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5 Factors Impacting the Pace of Change in Healthcare

Healthcare

For many of us that have been involved in healthcare over the past twenty years, we have seen a continued focus on two key priorities: improving the quality of care and decreasing its cost. In recent years, we have added improving the patient and clinician experience creating the Triple Aim.

Looking back in time, in my opinion, the real focus on the patient started when organizations like WebMD emerged on the healthcare scene and provided patients with access to data that they had never seen before. Now, doctors were dealing with patients coming into their offices who had some information and presenting them with a list of diagnoses that they felt could be causing their illness. It was a bit transformative that a professional figure was being challenged, but clinicians quickly learned that they will need to adapted as the patient-centric journey began.

So, what has changed over the years? The pressure and pace of change are accelerating in today’s healthcare marketplace and patients and employers are becoming less tolerant of not receiving value for the services they receive. In addition to the pace of change, all industry dynamics are trending towards providing the patient (consumer) with experiences they have become accustomed to dealing with other industries, such as banking or travel services. To explain the change, I want to outline five key factors that are both accelerating this change and making it more important to understand the patient, consumer and member in your marketplace.

Consolidation

Many years ago, the formation of Integrated Delivery Networks was the trend. Let’s face facts, there is definitely strength in numbers both from a market share and operations (cost) perspective. Today, mergers continue, and we are seeing very large partnerships forming. In Western PA, UPMC, and Pinnacle merged while Highmark extended its presence with a partnership with Penn State. Several larger mergers, CHI and Dignity, Ascension and Providence St Joe’s are on a scale we haven’t typically seen before. While these organization will certainly increase their market share and extend their services to patients, the premise that larger providers will provide lower costs (this is typically true in saturated markets due to having to be competitive from fee for service) is not always the case.  Research in North Carolina has shown that mergers can actually drive costs up. Regarding the potential Atrium and UNC merger, BCBS of NC asked UNC to guarantee $1B that the merger would save the state on its healthcare costs. Needless to say, the guarantee didn’t happen.

Coordination

There is a trend that has been occurring in recent years where rather than just consolidating to become bigger, organizations are starting to integrate vertically to provide better access for patients. It’s about better coordination of patient care and providing services in convenient locations. Walgreens has established relationships with both Cleveland Clinic Foundation (CCF) and New York Presbyterian (NYP). For CCF, Walgreens is providing services in its Minute Clinics to CCF patients while enhancing their population health, disease management, and wellness capabilities. In Walgreen’s partnership with NYP, consumers are gaining remote access via telemedicine services to NYP physicians in communities where their patients live. In addition to the in-store kiosks, Walgreens customers in the New York area who are using the Walgreens website can access to NYP OnDemand Urgent Care to video chat with board-certified emergency medicine doctors.

Competition

Across the board there is increased competition in healthcare on value and customer service as organizations expand their core capabilities – mainly due to the two prior factors: Competition and Coordination.. Optum (United Healthcare) for example, bought SCA a few years ago, who is a leader in the ambulatory surgery center marketplace. They also recently merged with Davita Medical Group which they added to their ambulatory services division. Their ultimate goal is improved care, quality, cost and patient satisfaction through an integrated ambulatory care delivery systems enabled by information technology. Humana acquiring Kindred’s home health, hospice, long-term care hospitals and inpatient rehabilitation facilities are targeted at improving Humana’s population health strategy, keeping patients out of the hospital and cared for in lower-cost outpatient settings. All these creative mergers and acquisitions are driving toward improving the patients access and experience, while hopefully becoming more cost-effective in the delivery of care.

Capitation

While value-based care has slowed a bit with new administration’s move cutting bundled payment programs, all providers are continuing to prepare themselves for this change. This type of change is not new to the industry. Providers have successfully been in value-based relationships in the past as seen in successful reductions in hospital-acquired infections, reduced falls, reduced adverse drug events, and HCAHPS. Managing the vertical aspects of the value care chain of care will be critical as we continue down this path.  Capitation and Value Based Care are about increasing the risk providers take with regard to managing their populations. Just a few days ago CMS announced that they want ACOs to take on more risk with Medicare Shared Savings Program. The ultimate focus is on delivering value.

Consumerism

All roads lead to the patient. Location, preferences, insights, access. These are the factors impacting a patient’s healthcare decisions today. Providing convenient, cost-effective services for patients is expected, as we have become accustomed in our daily lives outside healthcare. About 80% of the U.S. public is located within five miles of CVS’s nearly 10,000 stores. CVS’s acquisition of Aetna is all about personalized health, “Forget the MinuteClinic. It’s not about the Minute Clinic,” Bertolini (CEO Aetna) said. “It’s really about a place in the store where you can come in” and have healthcare solutions personalized for you. We all wait in anticipation to see how the partnership of Amazon, Berkshire Hathaway, and JPMorgan will potentially innovate in the marketplace.

All of this change adds new dimensions to the patient experience, which is evolving into a broader patient/consumer experience. The journey is just getting started… Interested in learning more? Contact us today.

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