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| | | Within a complex and evolving healthcare landscape, an organization's business model is crucial for value creation. Most US healthcare systems adopt some combination of two primary models: vertical integration (owning multiple segments of the healthcare value chain) or pure-play specialization (focusing on core activities). In recent years, vertical integration models have experienced much stronger growth rates, according to research by senior partner Shubham Singhal and coauthors; for instance, "capital light" integrated delivery models, which exclude capital-intensive acute care facilities, doubled the performance of the overall healthcare industry from 2017 to 2022. The authors note, however, that both models could be optimized to spur growth: for example, vertically integrated models can excel through digital member engagement, and pure-play models can succeed by enhancing productivity and onboarding technologies such as AI and automation. Regardless of the primary model chosen, organizations must develop distinctive capabilities to unlock the more than $1 trillion in value that Singhal and colleagues estimate exists within the healthcare ecosystem.
Following the landmark passage in 2022 of the US Inflation Reduction Act (IRA)—a $500 billion investment in clean energy, healthcare, and tax reforms—state governments are transitioning from designing programs to secure federal grants and efficiently deploy funds to implementing them in 2024. A recent update to McKinsey's 2022 IRA analysis by senior partner Adi Kumar and coauthors features a summary of implementation insights from four related McKinsey articles. These articles offer strategies for states to accelerate decarbonization, such as establishing a comprehensive emissions baseline, and to promote equity in program delivery, such as involving diverse stakeholders in the decision-making process and committing to a transparent investment process.
Digital twins—virtual replicas of real-world systems, products, or processes—have the potential to accelerate innovation in the medtech industry by reducing R&D costs and enabling personalized patient care. However, medtech companies face challenges in adopting this technology, including a shortage of suitable capabilities, limited data access, and a lack of clear strategies. To facilitate successful implementation and eventual scaling, senior partner Jack Donohew and coauthors recommend a three-pronged agile approach to digital-twin delivery: start with high-feasibility use cases, build a test-and-learn culture, and engage potential users in the design, development, and implementation stages. Already, real-world medtech applications of digital twins have demonstrated 20 to 50 percent reductions in time-to-market and 75 percent reductions in clinical trial costs. | | |
| | | | | | | | | | | | | The case study collection Rewired in Action illuminates companies that have launched digital transformations to build value. Supported by technical and industry expertise from McKinsey, these organizations have changed their trajectories through the integration of digital and AI.
| | | — Edited by Jermey Matthews, editor, Boston
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