN THE HEALTHTECH MARKET HAS BOOMED , WITH MCKINSEY REPORTING RECORD LEVELS OF US $ 5.4 BILLION IN THE FIRST SIX MONTHS OF 2020 ALONE .
Over the last year , the healthcare industry has been propelled into the spotlight like never before , as medical professionals around the world became our first line of defence against the COVID-19 pandemic . In order to ensure that patients were still able to access potentially lifesaving treatment , the industry had no choice but to adapt at scale and use modern technologies to transform the delivery of healthcare services . As a result , investment in the healthtech market has boomed , with McKinsey reporting record levels of US $ 5.4 billion in the first six months of 2020 alone .
As we enter the next chapter in the delivery of healthcare services , many of these new technologies and working practices – such as telehealth and remote appointments , for example – are here to stay . The door to innovation has been unlocked and as a result , the expectations of those delivering and receiving medical services has changed forever . Healthtech companies and healthcare providers need to ensure that they have the sustainable business models in place to support these technologies moving forward , no matter what is around the corner . One such business model is based on subscription services .
Subscribing to a healthier population
Increasingly , individuals desire the freedom to access services and use them anytime , anywhere . They also want choice in terms of how they pay , alongside the ability to pause and resume services . As a result , subscribing has become the new norm , with 78 % of international adults using subscription services today . It ’ s the End of Ownership as we know it .
The subscription business model is not just for increasing access to software and entertainment services . At its core , it ’ s all about increasing access and improving outcomes and if there ’ s one outcome that we are all striving for these days , it ’ s a healthy population . A pricing model focused only on selling units at the highest price possible – which is the current healthcare model in a lot of countries – does not successfully support this outcome . Instead , subscription-based pricing models focused on providing wider and more affordable access to disease-curing medicines could be the answer .
When used effectively , subscription models could help to drastically improve outcomes and boost the patient experience . They could even enable healthcare providers to personalise their services , whether an appointment takes place virtually or in a physical setting . This is because subscriptions enable companies to securely collect a substantial amount of usage data on each individual . By analysing this data over time , subscription companies can learn who their customers are and what they want . As a result , they can adjust their services to meet demand , encouraging longer term commitment and ensuring that their patients are receiving the best treatment possible .
Boosting resilience in the toughest times
It ’ s not just patients that are benefitting from subscription models , either . The healthtech providers that implement them are also reaping the rewards directly . Despite the challenges faced by the healthcare industry over the last year , subscription growth has remained stable .
In fact , the latest Subscription Economy Index ( SEI ) – a bi-annual report published by the Subscribed Institute – discovered that healthcare companies with recurring revenue saw some of the lowest churn rates of any industry . In other words , customer retention was strong . This underscores how vital relationships , customer-centric models and flexible access are
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