Delivery and Disruption: Navigating a Changing Care Terrain

Luke Forsthoefel, Consultant

Yakir Siegal, Managing Director

Gregory Lief, Founder and Managing Director

All with Asymmetry Group, LLC

The US healthcare system is undergoing a major shift in the way that care is delivered to patients. Healthcare provider (supply-side) and consumer (demand-side) trends are catalyzing an evolution away from traditional office-based site of care toward a more diverse set of options for where, when, and how patients interact with providers.

New entrants such as retailers and technology companies are redefining site of care and becoming increasingly prevalent, convenient, and cost-effective in their patient reach, creating new alternatives for care delivery. In addition to the proliferation of non-traditional entrants, the ongoing health system consolidation of provider practices continues, leading to greater centralization of healthcare decision-making.

On the demand side, generational differences in patient behaviors, a growing urgency to address healthcare inequities, and the expanding burden of long-term chronic disease management among older patients are creating pressures for diversification of where and how care is delivered.

The rapid evolution and diversification of care delivery models creates unique opportunities and challenges for biopharma leaders making strategic choices in their go-to-market models. Biopharma companies must consistently link patient segments to site-of-care segments, build B2B engagement capabilities, and increase organizational agility to be able to continually adapt their customer engagement models to the shifting customer landscape. In this article, we will explore in more detail both the drivers of change in care delivery models as well as the go-to-market implications for biopharma organizations.

DIVERSIFICATION IS THE NEW REALITY FOR CARE DELIVERY MODELS

Supply drivers

Both new entrants introducing innovative delivery models and the competitive pressures fueling continued consolidation within traditional healthcare channels are shifting the supply landscape for care delivery as a whole. Furthermore, an on-going occupational diaspora of physicians, reinforced by the pressures of the COVID-19 pandemic, further fuels the diversification of care delivery models.

The proliferation of alternative sites of care

Retail companies such as CVS Health and Walgreens are creating a broad range of new sites of care as they prioritize expanding their primary care footprint. CVS is growing its Minute Clinic footprint, increasing virtual care offerings, and building out HealthHubs—sites that offer a more comprehensive site-of-care offerings—with the goal to facilitate 65 billion healthcare interactions by 2030. More recently, CVS made expanding its overall primary care delivery footprint a clear strategic imperative, highlighted by the company’s $8 billion acquisition of Signify Health, a technology-enabled care delivery company with a network of more than 10,000 US-based clinicians, and its $10.8 billion acquisition of Oak Street Health, a value-based primary care company focused on care delivery in older adults. Walgreens invested $5.2 billion in VillageMD (which also comprises medical groups Summit Health and CityMD via recent acquisitions) to scale up its presence in neighborhood-based primary care. Given more than 75% of Americans live within five miles of a Walgreens and 70% live within three miles from a CVS, this expansion of retail-based sites of care will have a significant impact on access to and utilization of care through non-traditional channels.

Meanwhile, a range of companies specializing in digitally integrated care delivery such as Carbon Health, Parsley Health, and One Medical are pioneering a range of care models with turnkey offerings that better fit the needs of patients and practitioners alike. These models may range from truly remote care, to home services, to a hybrid of brick and mortar and digital health offerings. These health technology companies are playing an increasingly significant role as they expand their physician networks and capabilities—an enticing value proposition drawing in new players from big tech, such as Amazon and its $3.9 billion acquisition of One Medical.

The compounding impact of horizontal provider consolidation

With competitive pressures both from within and without the healthcare delivery industry, larger health systems have utilized consolidation to build competitive advantage. This trend has played a significant role in shaping healthcare provider employment trends in the US. As of January 2024, over half of all US physicians are employed by a hospital or health system (see Figure 1). This trend accelerated during the pandemic, as the pressures during this period made operating smaller private practices less tenable fiscally and/or operationally. According to a Physicians Advocacy Institute analysis, the number of physicians employed in independent practices declined by 41% between 2019 and 2024, by which time less than a quarter of all US physicians were employed in independent practices (see Figure 1).

Interestingly, as health system consolidation of physician practices continued through the pandemic, the number of practices owned by other corporate entities (e.g., health insurers, private equity firms, umbrella corporate entities that own multiple physician practices, etc.) nearly doubled (see Figure 2).

