The Impact of Changing Demographics on Healthcare Delivery and Innovation
Discuss about the Medical Technologies and Pharmaceuticals.
The world has been changing regarding technology and demographics and these changes affect consumer demand influences how enterprises operate (Banbury, Roots, & Nancarrow, 2014). Consequently, entrepreneurs should consistently develop new technologies and business models to help them in achieving future productivity and supply needs (“MedAdvisor Limited: Private Company Information – Bloomberg,” 2018). Like any other industry in Australia, entrepreneurs in the medical technologies and pharmaceutical industry need to establish and develop emerging science and technologies. Not only do they need innovations to meet current and future needs in healthcare delivery services; they also need to remain relevant in an increasingly interconnected and rapidly changing international market.
CSIRO Future uses predictive scenario planning to provide guidance to corporates in the areas that they can invest innovation resources effectively. The guidance considers technological, economic, social, and environmental factors. As such, CSIRO indicates that the healthcare and pharmaceuticals industry in Australia can use integrated health services techniques to innovate new technologies (CSIRO, 2016). Such technologies include end-to-end services that are cost efficient under increased pressure for funding. Key considerations for innovation are data management systems and the role of local SME in providing niche. Accordingly, the most enabling factor is remote diagnostics. As such, this paper seeks to describe how MedAdvisory uses existing scenarios to plan for the future through digital innovation.
MedAdvisor limited is an Australian information technology company located in Camberwell that develops and delivers medical software for personal patient management. MedAdvisor develops and shares a medication and adherence platform, and a software platform named PlusOne that delivers additional pharmaceutical services such as linking general practitioners with pharmacies, short message platform, tracking of professional services, and advanced business analytics. Furthermore, the firm owns OzDocsOnline, a digital platform that allows patient and pharmacies to communicate electronically and their general practitioners to order for relevant services including medication scripts (CSIRO, 2016). The Entrepreneurs’ Programme, an Australian government initiative has been helping MedAdvisor with the development of systems and processes to expand their business.
Australia is full of opportunities for building resilience for the future and ensuring sustainability in growth. However, companies must realize the need to ask the right questions in order to allocate scarce resources efficiently and understand the role of innovation in assisting businesses to achieve resilience and sustainability(Carayannis, Sindakis, & Walter, 2015). As a result, this paper discusses MedAdvisor’s recent value proposition that functions to link patients directly with their pharmacy to shift from the conventional pure pharmacy product supply to pharmacy services. Therefore, this paper gives a detailed description of the innovation and an analysis of the market components influencing MedAdvisor. Also included in this paper is the description of the proposal to enhance the value proposition and recommendations for future innovation. More, the report also discusses MedAdvisor’s knowledge and capability development, as well as the business model, and value capture. The conclusion stated the major inferences that can be deduced from the discussions and gives a brief summary and recommendations.
CSIRO Future: Guidance for the Healthcare and Pharmaceuticals Industry
The following section discusses the findings of a study review of academic and industry literature documenting the description of the MDR innovation, value proposition and future improvements as well as the business model.
The MedAdvisor platform is a sophisticated medical, patient, and educational content platform with patient experience at the core of the interconnectivity between the pharmaceutical manufacturer, the pharmacy and the general practitioner (GP). This digital platform is a first of its kind in Australia and it functions to necessitate the prompt flow of data between the relevant stakeholders helping pharmaceutical manufacturers, pharmacists, and general practitioners to understand and target their patients more efficiently. The core function of MedAdvisor is to make medication management a lot easier. To do this, the platform integrates large data from manufacturers, pharmacies, and patients. The efficiency of the platform increases with every new customer and script refill. The simplistic nature of the platform characterized by coloured themes and automated icons and tools help customers to manoeuvre through the functionalities seamlessly (“Entrepreneurs’ Programme is helping medical technology and pharmaceutical businesses to succeed,” 2017).
