by Venky Ananth
In the dynamic landscape of healthcare, a new frontier is emerging that holds great promise for medical advancements. Acquisitions, consolidations and partnerships have become key drivers of innovation, cost-reduction and improved patient outcomes worldwide. This collaborative trend amongst stakeholders in the medical landscape is further fueled by external forces such as staffing shortages, inflation and reduced post-pandemic government support towards certain healthcare sectors. Let’s take a closer look at this –
Acquisitions: Unleashing the Power of Synergy
Acquisitions are becoming an increasingly powerful tool to unlock the potential of synergy in the healthcare sector to enhance efficiency, expand capabilities, scale up production at lower operating costs and to enter into new geographical markets and even niche sectors. For instance, many pharmaceutical companies are acquiring mid-size biotech companies, allowing them to tap into the resources, expertise and specialized services of these acquired entities. By consolidating strengths and resources, healthcare organizations can streamline healthcare delivery, resulting in improved patient outcomes and the development of groundbreaking technologies. Combining the research and development efforts of multiple entities enables the acceleration of medical breakthroughs, ranging from cutting-edge diagnostics to precision therapies.
According to KPMG, 60% of life sciences and healthcare investors are interested in increasing merger and acquisition (M&A) activity in 2023. Despite the current year being regarded as a “reset” year, experts expect the volume of M&As to pick up pace as the year unfolds. This trend is driven by a variety of factors, including an anticipated 44% decline in the demand for hospitals by 2030 and, thus, the need for specialized, smaller hospitals in the future. Consolidating resources and capabilities allows healthcare organizations to gain a competitive edge, improve R&D and future-proof themselves.Consolidation: Uniting Forces for Unprecedented Impact
Consolidation, the merging of multiple healthcare entities into a single cohesive unit, is another force driving medical advancements. Consolidation leverages economies of scale – as a result, it reduces costs and boosts operational efficiency. Furthermore, when resources, expertise and infrastructure are shared, it leads to optimization of best practices, development of new treatment protocols and better access to superior quality care. In fact, it enhances care coordination, which can lead to the adoption of a patient-centric approach that is smooth, comprehensive and consistent. Partnerships: Fostering Collaboration for Collective Success
In addition to acquisitions and consolidation, partnerships, too, are playing a pivotal role in fostering collaboration among diverse stakeholders (i.e. researchers, providers and payers). Partnerships break down traditional silos – this can truly drive transformative change in the healthcare industry. Pooling expertise, resources and knowledge empowers stakeholders to create an ecosystem conducive to innovation that benefits both the industry and, of course, patients. Collaboration between researchers and pharmaceutical companies, for example, accelerates the development of new treatments and therapies. Similarly, partnerships between healthcare providers and payers give way to care models that equip patients with high-quality care at competitive pricing. Partnerships between technology and healthcare companies are especially helpful – healthcare organizations can harness data analytics and artificial intelligence to offer bespoke, targeted treatment options.
The rise of acquisitions, consolidations and partnerships represents a paradigm shift in the healthcare industry because such collaborative approaches are bringing together multiple players, including tech companies, to deliver innovative healthcare in a complex and interconnected world where digital health and tech-enabled health services are in demand. Acquisitions, consolidations and partnerships are accelerating innovation, reducing costs and improving patient outcomes. There is strength in numbers – leveraging the best of multiple entities allows all stakeholders to overcome their individual limitations to work toward a common goal. By embracing this new frontier, the healthcare industry can pave the way for a brighter and healthier future.
Venky Ananth, SVP and Global Head of Healthcare, Infosys
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