This shift in physician employment underscores the fluidity of the care delivery landscape as innovation and consolidation reinforce each other. While there are benefits tied to the scale of large health systems, consolidation by a health system may, somewhat ironically, have the potential to create a challenging environment for physicians to administer care. These higher administrative control health systems tend to be characterized by top-down decision-making, affecting physician autonomy and administrative duties. Data shows that physicians in large practices or health systems tend to spend more time on administrative work, which is correlated to lower career satisfaction and higher burnout.

The impact of burnout in its different forms has made employment at alternative sites of care more enticing than before, thus creating opportunities for players such as CVS, Walgreens, and many health tech companies to build physician networks and drive a wedge in the traditional model of care delivery.

The convergence of several durable and reinforcing factors, including the growth of alternative sites of care, the expanding utilization of technology-enabled channels, the economic effects of provider consolidation, and employment malaise among providers within traditional practices will continue to drive ongoing evolution and diversification of care delivery models.

Demand drivers

On the consumer side, there are three notable (albeit not exhaustive) drivers of change with respect to demand for care delivery.

1. Different attitudes and behaviors towards care delivery among younger generations who prioritize convenience and ease of access.
2. Greater recognition of healthcare disparities for underserved populations.
3. Growth in the need for chronic disease management among older generations.

Different attitudes and behaviors among younger generations

As of 2020, millennials (born 1981–1996) and Gen Z (born 1997–2012) together represent the majority age demographic (>50%) in the US. Younger generations’ behaviors, priorities, and expectations with respect to care delivery are misaligned with the offerings of traditional avenues of care. These groups prioritize convenience and ease of access and tend to be less sticky in their primary care provider (PCP) relationships than older generations. According to one survey, ~45% of Gen Z respondents indicated that they do not have a primary care physician at all.²

Prior to the pandemic, a Salesforce-Harris Poll showed that 71% of millennials would prefer providers to use mobile apps to book appointments, share health data, and manage preventative care, while 60% suggested they would support the use of telehealth options to eliminate in-person visits altogether. The pandemic accelerated this shift in attitudes and behaviors, with on-demand virtual care becoming an increasingly accepted alternative to traditional sites of care among younger demographics, as illustrated in the Harris Poll’s “The Great Awakening Survey” (see Figures 3 and 4).³

Increasing attention on reducing access barriers for underserved populations

According to the US Department of Health and Human Services, over half the US population lives in a primary care health professional shortage area, meaning their primary care medical needs are not being met.

The expanding utilization of alternative sites of care, increased technology adoption in traditional practices, and the growing ubiquity of broadband access are enabling new solutions to address disparities in access to healthcare.

The pandemic became an immediate case study by which alternative care delivery models were leveraged to support underserved populations. Telehealth adoption became integral in the response to the pandemic of community health centers, which disproportionately treat underserved populations. The number of community health centers offering virtual care increased 130% between 2019 and 2022, with a decline in no-show rates and an increase in engagement in certain groups, per the Kaiser Family Foundation.

Growing need for chronic disease management for older generations

According to the CDC, 85% of older generations live with at least one chronic condition, and 60% have at least two chronic conditions. By 2030, all Baby Boomers will be over 65 and shortly thereafter, in 2034, older adults (aged 65+) are expected to outnumber children for the first time in US history. This trend has monumental implications on both the magnitude and nature of demand for healthcare services, with increasing focus on solutions that preserve independence and quality of life for aging patients managing chronic conditions. This demand is driving a proliferation of service offerings in digital health, telehealth, remote patient monitoring (RPM), and AI-enabled chronic care management. RPM, for example, has seen exceptional growth in adoption since the pandemic, with claims volumes for 10 Centers for Medicare & Medicaid Services codes for remote monitoring growing 1,294% from January 2019 to November 2022⁵ and its 2020 US userbase of ~30 million projected to more than double by 2025.⁶ Chronic disease management will remain a substantial driver of demand for novel care delivery tools, particularly as these tools become better integrated into existing provider infrastructure and processes.

