ThoughtLeader Excerpts: What key healthcare business trend(s) for 2021 are you most concerned about?

By Clive Riddle, December 3, 2020    

We are all so done with 2020. The current issue of MCOL ThoughtLeaders asks our panel: “What key healthcare business trend(s) for 2021 are you most concerned about stakeholder preparedness for, beyond continued efforts to contain the pandemic and deployment of vaccines?”

 Here’s some excerpts of what they had to say, peering into the new year:

Mark Lutes, Chair of the Board of Directors and Member of the Firm at Epstein Becker & Green tells us in part that “I am concerned that delivery system participants are not sufficiently planning for the impact of health delivery in the retail setting. The conceptualization is that the big box retailers will predominantly play a role in urgent care. However, these retailers can use their convenience and price predictability to win consumers for other clinical journeys. As they scale, they will have the opportunity for referrals to imaging, labs, and ambulatory surgery among others. Particularly where the retailer adds the power of digital tracking and follow-up, traditional health systems may find they lose key revenue segments to the pervasive consumer experience generated by these brands.”

Mark continues - “the tech giants’ health care initiatives have not yet moved much of the health care market. It would, however, be foolish to underestimate the degree to which the digital giants will eventually participate. Digital pharmacy has been only an early foray. Other service lines can be anticipated, and scale, brand and connectivity will, in time, transform other segments. Prudence in planning suggests anticipating where those inroads will occur and assessing, and adopting to, the downstream impacts. “

Chris Sukenik, Principal, at BDC Advisors weighs in with “looking beyond continued efforts to contain the pandemic and prepare for the deployment of vaccines, healthcare is on the verge of a new era of price transparency which will cause a value revolution for providers, health plans and patients. CMS’ Hospital Price Transparency and Transparency in Coverage rules require unprecedented levels of transparency of negotiated rates, which will have far reaching impacts on the healthcare system. The key questions for providers are “what impact will these changes have on my organization” and “how should we prepare to take advantage of this looming disruption.” It is important to note that there are ongoing legal challenges to both rules. However, whether these challenges are successful or not, the market is moving steadily toward greater transparency of price, quality and service and providers and health plans will need to proactively prepare.”

Chris goes on to say “with negotiated rates publicly available, providers and health plans will need to focus on sharpening and delivering on their value propositions for consumers, including individuals and employers. Transparency of negotiated rates will reveal substantial price variations across providers and health plans. Providers will find themselves in a position of needing to explain the price variability and high-priced providers will need to justify their price premiums to patients. Healthcare providers will need to follow in the footsteps of other industries by finding and delivering a differentiated value proposition to consumers across dimensions likely to include clinical quality (e.g. hospital performance, episode performance), patient service / experience and price position. In parallel, providers will need to deploy strategic pricing to maintain and strengthen market position. Providers will be faced with important strategic decisions on which services to price competitive to market and which services warrant a premium. How effectively health systems recalibrate price by services—based on size, growth potential, price relative to market and price elasticity—will help decide who wins and loses market share in the coming years.”

Wendy Gerhardt Dorfman, Senior Manager with The Deloitte Center for Health Solutions leads in by stating “among other key topics in health care, price transparency and interoperability are critical regulations taking effect in 2021 and their strategic implications may be unfortunately overlooked by some.....”  Wendy reports that “The Deloitte Center for Health Solutions recently conducted a survey of 30 finance executives to determine whether hospitals and health systems were prepared to abide by the new rules. Only about half of respondents (53%) said they were “prepared” or “very prepared” to comply. A majority of respondents said the COVID-19 pandemic put them behind in their efforts to comply with the new regulations.”

Wendy reminds us that “being compliant with regulations is of course important. The rules require significant resources (people, technology, dollars) to comply. With many indicating they are unprepared, some may need to immediately figure out their compliance plan. Organizations also should put in place a replicable process since hospitals will be required to comply annually starting in 2021 and health plans will need to do so monthly starting in 2022. Strategically, there are broader considerations for executives. Organizations may need to consider how they will better engage with consumers. Both regulations aim to enable consumers to make their own health care decisions. The data being shared should be done so with the end-user in mind: the consumer. Consumer-friendly apps, tools, and trained staff also should be put in place. 43% of surveyed executives said that they would undertake consumer engagement initiatives as a result of the regulations.”

