institute for continuous
health transformation
Joaquim Cardoso MSc
Senior Avisor for Continuous Health Transformation
and Digital Health
January 10, 2023
Key messages
While the fully formed state of this new healthcare ecosystem is yet to be written, we believe there are 5 forces leading this change:
- 1. Persistent financial challenges require a transformative mindset
- 2. Workforce needs and expectations are evolving
- 3.Digital is transforming access, experience, and business operations
- 4. Payer-provider partnerships will take new forms
- 5. The complex intersections of societal and health issues are coming into sharper focus
DEEP DIVE
5 Forces Leading Change in Healthcare in 2023
Chartis
Cindy Lee, Chartis Chief Strategy Officer
Pam Damsky, Director and Co-Leader of Chartis’ Performance Practice
Tom Kiesau, Chartis’ Chief Innovation Officer.
Atul Pathiyal, Director and Leader of Chartis’ Payer Advisory Practice
Cindy Lee, Chartis Chief Strategy Officer.
January 10, 2023
A new healthcare ecosystem is emerging in which tailored care experiences, digital engagement, and home as a care setting will be more prevalent.
As companies like Amazon, UnitedHealth Group, and CVS made attention-grabbing headlines in 2022, some are speculating whether a new healthcare delivery model run by payers and large market cap companies is emerging-and if that new model will relegate hospitals to shells of their former selves.
As unlikely as this scenario may seem-given how central the physician-patient relationship is for determining where and how care is delivered, and the need for multidisciplinary care delivery for treating complex clinical conditions-one thing is clear: business as usual will no longer work.
… given how central the physician-patient relationship is for determining where and how care is delivered, and the need for multidisciplinary care delivery for treating complex clinical conditions-one thing is clear:
business as usual will no longer work.
Why It Matters:
Heading into 2023, the economy broadly and the healthcare sector specifically are facing increased inflation, cost pressures, workforce challenges, and topline revenue pressures.
This is true for health systems, payers, private equity sponsors, venture-backed companies, and even large market cap companies in healthcare-as evidenced in recent layoff announcements.
“In addition to ensuring financial viability, two things will be key:
- focus — in deciding what role or roles you want to play and are best positioned to play, and
- agility — in developing new care models, operating models, and business models,” says Cindy Lee, Chartis Chief Strategy Officer.
1. Persistent financial challenges require a transformative mindset.
While not the first downturn in healthcare, what makes this time particularly challenging is the need to reduce costs in a time of unprecedented workforce challenges, …
… increasing competition for consumer acquisition and retention, and increasing demands for investment in technology, assets, talent, and capabilities.
In this environment, the path forward cannot be to simply “muscle through” with measures such as increasing productivity standards, reducing span of control, and renegotiating supply contracts.
While certainly essential, these foundational tactics are likely insufficient and risk disengaging an already “at risk” workforce.
Healthcare organizations will need to focus on fundamentally reimagining how healthcare can be delivered and administered in the future, and what role(s) they aspire to play and are best positioned to play.
With this core strategic direction clearly defined, healthcare organizations can then layer in the critical tough decisions regarding what investments to make or not make; where to cut costs; where to divest or restructure assets; and where to seek partners for capital, capabilities, experience, or market position.
Healthcare organizations will need to focus on fundamentally reimagining how healthcare can be delivered and administered in the future, and what role(s) they aspire to play and are best positioned to play.
2. Workforce needs and expectations are evolving.
Healthcare workforce challenges continue to be a top concern across the industry.
For hospitals, health systems, and medical groups, creating a sustainable path forward will require addressing nurse and physician burnout, innovating care and operating models to better leverage technology and optimize care team member roles, and investing in leaders and management systems.
Solutions will need to go beyond traditional human resources tactics (such as compensation and benefits reconfiguration, career ladder changes, and work hour flexibility) to focus on workforce wellness and engagement.
Solutions will need to go beyond traditional human resources tactics (such as compensation and benefits reconfiguration, career ladder changes, and work hour flexibility) to focus on workforce wellness and engagement.