The MedAdvisor digital platform is a unique value proposition that is futuristic and highly sustainable because of its technological nature. There are many people currently in Australia and the world over who are using the digital platform, and the trend is set to continue as more people get access to the internet. In consideration of the four Ps of the marketing mix (product, price, place, and promotion), MDR started as a product since it is a good offered by the company that innovated it (Serrat, 2017b).
The MedAdvisor is a radical innovation that addresses the significant unmet need for patient medication adherence in Australia with a unique software platform for the management of medications. A radical innovation is disruptive and impacts the market significantly as well as the businesses within the same industry (Coccia, 2017).
The development of value proposition is important in the identification of key priority areas for a company (Payne & Frow, 2014). For MedAdvisory, each stakeholder has a value proposition. For the pharmacy, MedAdvisory increases the number of customer visits. Those who visit the pharmacy leave their scripts on-file at the pharmacy after locking into the MedAdvisory. The platform is also popular and has no messaging fee. Additionally, medication is effective thereby, improving patients’ health outcomes which increase the number of people requesting pharmacy services due to referrals from other stakeholders.
Manufacturers promote the innovation by reaching out to medical practitioners and healthcare facilities. The value proposition for manufacturers is broad ranging from boosting branding to a reduced drop-off in medication translating to improved adherence and increased sales volumes. Manufacturers can also communicate directly to consumers, allowing them to collect data without conventional restrictions as well as deliver training and advice to patients using their medications. Further, MDR assists manufacturers in recruiting patients for their clinical trial campaigns.
MedAdvisor’s value proposition for general practitioners includes the promotion of medication management review services. GPs can easily assist their patients in managing their medication and replacing their script order. The platform automatically reminds patients to visit GP services.
MedAdvisor Limited: An Overview of the Company and Its Services
This radical innovation has the unique opportunity of being a mHealth leader in Australia as MedAdvisor’s leverages GuildLink and NostraData which constitute 80% of the market share are unlikely to support more than one online platform (“MedAdvisor – Home,” n.d.). Additionally, the switching cost for both consumers and pharmacists is high, and once they familiarise with MedAdvisor they are unlikely to switch to new mHealths. Pharmacists may not support more than one mHealth platform to manage medication as this may lead to inefficiency and confusion for everyone at stake. Moreover, locking a relationship with leading pharmaceutical manufacturers, healthcare support groups, health insurance companies and other relevant institution might provide long-term support for MedAdvisor (“MDR Initiation Report.pdf,” n.d.).
The MedAdvisor innovation targets the medical and pharmaceutical market whose key stakeholders include pharmacists, patients, general practitioners, hospitals, and pharmaceutical manufacturers. These key stakeholders are also users of the mobile and Web technologies. This market was targeted because of a large number of medication defaulters in Australia (Banbury et al., 2014). According to MedAdvisor, consumers who subscribe to the platform are worth $545 more revenue. MDR allows patients to save more by assisting them to take medication safely and promptly. MDR engages patients resulting in 20% additional rate of adherence, and more than 80% of the patients are likely to fill their scripts.
MedAdvisor has no major competitors in Australia but the closest alternative platforms are SMS reminder services provided by Chemist Warehouse in-house application, NPS MedicineList+ Application, and the PharmEngage PDLA TOP app. Chemist Warehouse has 350 Australian pharmacies subscribed to its app service. Similarly, MedAdvisor and GuildLink provide SMS services via the GuildLink MemoCare SMS to consumers who are unable to access the internet. Nevertheless, SMS products are not capable of addressing the innovation and technology trend since they are developed with the software design, leading to significant limitations. For example, the SMS service is incapable of linking GPs, pharmacists, patients, and pharmaceutical manufacturers. The SMS service is unpopular among Australian pharmacists because of the cost of messaging and the manual input criteria since the app cannot link to GP and hospital systems. As such, the competitive value of substitute products is low and insignificant.