Wendy also notes that “the regulations also may drive the competitive landscape to change, and organizations may need to consider how they will position their data (rates, quality, and outcomes) and better collaborate with other stakeholders. In our survey, 57% of executives said that they would likely conduct a market and competitor analysis, which can be important for helping drive strategic decision-making. “

Hank Osowski, Managing Partner at  Strategic Health Group feels that “if there is one characteristic that has best defined healthcare in 2020 it is disruption.......Though there are many areas where rapid disruption is transforming healthcare sectors and marketplaces, two standout as particularly transformative. First is a new work dynamic that is fundamentally changing how and where we conduct business and provide services in an uncertain and quickly changing ecosystem. For leadership and staff this includes finding new means of collaborating in a disconnected and remote environment. Physicians and nurses have needed to develop new care protocols for treating the conditions of this virus on the fly, and to do so under pressure of an increasingly fragile patient population. In several healthcare sectors, the challenges of workforce shortages effected many clinical disciplines (nurses, pharmacists, therapists, etc.) as well as countless support areas. Long after the current pandemic has subsided, these shortages are bound to continue given the aging demographics of our population and the increased penetration of retailers in the healthcare space. If they have not already done so, hospitals and traditional healthcare providers will need to realize that they are competing for labor not just with other hospitals and clinics but with the corner supermarket and big box retailers which also need pharmacists, physicians, nurse practitioners and clinical technicians too.”

Hank then states “a second area of disruption impacting our industry is the cloud of uncertainty hanging on the possible opinion options for the Supreme Court’s consideration of the constitutionality of the Affordable Care Act “ACA”)…..Speculation by “legal experts” based on oral arguments held on November 10th, suggests that the Court will find a way to sever the potentially unconstitutional provision from the remainder of the ACA thereby keeping the other major provisions of the Act alive. This would be a positive outcome, but it is far from certain. “

Finally, Lindsay Resnick, EVP at  Wunderman Thompson Health lists “six areas of focus to be prepared for as we move into next year:

1. UNINSURED AMERICA At the end of 2019 there were approximately 29 million uninsured Americans, and it was trending upward. With massive COVID-driven layoffs and furloughs the loss of employer-based health care coverage is estimated to result in upwards of 10 million people being added to the ranks of the uninsured. The impact on payer product strategy, provider uncompensated care, and Medicaid expansion will be widespread.

2. HEALTHCARE CONSUMERISM The nation is dealing with unprecedented financial burdens—COVID business closures, unemployment, and health care costs outpacing wages. People are delaying care, skipping prescriptions, and scaling back on preventive health. Now more than ever the onus is on health care stakeholders to help customers make personalized, value-based financial and clinical decisions.

3. TRUST BARRIERS The pandemic has shaken consumer confidence. Debates over evidence-based science, public health failings, and the politics of COVID has wary consumers asking: will you do the right thing when it comes to my health? There’s a trust gap, and to overcome it health care brands must exude empathy and sincerity, deliver health information that moves consumers to action, and adapt quickly to the pace and scale of market change that’s ahead.

4. HEALTH DISPARITIES Black and Latinx communities see significantly higher rates of diabetes, hypertension, dementia, and COVID deaths at younger ages. Addressing health inequities, Social Determinants of Health, and factors such as health literacy among different population groups has to be part of every stakeholder’s approach to solving for the imbalance in access to health services in underserved, vulnerable communities.

5. MENTAL HEALTH 2020 is the year everything changed—work, school, travel, entertainment and healthcare—and it’s taken a far-reaching psychological toll on Americans. Over half of GenZ and Millennials report struggles with mental health during the pandemic. Support of mental and behavioral health is essential: identification of warning signs, elimination of barriers to care interventions, and removal of social stigmas around mental health disorders.

6. CYBER HEALTH In reality, it’s not cyber health...it’s health for the cyber consumer! It’s estimated that 20% of all medical visits in 2020 will be virtual. Digital technology helps consumers take ownership of their health—self-diagnose, change health behaviors, enable compliance, monitor treatments, and interact with providers. The revolution is over. Cyber health has won. Digital transformation is now table stakes.”