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The healthcare diagnostics value game

The healthcare diagnostics value game

The challenges of delivering and demonstrating value in under-pressure markets.

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Balance holding money on left side and pharmaceuticals on the right side

Despite some national differences, diagnostics providers around the world face common competitive challenges and margin pressures, while struggling to demonstrate the value they bring to healthcare systems. To avoid commoditization, they should play a more integral role in care pathways and gain greater recognition for their vital contribution to improving patient outcomes and cutting overall treatment costs.

Through our extensive experience in this market, and conversations with a number of the leading players, we have identified four key industry challenges:

  • Growing price and volume pressure
  • Rising cost base
  • Battle for talent
  • Building better relationships with buyers

 

Diagnostics companies are addressing these challenges by adopting the following strategies:

1. Consolidation: opening the door to scale economies and synergies

2. Targeting new contracts and public sector outsourcing to improve performance and raise volumes

3. Diversification: creating a one-stop imaging and laboratories service, specializing and developing new income streams

4. Rethinking communications and customer experience

5. Reducing headcount

But mere survival is not enough, we believe more radical change can bring competitive advantage.

Five ways to win the diagnostics value game

  1. Partner with the wider health system - including the public sector to ease the strain on public health budgets
  2. Evolve healthcare models to help reduce hospital costs by moving care into the community.
  3. Innovate and provide new solutions by creating new and more valuable forms of testing
  4. Make more of data to demonstrate diagnostics' value
  5. Engage differently with regulators by actively participating in health reforms.

In this paper, we argue that a tremendous opportunity exists to shift the industry's perception from 'white label' third party supplier, to a 'premium brand' contributor to better healthcare, enhancing value to both owners and potential investors.

© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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