“An often-overlooked part of staff retention is equipping managers and other leaders with the skills to create an environment where staff feel valued, respected, and connected to the organization,” says Pam Damsky, Director and Co-Leader of Chartis’ Performance Practice.
“These leaders need a vision of the possible, as well as important skills in listening, managing challenging conversations and situations, fostering consistent bi-directional communication, creating psychologically safe cultures, and actively demonstrating respect and understanding while at the same time managing to ever-stricter budgets and fiscal requirements.”
3.Digital is transforming access, experience, and business operations.
Consumers are yearning for seamless experiences in healthcare.
While some access points (like search and scheduling) have improved, healthcare still has a long way to go.
Some health systems have invested in advanced engagement centers that bring together all aspects of consumer interaction, including search, scheduling, messaging, billing, marketing, and clinical advice lines to create integrated, more seamless experiences for their consumers.
Some health systems have invested in advanced engagement centers that bring together all aspects of consumer interaction, including search, scheduling, messaging, billing, marketing, and clinical advice lines to create integrated, more seamless experiences for their consumers.
Digital is also unlocking new sites of care, such as the home.
Anywhere the patient goes can become a clinical care setting-resulting in considerable implications for consumers, care team models, and logistics.
“The home as a site of care is increasingly an area of focus-but not just for health systems,” … says Tom Kiesau, Chartis’ Chief Innovation Officer.
“While the CMS proposal has provided a funding differential to health systems, other ecosystem players are looking at care in the home as a way to reduce health system utilization.
The waiver has provided a near-term advantage, but other players will be in the home, and health systems will need to decide whether they want to compete or collaborate with these emerging entrants.”
“While the CMS proposal has provided a funding differential to health systems, other ecosystem players are looking at care in the home as a way to reduce health system utilization.
4. Payer-provider partnerships will take new forms [the rise of the payviders]
The evolution of the healthcare ecosystem is most transparent in the evolving roles that payers and providers have taken on over the years, with payers being more aggressive in building out care delivery capabilities through acquisitions of physician groups and others-hence the emergence of the term “payviders.”
As financial challenges continue, some health systems are once again considering how to participate in risk, particularly in Medicare Advantage.
Increased collaboration between payers and providers will continue to be critical as the industry recovers from the various impacts of the pandemic.
“As payer and providers increasingly collaborate to navigate market dynamics, aligning incentives to jointly meet consumer needs will be key,” says Atul Pathiyal, Director and Leader of Chartis’ Payer Advisory Practice.
5. The complex intersections of societal and health issues are coming into sharper focus.
New funding and regulatory attention to health disparities give a glimmer of hope that healthcare is moving in the right direction to address historical health inequities and societal health issues.
Enabling convenient, timely access-and equity-informed high reliability care -will be key to addressing underlying health inequities that have persisted for decades.
In addition, having the right technologies and data in place will be critical to understanding disparate clinical outcomes and experiences among patient populations.
It’s especially important that healthcare organizations not only undertake efforts to advance health equity but do so together with efforts to create more equitable organizations internally, as well as focus on health equity at a population level, which may require collaboration with payers and other community organizations to address social determinants of health.
In fact, collaboration and partnerships across all segments of the industry will be key to success as we move into 2023.
Even as the healthcare ecosystem expands to include a much wider array of entities, no one alone has the requisite access to capital, expertise, and experience to enable highly accessible, equitable care.
Organizations will need to determine what capabilities need to be core to them and where they should partner, avoiding having to own and operate everything themselves.
Sustainability in the future requires pursuing solutions in a new way. And taking advantage of arising opportunities can not only open doors for the future but also address today’s challenges.
“Healthcare leaders need to make time to plan for the future, stay focused on what is most important, and pursue the value at the core of who they are,” says Lee.
“The good news is that these forces are making genuine healthcare transformation more viable than ever before.
That means organizations can work toward a more sustainable financial future, foster an engaged and thriving workforce, and ensure consumers have care and support that is easily accessed, equitable, safe, and high-quality.”
That means organizations can work toward a more sustainable financial future, foster an engaged and thriving workforce, and ensure consumers have care and support that is easily accessed, equitable, safe, and high-quality.”
Originally published at https://www.linkedin.com.