These demand trends across a broad range of patient populations reinforce the supply side dynamics discussed earlier, with both existing and new care delivery organizations vying to serve an increasingly diverse set of patient needs.

REORIENTING BIOPHARMA GO-TO-MARKET MODELS TO ADAPT

Go-to-market thinking has evolved within biopharma companies over the last several years as digital technology continues to open a broader set of customer engagement channels while advanced analytics enables greater precision in targeting and execution. However, most of the evolution in biopharma go-to-market models to date has been within the context of a customer landscape anchored in traditional physician office and health system-based care delivery models. The growing diversity of care delivery models, reinforced by the supply and demand trends discussed, necessitates more significant rethinking on how to optimize customer engagement and go-to-market models to better align to the evolving customer landscape.

Ahead, we focus on three implications borne out of the evolving care delivery landscape that biopharma leaders should consider in their go-to-market models:

1. Diversification of care delivery models necessitates greater “line of sight” specificity in linking patient segments to healthcare provider segments.
2. Growing prevalence of care delivery business models with greater centralized decision-making elevates the importance of a true business-to-business (B2B) approach to customer engagement and activation.
3. Accelerating pace of change in care delivery reinforces the need for organizational agility in go-to-market strategy and execution.

The need for ‘line of sight’ in segmentation

With patient-provider care interactions diversifying beyond traditional sites of care and into care delivery channels, such as retail, telehealth, and hybrid brick-and-mortar/technology-enabled channels, mapping target patient segments to provider segments becomes a foundational exercise for developing a go-to-market strategy. Traditional go-to-market provider segmentations tend to be developed around healthcare providers as individuals, focusing on specialty and relevant prescribing volume as a basis for identifying segments best aligned to target patient populations. However, even within a particular disease area, patient segments may show up at widely varying sites of care based on demographic, socioeconomic, and clinical factors.

A “line-of-sight” approach to link patient and provider segmentations to their unique care delivery environments helps drive appropriate go-to-market focus on the most relevant sites of care and corresponding care delivery organizations.

Consider, for example, the go-to-market strategy for a new diabetes drug. A traditional segmentation approach would likely focus on engagement with PCPs who are high prescribers of similar products. A “line-of-sight” approach would start by identifying where different subsegments of target diabetes patients are most likely to get their diabetes care and which care delivery organizations are, therefore, most critical to prioritize. How much of the target patient population is older, living at home, and likely to be receiving comprehensive care for chronic conditions through community-based care delivery organizations such as Oak Street Health? Which patient segments are gravitating toward the flexibility and convenience of managing their diabetes through technology-enabled hybrid care delivery organizations such as One Medical? And which patient segments prefer to leverage the breadth of resources of their local health system in managing their diabetes care or are more likely to have a long-standing relationship with a private practice PCP?

The optimal go-to-market strategy for the diabetes drug will very much depend on the relative skew of the target patient population with respect to where they are most likely to receive their diabetes care.

The shift to B2B engagement models

Horizontal provider consolidation and the expansion of corporate-owned care delivery entities have both resulted in a trend toward greater centralization of decision-making in care delivery. As a result, the traditional go-to-market focus on the prescriber may no longer be sufficient to drive desired behaviors. Instead, it is important now more than ever to take a B2B approach to engaging with care delivery organizations holistically as key customer accounts. In the example highlighted on go-to-market strategy for a new diabetes drug, the customer engagement approach for changing the diabetes management behaviors of prescribers will look very different for prescribers employed by Oak Street Health versus those employed by One Medical or those employed by a large, local health system.

Account-level guidance, protocols, workflow management processes, and supporting tools and technology will all have an impact on prescriber-level decision making, customer experience, and ability to deliver both clinical and business value.

