How the Healthcare Industry Learned to Stop Worrying and Love the Internet

Mar 05, 2012
By Pharmaceutical Executive Editors
Kaush Gandhi looks at how healthcare and pharma are following other industries in embracing ‘disruptive’ digital technology.

In today’s globalized economy, it is not uncommon to read about the digital transformation of an entire industry along with the demise of a once-mighty corporation. Household names across many industries, such as EMI music, Woolworths, Thomas Cook, Blockbuster, Ladbrokes and Encyclopaedia Britannica have radically restructured, or in some cases, gone into bankruptcy, as new digital entrants have disrupted their traditional business models.

This disruptive thinking, defined by economist Joseph Schumpeter as the ‘creative destruction’ of established businesses, has led to new business practices. Many of these have leveraged some aspect of the digital environment and today we have the opportunity to better understand how some of these ideas have already been applied in the healthcare industry.

In the pharmaceutical industry, decades of double-digit growth seem a distant memory and many healthcare companies are now looking at new opportunities to develop a competitive advantage. In the last few years, healthcare has started to learn and adopt digital ideas coming from outside the sector. It could be argued that pharma is unusual, in that it has a strict regulatory framework covering its marketing activities. But the same is true for other industries, such as financial services, a sector that has also been transformed by the internet.

Creative destruction has transformed the travel industry and allowed innovation to flourish. This has been out of necessity for the incumbent flagship airlines, which, faced with upstart newcomers with innovative digital marketing, had to react and find new ways to innovate. The internet has since facilitated a closer relationship between the airlines and their consumers, via direct selling or travel comparison websites, in the process negating the need to use travel agents as intermediaries. Now we have companies engaging with consumers across multiple digital access points, allowing their customers to book tickets, check in to flights and complete other functions from a website, mobile website or smartphone application. More recently, Delta became the first airline to offer check-in and flight status on Facebook and 24/7 customer service through its Twitter account. Other innovators include KLM, which has introduced a ‘Meet and Seat’ program, allowing passengers to share and view other (opted in) passenger Facebook or LinkedIn profiles when choosing their airline seating.

Healthcare companies are beginning to follow suit. Recent examples include Health Tap, which offers an online interactive physician network providing free online and mobile answers from thousands of physicians accessed via their website, social media and smartphone apps. Others such as Sharecare offer expert answers to healthcare questions via their website and social media platform using consumer friendly language collaborating with leading US medical institutes, healthcare companies and renowned physicians.

The online retail sector has also been transformed in the last decade, driven by companies like Amazon, which show innovation and leadership across multiple sectors. Amazon has introduced a number of customer-friendly innovations, including 1-click ordering, customer reviews, recommendations and the hosting of third-party retailers on its website. Recommendations play a big part in the Amazon offering through customer reviews, complementary products and even alternative suggestions. Another recent innovation is showing the purchasing habits of other Amazon customers with a similar profile or interest.

Healthcare websites such as,, and others have taken the idea of recommendations and are allowing consumers to post reviews on different aspects of their healthcare, including clinics, hospitals, physicians and even treatments. Others, like,have over 130,000 patients sharing their medical records with others, peer-to-peer. One consequence of this free service is that 10% of those sharing their experiences have changed their GP. This increase in the patient demand for better healthcare is radiating across all aspects of their treatment, including medication and we are seeing many examples of patient communities leveraging latest social media channels to discuss their treatment. We also now have websites like making the first tentative steps in applying the concept of comparison price shopping websites into healthcare with online tools offering services like lower-cost medication alternatives to existing prescription choices.

In one of the most notable examples of business transformation, Apple, Napster, Amazon, and others have radically impacted the music business by changing consumer behavior in the listening and purchasing of music with dramatic consequences for the incumbents in this sector. The traditional business model of buying pre-packaged albums from music retailers has been replaced with the download and purchase of music as either singles or the more traditional albums with this model now extending into sales of TV programs and movies.

This replacement in the physical consumption of music and video with digital downloads has affected retailer and manufacturer alike and led to significant changes in their profitability and organization.

Although, healthcare has the benefit of being a physical consumable, the industry has the attention of a number of new digital start-up companies, many of which are focused on helping consumers attain fitness and well-being with the goal of disease prevention. Examples include Massive Health, which supports consumers in managing their health using smartphone apps that leverage the latest social and design trends; another interesting example is Stickk, which seeks to integrate consumers’ social media relationships and activities to drive positive behavioural change in personal well-being and health. We also have Skimble, providing consumers with exercise, dietary and well-being advice and support. Many of these digital solutions work across multiple platforms and are heavily influenced by the latest smartphone technology and design trends.

There are numerous other examples in healthcare industry where it has borrowed ideas from other industries to improve or shape business, and this trend will only increase as incumbent healthcare and pharmaceutical companies become more open to new ideas and are willing to accept that our industry like others is in a state of transformation. We must also recognize the growing number of new digital start-ups in healthcare who are seeking to reshape our industry by applying ideas and concepts from Silicon Valley and the wider digital eco-system. These innovations will help shape our industry for tomorrow and allow pharmaceutical companies to get closer to their customers and maybe even the consumer. It is an exciting future for those who can spot digital opportunities and trends in other industries and can implement these ideas into healthcare.

About the Author

Kaush Gandhi is Digital Director at Euro RSCG Life Medicom and can be contacted at [email protected]

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