I recently joined more than 4,000 attendees at the Becker's Hospital Review 10th Annual Meeting, held in Chicago in early April, to learn about the most pressing issues in the hospital and health system arena from a deep bench of industry experts. Interesting insights emerged across three of the critical themes that the healthcare industry is contending with, which got me thinking:
1. Disruption: Most of us have been keeping a watchful eye on Amazon’s continued advance into the healthcare space, fearing that the tech giant will target the most accessible and profitable areas within healthcare—attending to the more well-off, -engaged and -insured patients with less expensive healthcare issues. If this were to happen, health systems would be left worrying about the whole community including Medicaid patients and non-profitable services, but they need the profitable parts to subsidize the other. In other words, there’s no mission without margin.
Amazon’s certainly not the only threat in the healthcare space: The event’s panel discussion on health tech disruption inevitably turned to Walmart’s recent move to drop the employee cost of telehealth visits by 90% to $4. Affordability is one way to compete these days, but will quality be compromised? The industry will need to carefully define what conditions are acceptable to treat in this channel. On the flip side, if “free” services help people to engage with their health, is this the kind of bold idea that Haven (the organization formed by Amazon, Berkshire Hathaway and JPMorgan Chase) will pioneer? If so, the year-old venture might need to act quickly as Humana is already working to erase members’ copays from their primary-care telemedicine offerings.
Meanwhile, we’re witnessing the demise of health systems’ hospital-centered model. Chronic disease accounts for about 75% of healthcare spending, and Jefferson Health CEO Stephen Klasko shared that 50% of the care now taking place in hospitals is projected to move to the home. Can we solve this problem by revamping the old way of thinking of healthcare transformation as a hub-and-spoke strategy of clinics feeding hospitals? Instead, I envision inverting this scenario to put patients at the hub, various care sites (home, hospital, virtual care) would serve as the spokes, and the rim would comprise the technology that connects it all (electronic health records, interoperability solutions and artificial intelligence).
#BeckersHR19 keynote panelists coined a new term: “Administrative Hospice” to describe the adoption of AI by #doctors and the 15% who don’t get it. As our own research also found, #AI is indeed a big transformation coming our way: https://t.co/mTf0pzchmn via @ZSAssociates— Pratap Khedkar (@PratapKhedkar) April 4, 2019
There’s certainly no shortage of problems to be solved in our nation’s healthcare system, particularly as care delivery undergoes a much-needed overhaul. As provider organizations continue to emphasize wellness and preventive medicine models, hospitals and health systems are feeling vulnerable—and it shows. But as this industry-wide shift grabs the attention (and pocketbooks) of tech companies and other potential disruptors, surely there’s more that can be done from within healthcare’s four walls.
2. Technology: Technology is quickly penetrating hospitals and health systems, and artificial intelligence, in particular, is garnering a lot of interest. The overall sentiment at the Becker’s Hospital Review event echoed ZS’s AI in Healthcare study findings: The notion of employing AI as an assistant to optimize workflow and manage revenue cycles is practically routine now, and most providers seem to embrace it.
A sure sign that times have changed is that medical knowledge used to double every 10 years, but now it’s every 73 days. While the concept of AI in the exam room makes some uncomfortable, won’t the medical profession need some type of machine-assisted way to keep up with the deluge of new information?
Another way that AI can pitch in is by solving one of healthcare’s biggest problems: the looming talent shortage. During one of the meeting sessions, Klasko and Marc Harrison, president and CEO of Intermountain Healthcare, spoke about the need for both knowledge and wisdom in approaching the upcoming talent shortage. Healthcare will still need people for their human touch and wisdom, but their knowledge and input could be enabled, cultivated and managed differently.
At the other end of the tech spectrum, the electronic health record (EHR) seems to be healthcare’s most unloved technology. Harrison highlighted EHR usability (not interoperability) as the biggest failure, saying that it’s the only technology that requires adding people to make it useful. Similarly, Martin Arrick, managing director at Standard and Poor’s, mentioned that EHR installs have a negative financial impact on the associated health system. Despite enterprise technology’s convenience for healthcare consumers, it seems to need a reboot.
If such a reboot can solve healthcare’s EHR woes, then AI can be positioned to make effective treatment decisions. But in the meantime, health system execs continue to try to figure out how to build an AI-enabled house on a wobbly foundation.
3. Patient Centricity: Introducing shiny, new technologies into hospitals and opening health systems’ doors to disruption will mean very little if consumers aren’t interested in what they’re serving up. But achieving true patient centricity continues to be a challenge for health systems. As Banner Health CMO Alexandra Morehouse said during the annual meeting, health systems like to talk about their agendas (flu shots), but that’s not what consumers want to talk about (celery juice).
It’s hard for healthcare entities to change their orientation and begin to truly listen to consumers’ needs. For example, a recent consumer poll apparently revealed that the most requested feature for a new unit is an outlet to charge phones in bed. Is clinical becoming table stakes and true consumerism the route to delighting patients?
One speaker touted “co-petition” as the answer to healthcare’s woes. It’s true that working with those you compete against is paramount if patient- and customer-centricity are to be serious goals and not just catchphrases. And to succeed, the patient needs to be at the heart of cross-industry collaboration. But that again raises the ongoing patient vs. consumer debate: At present, health systems still seem to be focused on the patient, while Amazon strongly prefers the consumer, who is “impatient.” Therein lies the key to where and why healthcare disruption will occur.
Health systems are still focused on the #patient, while @Amazon strongly prefers the #consumer, who is “impatient.” Therein lies the key to where and why #healthcaredisruption will occur. #BeckersHR19— Pratap Khedkar (@PratapKhedkar) April 4, 2019
Meanwhile, Amazon has been quietly revolutionizing healthcare with its free B-to-B e-commerce platform penetrating 50 of the top 100 hospitals for all kinds of purchase decisions and selling 800,000 healthcare products from adhesive bandages to hospital rooms. Will it one day complement products with advice just as it now produces content along with the streaming service?
In the weeks since I attended the annual meeting, tech companies have continued their pursuit of healthcare. For one, Amazon’s Alexa has extended invitations to build an arsenal of HIPAA-compliant healthcare skills. This consumer-driven play would help patients access medical information online (search), find the right professional (quality) and access same-day service (convenience). Representatives from many of the IDNs who attended Becker’s event openly discussed their digital front doors, and with this move, Amazon may be positioning Alexa to put patients in front of those doors. It remains to be seen whether this will help or hurt IDNs as patients could be diverted at various points along the journey if they haven’t been given the correct directions.
And Amazon’s potential to disrupt healthcare could be a drop in the bucket compared to Apple’s, according to a recent Morgan Stanley analyst report. Attributing any competitor advantage to Apple’s extensive user base, the report estimates that the company’s healthcare revenue could reach anywhere from $15 billion to $313 billion by 2027.
Disruption and technological solutions are appealing, particularly as hospitals and health systems continue to transition from a fee-for-service to a value-based care delivery model and simultaneously adopt a focus on health, wellness and prevention. But consumer buy-in remains a big piece of the puzzle, and tech companies like Apple and Amazon know a thing or two about what consumers want—and how to give it to them.