Evidently, the current competition for mHealth leadership seems to have been won by MedAdvisor who are continuously consolidating their market position in medical technologies and pharmaceutical market. The possibility of the competitors becoming a serious threat in the future is between very low and impossible (Daly, 2017). As discussed early, the current threat of substitutes is low and at the same time, substituting MedAdvisor for something similar is nearly impossible because of the nature of service. The firm can leverage on the value proposition to enhance a competitive advantage by diversifying its products to include a premium listing for manufacturers to facilitate advertising and expanding its services to international markets.
The next value proposition needs to enhance the competitive advantage of the firm even further. Many ideas have already been tested with the existing products. MedAdvisor indicates that its next-generation platform will be incremental, enhancing its service delivery by giving patients complete access and control to information, powered by automated pharmacy data dispensing feedback systems. The firm would not need to change its structure to deliver its future innovation.
Value Proposition and Future Improvements of the MedAdvisor Platform
MedAdvisor has exploited knowledge and capability through its “land grab” approach that has it form essential sales and marketing partnerships with major stakeholder in Australia including Arrow Pharmaceuticals, Apotex, Bupa, GuildLink, and NostraData. The firm has been also trained and serviced contracts with various top-notch international pharmaceutical organizations. MDR intends to continue using its knowledge and capability to set the pace for future mHealth innovations. To sustain its competitive position, MDR would pursue various strategies. First, the firm can accelerate the patient adoption rate by enhancing their relationship with the pharmacy sector and seeking new users for the MDR platform. Secondly, MDR should continue to invest in the software platform and focus on building new capabilities that will broaden the range of service provision through the application to reach more consumers and break geographical boundaries. Last but not least, the incremental innovation to sustain the firm’s competitive position should work to expand agreements and partnerships with pharmaceutical companies that would use MedAdvisor as their primary platform for the delivery of medical information and patient training while increasing the frequency of clinical trial campaigns (Daly, 2017).
Furthermore, the knowledge and capability of the firm should allow it to grow faster by targeting various growth avenues. One growth avenue is the aggressive targeting of the domestic market segment (MDR Initiation Report, n.d.). The firm can use its capabilities to increase its share of the pharmacy market extend the GP platform, and partner with social groups, insurers, and private healthcare facilities. Another such avenue is domestic expansion targeting more patients through direct marketing, hospital initiations and boosted healthcare services. The final strategy would aim at expanding the MDR wings to reach foreign markets in Europe and North America.
Like other businesses, MedAdvisor is looking to generate sufficient revenue and make profits from its investments. Businesses that succeed must develop a business model that allows them to meet the needs of their customers at prices that are the competitive and sustainable cost (Serrat, 2017a). There are many types of business models available and MedAdvisor uses the internet enabled click-and-mortar business model combining both the online presence and the physical presence. The basic MDR service is free to local residents.
The MDR business model illustrated in table 2.1 captures value by increasing the number of subscribed patients to increase revenue from manufacturers and general practitioners. While the platform is free for all Australians, the key partners pay for services rendered especially brand boosting. The key partners in the innovation are the main source of funding for the services provided by the innovation.
Value capture refers to the percentage value that the firm retains in every transaction (Carayannis et al., 2015). The value capture for the MDR varies as the key stakeholders are required to “pay per product per annum for training and boosted branding campaigns” (Daly, 2017). The charges vary according to patient penetration.
The key partners in the business model are the pharmaceutical manufacturer, the pharmacists, and the general practitioners as well as the government. The key activities of these partners are to ensure sufficient development of relationships with the customer through brand-boosting, medication reminders, the creation of medication marketing and awareness and the sustainable development of the mobile/desktop application and the website. The key resources for the model are consultations from medication management professionals, a friendly relationship with the key stakeholders, and funding from various sources including governments and philanthropists. The firm’s resources are used to cater for the various costs structured as the development of the innovation’s mobile/desktop apps and website, payment of salaries and wages, advertisements, and fees for commercial consultations.
