This OODA special report focuses on the Health Care Sector. It is written both for firms that are in the sector who are seeking competitive advantage and for firms in other sectors that can use this awareness for strategic planning (all our market based special reports are available on our OODA network resources page).

With the rise of Covid-19 (see OODA Special Report:COVID-19 Sense-making) and the global response to the pandemic we see even more reason to believe that the next decade may well be the decade of biological sciences, and the health care sector will see accelerated transformation. Every business leader, no matter what sector they operate in, should have an understanding of key drivers in this market.

As a market-based assessment, this special report will be of most use when read in conjunction with the functional and technical research we provide OODA network members, and we provide contextualized recommendations for related research throughout this report.

The Health Care Sector encompasses two main industry groups. The first includes companies who manufacture health care equipment and supplies or provide health care related services, including distributors of health care products, providers of basic health-care services, and owners and operators of health care facilities and organizations. The second group is made of companies primarily involved in the research, development, production and marketing of pharmaceuticals and biotechnology products.

The biggest firms in this sector include United Health (health services provider), Medtronic (manufacturer of medical devices), Abbott Laboratories (diversified health including drugs), McKesson (pharmaceutical distributor and provider of healthcare technology), CVS (after merger with Aetna and acquisition of Humana now a large provider of insurance and distributor of products)

Innovation in the Health Care Sector:

• Nothing is more important than health. All of us interact with healthcare providers and all of us have a stake in the success of pharmaceutical research and the production of medicine. And many of us are impacted by the cost of health making efficiency a key issue as well.
• For decades, major health care providers, academia and government researchers have been focusing research on ways to change patient outcomes, including research into ways to mitigate the horrors of a wide range of diseases.
• Digitization has helped in uncountable ways. Some particularly promising innovation has come from the ability to conduct analysis over large quantities of data, for example, analysis of past treatment histories and outcomes to improve treatments. From this basic beginning, more research fueled by digitization included research into treatments tailored to patient genetics.
• Innovation today has also led to smarter analytics over imaging including x-rays and MRI to enable computer vision to detect issues in more reliable ways than trained professionals can.
  DNA sequencing cost has dropped significantly, so significantly that innovators will be able to leverage this for all patients.
• Today, in part because of the mobile revolution and advances in AI, consumer devices including smart phones are now increasingly part of health care, enabling early detection of heart problems and even many types of cancer.
• Other benefits of digitization include the ability to bring all aspects of a patient’s care into one comprehensive system where all healthcare providers can have a full view of all data.
• Innovation has been slowed by many forces including a long list of high impact breaches of patient data and also many high profile attacks of ransomware against health care providers.

Cybersecurity in The Health Care Sector:

Successful digitization requires appropriate cybersecurity. Health Care sector efforts in cybersecurity are uneven. Larger, well resourced firms may have mature efforts with multiple layers of defense and an ability to detect issues and respond appropriately. Many mid-sized firms and most smaller firms have room for significant improvement.

Our recommendations for cybersecurity in the Health Care sector:

• It should be understood that compliance with law regulation and requirements of HIPAA do not automatically translate to security.
• The yearly Verizon Data Breach Investigations Report reviews as many reports of computer breach as possible in an attempt to learn actionable lessons. For the health care sector, the 2019 report highlighted challenges the industry faces in cybersecurity. People working in this sector have jobs to do and they have to do them fast and right and have training in medicine to do that. But now they are also expected to be cyber defenders. It is not fair but it is a fact. Our health care providers must also be cyber security experts.
• The nature of health care services involves a great deal of embedded systems that are very hard to keep patched against threats. Isolation must be part of the security strategy for these systems. Organizations should also levy requirements on all vendors to improve their security so malware on embedded systems is less of a threat.
• Establish a relationship with the appropriate cybersecurity information sharing organization for your firm (for many this is the Health ISAC). Membership will enable sharing of information on threats but also provides a venue for exchange of best practices in cybersecurity.
• If for any reason, joining an ISAC is not the right approach for your organization, take advantage of the wealth of high quality recommendations provided by DHS. Start with the DHS Cybersecurity and Infrastructure Agency (CISA).
• Larger firms can aid in improving the security of smaller firms and their entire supply chain by advocating for use of common cybersecurity frameworks and taxonomy’s, like the NIST Cybersecurity Framework. Smaller firms can proactively show how serious they are about security by adopting this framework.
• All businesses in the sector should ensure executives have a baseline understanding of cyber threats as well as geopolitical threats and technological risks. We provide a plain english daily threat brief designed to improve this awareness. Sign up at The Daily Pulse
• Think through your nightmare scenarios. In this sector it could include disruption of health services by ransomware, or theft of patient info, or manipulation of info by trusted insiders. Pharmaceutical companies should consider scenarios that might cause disruption of research. Thinking through nightmare scenarios will help you plan to mitigate risks and prioritize resources appropriately.
• All firms, large and small, should leverage outside experts to evaluate security. This type of external assistance can include review of plans, policies and architecture. External red teaming efforts should also be leveraged as an independent way of evaluating comprehensive security programs.  Contact us for more insights into all aspects of assessments including red teams.

