- Understand the market dynamics and major trends in today’s healthcare environment that are driving increased competition and the movement from fee-for-service to value-based care.
- Gain four strategies to strengthen your organization’s competitive position and financial resiliency amid healthcare’s changing landscape.
For more on this topic:
- View our on-demand webinar, Financial Health: How to Thrive in Healthcare’s Changing Landscape.
- See how PINC AI™ cost reduction technology and clinically integrated margin improvement consulting can help you uncover value in your organization.
- Download the PINC AI™ capabilities brochure to learn about all our data and technology solutions.
Today’s healthcare environment is characterized by two driving forces: increased competition and movement to value-based care. Billions of dollars have been invested in startup companies built to take risk, leverage telehealth and apps, and deliver more cost-effective primary, home and specialty care – capabilities that got turbo-charged during the COVID-19 pandemic. These companies continue to disrupt fee-for-service by innovating targeted care delivery and services, winning loyal payer partners and patients alike.
In a recent webinar, PINC AI’s revenue enablement and growth experts, Gerry Meklaus and Tony Malcoun, discuss the major trends propelling change in the healthcare industry and share some tips on how to best deliver and finance healthcare amid this evolving, dynamic landscape. What follows is a digest of their conversation.
Understanding Market Dynamics
It comes as no surprise that health systems are under incredible pressure resulting from the COVID-19 pandemic. Staff burnout, inflation in the cost of both labor and supplies, and persistent global supply chain issues are all contributing to a very complicated environment as the industry moves from pandemic to endemic.
To better understand what’s happening in today’s healthcare market, Malcoun breaks down the three main trends in the following clip – transition from fee-for-service to value-based care, the rise of the payvider and a focus on consumerism.
Ultimately, according to Malcoun, there are several players – including companies we wouldn’t have traditionally thought of as healthcare companies – attempting to disrupt the marketplace as well as disrupt traditional providers, “all of which are vying to lock in consumers and provide a level of experience and quality in responsiveness that’s differentiating and compelling such that they begin to own the market.”
Adding to this are a number of technologies, like telehealth and remote patient monitoring, that are giving consumers a degree of power and control over their healthcare. Tech has given consumers a range of choices and tools by which they can self-drive their care and select who they align with.
So how can a health system respond given this very complex, competitive environment? Malcoun and Meklaus dive into four strategic imperatives.
1. Create a High-Value Delivery Network
Ten years ago, there was a lot of activity spurred by the initial Medicare Shared Savings Program (MSSP) around setting up clinically integrated networks (CINs) as a means for health systems to begin experimenting with taking on more risk. Given today’s dynamic landscape and the push to risk-based models, new disruptive forces are really requiring these networks to raise their game in terms of:
- Understanding the payer contracting strategy.
- Getting physicians engaged and educated around the business environment of risk.
- Having the resources and operational capabilities to manage populations and understanding what’s necessary as we take on greater levels of risk.
- Integrating historical claims data with electronic health record (EHR) data and pushing it back out to clinicians so that they’re educated and informed.
- Addressing the needs of physicians by specialty as well as physician incentives.
In thinking about a high-performing CIN capable of competing with disruptors and truly locking in consumer loyalty, Malcoun sees six necessities for health systems:
2. Build a Portfolio of Diverse Access Channels
Moving into the next portion of the webinar, Meklaus shifts the focus from ‘providers’ and what some of the transformation opportunities are to ‘consumers’ and the major shifts that are happening in sites of care since the COVID-19 pandemic.
“Hospital outpatient departments are shifting to ambulatory surgery centers (ASCs) in office-based sites. Emergency department utilization is moving to retail clinics and urgent care to virtual care and home-based care. Hospital inpatient activity is shifting to hospital at home to the extent it’s possible and desirable. The point is that there’s significant pilot activity happening in this space. Activity that was once based almost solely in skilled nursing facilities (SNFs) is shifting to home-based care,” Meklaus says.
Meklaus points out that assets are shifting as well – from high-cost venues to low-cost venues – which bring a lot of economic impact to health systems. Retail malls, which are dying in many communities, are a perfect example, he says. “The mall, with its ample parking, is an excellent footprint for the delivery of ambulatory care, which is why we’re beginning to see organizations take advantage of that environment.”
Due to these shifts and the fact that not all consumer preferences are the same, an omnichannel strategy that segments the population is essential to successfully competing and health systems are going to need partners to deliver, Meklaus explains.
“We have to think like retailers. Retailers do segmentation all the time, focusing on consumer acquisition, retention and loyalty. We need to think about consumers in a different way. Consumers are shopping for health.”
3. Drive Access Through Consumer Centricity
In thinking about today’s healthcare consumers, it’s important to remember they want to be appreciated, that their provider knows who they are and that the provider can deliver care that’s tailored to them.
“Personalization is where the consumer experience is going,” Meklaus says. “It has gone that way in every other digitally intensive transformation and it’s going that way in healthcare, too. Every consumer is now a digital consumer at different levels.” A health system’s competitor isn’t just going to be another health system across the street. There will be Amazon, Microsoft and other large, digitally centric industries that will come into healthcare.
What we need, according to Meklaus, is to move from being a self-centered industry – one that has generally built its processes around the needs of providers and the needs of health systems – to one that has rebuilt its processes around the patient experience and the consumer experience.
4. Execute Your Path to Risk Assumption
Meklaus and Malcoun close the webinar by recognizing that “the way to truly innovate is to unshackle yourselves from fee-for-service reimbursement.” The organizations that have done that are positioned to develop new consumer-focused as well as provider-focused innovations to compete effectively in the healthcare landscape going forward.”
They also point out that the movement to risk and its implications are very complicated. So how is it best accomplished? It takes a thoughtful approach that balances strategic and technical aspects. Malcoun offers some recommendations:
Taking risk enables innovation and the experts at PINC AI™ are helping health systems understand where and how to take that risk prudently as well as how to redesign their healthcare platforms around consumer need and for consumer friendliness.
Care has gone beyond the four walls of a hospital and so has the entire healthcare buying experience. Together with our members, we’re creating new standards for the total care experience so that consumers choose the most valuable organizations – and our member health systems maintain a competitive edge.
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