Looking at analogs outside of the biopharma industry, consider Salesforce’s approach to customer engagement to better illustrate elements of a best-in-class B2B approach. Salesforce has a well-defined set of principles the company uses to guide a consistent approach to customer engagement across its customer-facing organization. Key highlights include positioning the organization as a strategic partner, being deeply data-oriented to identify and preempt issues before they occur, fostering executive relationships to build trust and align goals, focusing on quantified value drivers, ensuring customers are adequately resourced, and aligning products/services to customers’ business objectives.⁷

Leveraging this example from Salesforce, we can start to lay out a set of B2B customer engagement principles for biopharma:

• Be a partner, not a supplier. Transcend transactional engagement to focus on becoming a knowledgeable, relationship-oriented partner that supports the customer’s care delivery and business objectives.
• Think holistically about customer value. Deliver an account-specific value proposition that provides clear clinical benefit to patients, enhances the customer’s care delivery model, and creates business value for the customer.
• Offer solutions, not products. Consider what services and support around the product are needed to deliver the holistic customer value proposition.

Putting these principles into practice will look different for distinct types of care delivery organizations. For example, a partnership approach with a local health system may involve a collaborative solution on achieving quality metrics around diabetes control while for an organization like Oak Street Health, it may involve joint development of a personalized diabetes management program with value-based contracting, and for One Medical, it may involve support for remote monitoring of diabetes patients.

Effective execution against these B2B customer engagement principles will require new or enhanced organizational capabilities. In particular, manufacturers will need to supplement their HCP-level customer knowledge with in-depth insights into account-level value drivers and decision-making dynamics. They will also need to build robust account management and account team orchestration to ensure seamless coordination of stakeholder engagements and an integrated customer experience across the account.

The accelerating pace of change requires agility

The rapid evolution and diversification of care delivery models was catalyzed by the supply and demand drivers discussed above and accelerated by both the industry-wide impact of COVID and the quickening development of enabling technologies such as remote care tools and artificial intelligence. With change in the care delivery landscape coming faster, organizational agility will become a critical success factor for biopharma go-to-market strategy and execution, as drugmakers will need to manage an ever-evolving portfolio of go-to-market models to keep pace. An agile go-to-market organization will quickly identify and prioritize changes in the customer landscape and then convert these market insights into tangible refinements or modifications to customer engagement strategy and execution. The capabilities needed to enable this kind of agility may include (but are not limited to):

• Robust market and customer data analytics to identify emerging trends in the customer landscape.
• Cross-functional forums to review and discuss data signals, generate insights, determine implications for customer engagement strategy and execution, and align on key actions.
• Customer-centric design thinking for teams to rapidly iterate on products and services based on customer feedback and changing preferences.
• Continued digitization of commercial operations tools such as AI predictive analytics or large language models to support pull through of customer engagement changes to field and omnichannel execution.

As the evolution in care delivery models drives greater diversity in the customer landscape itself, biopharma leaders now have both the challenge and the opportunity of driving more fundamental innovation in their go-to-market models. Those companies that are best able to demonstrate agility in their approach to customer engagement will have a distinct competitive advantage that they can leverage across their respective product portfolios.

Luke Forsthoefel is a Consultant; Yakir Siegal is Managing Director; and Gregory Lief is Founder and Managing Director; all with Asymmetry Group, LLC

References

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2. Primary Care Physician Needs Among US Adults in 2019, by Generation. Statista. November 30, 2023. https://www.statista.com/statistics/989526/primary-care-physician-usage-us-adults-by-generation/

3. The Great Awakening. The Harris Poll. March 15, 2021. https://theharrispoll.com/briefs/the-great-awakening/

4. US Department of Health and Human Services. HHS Awards Nearly $55 Million to Increase Virtual Health Care Access and Quality Through Community Health Centers. February 14, 2022. https://www.hhs.gov/about/news/2022/02/14/hhs-awards-nearly-55-million-increase-virtual-health-care-access-quality-through-community-health-centers.html

5. Leventhal, R. Remote Patient Monitoring Use Ascends, but Most Clinicians Still Aren’t Adopters. Emarketer. April 3, 2023. https://www.emarketer.com/content/remote-patient-monitoring-use-ascends-most-clinicians-still-aren-t-adopters

6. Dolan, S. The Technology, Devices, and Benefits of Remote Patient Monitoring in the Healthcare Industry. Emarketer. January 19, 2023. https://www.emarketer.com/insights/remote-patient-monitoring-industry-explained/

7. Durocher, J. How to Tell if Your Customers are About to Leave You. The 360 Blog. September 7, 2022. https://www.salesforce.com/blog/keeping-customers-happy/