|
Key Partners · Pharmacies · General practitioners · Pharmaceutical manufacturers |
Key Activities · Develop patient relationship · Boost brand · Medication reminder · Marketing and awareness creation · App and Website development |
Value Proposition · Increase script-filling · Improve medication for better health outcome · Boost branding and increase sales |
Customer Relationship · Training · Consultation · Develop brand |
Customer Segments · Medication sector in Australia |
|
Key Resources · Medication management consultant · Relationship with key stakeholders · Funding |
Channels · Website · App · SMS |
|||
|
Cost Structure · App and Website development · Salaries · Marketing campaigns · Consultation fees |
Revenues Streams · Subscription to MDR services for branding and support · Initial fee for processes |
Table 2.1: MedAdvisory Business Model
The sources of revenue for the firm are the subscriptions to the MDR services and the initial fee for the end-to-end processes. Pharmacists pay a regular monthly fee of $100 regardless of the number of patients they activate. Pharmacists are thus encouraged to activate as many customers as possible. The high number of patients allows pharmaceutical manufacturers to carry out brand campaigns. The innovation has augured well with some of the top tire manufacturers to deliver training and targeted ad campaigns for medication adherence. Manufacturers pay for each product billed annually for campaigns and training. However, their fees increase with consumer penetration.
The revenue collected is used to fund key activities and expansion strategies. As such, if the firm does not capture any value its activities will be slowed significantly and it might have to start thinking of alternative solutions.
Conclusion
MedAdvisor is a leading online and mobile platform in Australia with a radical innovation that aims to mitigate the problem of unintentional nonadherence to medication. The innovation is unique and is seemingly having no significant competition that present threats to current and future business. However, to stay relevant, the firm will need to develop an incremental innovation to enhance its service delivery by giving patients complete access and control to medical information. The business will not need to change the current business model to incorporate future innovations. To remain relevant, the business must work to ensure that more customers are recruited into the service daily. If patients are not registered, the key stakeholders may lose interest in the innovation leading to its failure.
References
Banbury, A., Roots, A., & Nancarrow, S. (2014). Rapid review of applications of e?health and remote monitoring for rural residents. Australian Journal of Rural Health, 22(5), 211–222.
Carayannis, E. G., Sindakis, S., & Walter, C. (2015). Business model innovation as lever of organizational sustainability. The Journal of Technology Transfer, 40(1), 85–104.
Coccia, M. (2017). Sources of technological innovation: Radical and incremental innovation problem-driven to support competitive advantage of firms. Technology Analysis & Strategic Management, 29(9), 1048–1061.
CSIRO. (2016). Australia 2030: navigating our uncertain future. Retrieved April 1, 2018, from https://www.csiro.au/en/Do-business/Futures/Reports/Australia-2030
Daly, A. (2017). MedAdvisor: an app for taking medications safely, effectively and on time. Journal of Physiotherapy, 63(4), 268. https://doi.org/10.1016/j.jphys.2017.08.010
Entrepreneurs’ Programme is helping medical technology and pharmaceutical businesses to succeed. (2017, July 6). [News]. Retrieved March 31, 2018, from https://www.business.gov.au/news/entrepreneurs-programme-is-helping-medical-technology-and-pharmaceutical-businesses-to-succeed
MDR Initiation Report.pdf. (n.d.). Retrieved from https://www.medadvisor.com.au/Content/documents/MDR%20Initiation%20Report.pdf
MedAdvisor – Home. (n.d.). Retrieved March 31, 2018, from https://www.medadvisor.com.au/Home/Landing
MedAdvisor Limited: Private Company Information – Bloomberg. (2018). Retrieved March 31, 2018, from https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=303692959
Payne, A., & Frow, P. (2014). Deconstructing the value proposition of an innovation exemplar. European Journal of Marketing, 48(1/2), 237–270.
Serrat, O. (2017a). Business model innovation. In Knowledge Solutions (pp. 499–507). Springer.
Serrat, O. (2017b). Marketing in the Public Sector. In Knowledge Solutions (pp. 111–118). Springer.
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