This article originally appeared on Forbes
By: Jill Collins, CEO
The COVID-19 pandemic has forced healthcare organizations to rapidly adapt and change the way they operate. In a post-pandemic world, it is crucial for healthcare businesses to continue to evolve to meet the needs of providers and patients and stay ahead of the curve.
Healthcare companies weathered the pandemic differently based on whether they decided to pivot resources to support COVID or stay focused on their primary business without wavering. Those that were able to leverage their technology to help address emerging COVID needs generated new revenue opportunities and some experienced tremendous growth. Larger healthcare companies had to balance the losses from the decline in core businesses with COVID-related revenue operations. The companies that experienced revenue surges were able to fuel new product development or even M&A activities. The biotech markets and funding opportunities thrived.
According to an April 2020 Forbes article, healthcare organizations that have prospered during the pandemic have shared several key traits: utilizing the resources and skills they already had, creating a product or service that was in demand, and being flexible and adaptable to change. Many public companies have outperformed forecasts and turned in strong financials and growth during 2020 and 2021. Yet some organizations continue struggling to replace the COVID revenue and increased resources that were acquired to sustain COVID testing, etc.
One notable example is 23andMe, a direct-to-consumer genetic testing company. 23andMe remained focused on its core product offerings throughout the pandemic, even though many of its customers were looking for information on COVID-19. As a result, the company saw its revenue plummet by 30% in Q2 2020 compared to Q2 2019. Big diagnostic players, such as Quest Diagnostics, captured COVID revenue, but overall still were depressed because of the absence of core testing services. Meanwhile, smaller diagnostic players like Biodesix experienced a boost in testing revenue as a result of their COVID offering.
We’ve seen firsthand how the pandemic has impacted healthcare businesses, both big and small. Here are four ways healthcare businesses can ensure success.
Be Agile and Adaptable
One of the major lessons learned from the pandemic is that agility is critical. Companies that were able to pivot quickly to meet the needs of their customers during the crisis were the ones that survived and prospered. For example, Color Health, a leading provider of genetic tests, redirected its product development efforts away from its cancer testing focus to develop a COVID-19 test. As a result, the company was able to continue serving its customers during a time when they needed support.
While your technology platform may have been developed for a specific application, being able to rapidly reconfigure and address novel clinical indications is key. New product development can be accelerated by leveraging existing technology. Furthermore, being able to quickly scale your technology to accommodate high volumes is critical to help combat future widespread healthcare crises such as the COVID-19 pandemic.
Evaluate Both Short and Long-Term Strategies
Many healthcare companies were basking in revenue surplus during the height of the pandemic and weren’t prepared for the post-COVID environment. They scaled up resources to support short-term needs. However, as the pandemic subsided, that infrastructure was no longer required and they needed a new plan to utilize these resources. As a result, they are now facing significant financial and resource challenges. It’s essential to set realistic forecasts and expectations so that you can adjust and tailor your business model accordingly.
For example, Cue Health had been focusing on new tests for influenza, but the pandemic presented new opportunities. The company received a $481 million government contract in 2020 to scale up production of its point-of-care COVID-19 test. Cue Health’s success during the pandemic led to it going public. The company raised $200 million in an initial public offering (IPO) in September 2021.
Despite this success, Cue Health has had to make some tough decisions. In June 2022, the company laid off 170 manufacturing employees citing “economic challenges” and cuts in U.S. government funding for COVID-19 testing. As a result of this challenging time, Cue Health has expanded its test portfolio to cover influenza and other infectious diseases to add to post-pandemic growth drivers.
Look for Timely Opportunities to Grow
Healthcare businesses have traditionally used M&A to acquire new technology, products, and services. Additionally, M&A can support entry into new markets or consolidate a business’s position in existing markets. Many companies with new COVID revenue streams reinvested these funds into their own product development or used them to acquire competitive or complementary technologies. Similarly, larger companies opted to purchase COVID-related technology instead of expanding internally.
Mesa Biotech had a point-of-care (POC) PCR device that allowed for infectious disease testing to be conducted within 15 minutes, anywhere in the world. In 2020, the company rebranded and focused on a COVID assay, and its rapid success attracted the attention of Thermo Fisher Scientific, one of the world’s largest providers of scientific instruments and services. In January 2021, Thermo Fisher acquired Mesa Biotech for $550 million.
Continue to Invest in Your Branding
When your company strategically pivots its commercial strategy, be sure your brand narrative promotes that new direction. If you’ve shifted your focus or entered a new market, it’s critical to invest in expanded marketing efforts to support that change. This could include investing in new personalized patient outreach strategies based on consumer insights or marketing online scheduling platforms. Whatever direction you choose, make sure your marketing efforts are focused on building trust with your target audience and differentiating your business from the competition.
COVID-19 has forced healthcare organizations across the country to reevaluate their operations and make necessary changes. Those who can adapt quickly and anticipate long-term trends will be best positioned for success in the post-pandemic world.