Healthcare made a lot of headlines this year. But what does that mean to the healthcare industry? A while back we explained the PEST framework for understanding competitive threats. With this in mind, let’s examine a few of 2015’s top healthcare headlines as they’ll be a contributing factor into what happens in 2016 and beyond.
What political changes could threaten your business? Is there legislation that could fundamentally alter how you do business?
The big political healthcare news of 2015 was King vs. Burwell, where the Supreme Court upheld one of the main tenets of President Obama’s healthcare law. In a 6-3 ruling, millions of Americans were entitled to keep the tax subsidies that make it possible to afford health insurance. ACA supporters hailed the decision as a victory, while opponents lamented the ruling.
What economic changes could threaten your business?
Perhaps the most talked topic in healthcare was Martin Shkreli, aka the “pharma bro,” who increased the cost of a life-saving medication over 5,000 percent. This sharply brought to light the important issue of pharmaceutical price transparency, and America’s growing frustration of having to choose between paying for necessary prescriptions or other necessities.
What technological changes could threaten your business?
The first way technology threatened healthcare in 2015 was with healthcare data storage brought to light by the major cybersecurity threats that occurred in 2015, which can be attributed to advancements in digital health and the EHR. The second way was the actual advancements in medical technology. This is exemplified with the CRISPR-Cas9 gene editing technology, making headlines as the scientific “Breakthrough of the Year” with the potential to create new, powerful therapies to treat all kinds of diseases.
You might notice that the S aspect of our PEST analysis is missing. The S, or Social change, is not as apparent as the rest of the analysis, at least not in the confined view of one year. The Supreme Court can make a decision that upsets the status quo immediately. A company can change their business strategy seemingly overnight. Technology is constantly evolving. But social and demographic changes take much longer.
This is why PEST analyses are so important – the P, E, and T are what results in S. As an executive, you must use the political, economic and technological changes to prepare yourself for the social changes.
For example, improvements in healthcare technology are extending the human lifespan. What will that mean for your company as life expectancy increases and more people survive formally fatal diseases and live longer? Will data breaches cause people to be less trustful and less willing to adapt to future technology? What will that mean for your company 10 years down the road as society and demographics change?
The business of healthcare is changing right before our eyes. It is easy to adapt to a noticeably changing landscape. But that’s not enough. As professionals, you must be able to look at the bigger picture and see what relatively small changes today will expand into tomorrow.