Enhancing Innovation in The Health Care Sector:

• Consumers are growing accustomed to change in the healthcare sector, with most change being positive! Continuing this innovation is important, clearly there is much more work to be done in improving patient outcomes.
• Innovation in healthcare will be sub-optimized as long as cybersecurity issues are so rampant. Firms in this industry should accelerate their security efforts including collaborating with suppliers, partners and even competitors in actions to mitigate security issues.
• Accelerating digital transformation of health services will help patient outcomes, if security issues can be mitigated. Acceleration can be aided by ensuring solutions are designed both with security and data interoperability. Smart, secure connectivity to trusted apps on patient smart devices will aid in early diagnosis and work can be accelerated on this connectivity (in many cases the tools exist but they are not interoperable enough or trusted by enterprises yet).
• The US healthcare system is currently a collection of disconnected components with providers no very interoperable. Visionaries in this field will seek ways to connect and leverage the connections in trusted ways. This will enable more holistic efforts and improve patient outcomes.
• Many technology companies in the sector are already incorporating new biosensors into devices like smartphones or smartphone connected sensors to generate, gather, analyze and share data. Advanced AI over this data can analyze current and new data to look for anomalies and better tailor healthcare.
• Major tech providers from the IT industry already serve the health care sector, but innovation in your business can be accelerated by forging better/stronger partnerships with IT firms. Those businesses know technology, but few know the health care industry and its specialized needs.
• One of the projected benefits of Quantum Computing is the ability to model reality. This was the dream since the concept was first proposed. When it comes to pharmaceutical research, Quantum Computing may model reality of medicines in ways that enable prediction of effects. Additionally, Quantum Computing may enable new design of processes that will enable production of new drugs.

For Businesses Seeking To Serve the Health Care Sector:

• Executives in this sector stay very busy. Do your homework and prepare prior to any discussion so you never waste their time. Understand as much as you can about their needs before any meeting. Also understand what you can about their clients and supply chain since increasingly these are topics on the mind of corporate decision-makers.
• Every publicly traded company in the health care sector provides an annual report that captures specifics on their market and approach which includes intentions for the near future. These are available on corporate websites and should be one of the first documents read before any sales call.
• Be fluent in the technologies of high interest in this sector including Cyber Security, Robotics, Cloud Computing, Quantum Computing, Quantum Security, and Artificial Intelligence.

These are additional references that can help accelerate digitization in the Health Care sector:

AI Topics:

• AI Security: Four Things to Focus on Right Now – This is the only security framework we have seen that helps prevent AI issues before they develop
• A Decision-Maker’s Guide to Artificial Intelligence –  This plain english overview will give you the insights you need to drive corporate decisions
• When Artificial Intelligence Goes Wrong – By studying issues we can help mitigate them
• Artificial Intelligence for Business Advantage – The reason we use AI in business is to accomplish goals. Here are best practices for doing just that

Quantum Computing:

• The Executive’s Guide To Quantum Computing: What business decision-makers need to know now about quantum superiority
• The Executive’s Guide To Quantum Safe Computing: Take these steps to make your enterprise quantum proof
• Is Quantum Computing Ushering in an Era of No More Secrets?: Context from OODA’s Matt Devost on the very near future of quantum computing.
• What To Do About Quantum Uncertainty: Guess what, besides uncertainty at a quantum level there is great uncertainty among business and policy makers regarding Quantum Computing.

Cybersecurity Topics:

• OODA’s Cyber Threat Analysis Report : OODA’s Cyber Threat Analysis Report provides the “so what” behind the news and events we track on a daily basis.
• A Traveling Executive’s Guide to Cybersecurity: No-nonsense actions to take to reduce risk for executives on the go
• Best Practices for Agile Cybersecurity: Kickstart your cybersecurity improvement program
• Essential Management Strategies for Cybersecurity: Management lessons learned and essential actions to mitigate risks

Health Care Topics:

• OODA Special Report:COVID-19 Sense-making
• A Perfect Storm forms as COVID-19 Meets Cyberspace
• OODA Webinar – Managing Through COVID-19
• Covid19 Related Geopolitical Questions To Drive Your Strategic Planning
• I Was Asked to Review a Major City’s Emergency Response Plan. Here’s What I Told Them.
• The Impact Of Coronavirus on your Markets and Business Strategy
• You Need to Tighten Your OODA Loop on the Coronavirus/COVID-19
• Russia Exploits Global Pandemic for Economic Attacks
• The Best Analysis Regarding the Business Impact of Coronavirus COVID-19
• OODA Special Report: How the Coronavirus will impact your mid to long range strategic planning
• OODA Special Report: Executive’s Guide To The Revolution in Biology

OODA network members can find these and all other research reports at our OODA Network Resources page