Opportunities for Digital Transformation of the Healthcare Ecosystem in 2018 and Beyond
In order to truly transform and create opportunities for digital transformation of the healthcare ecosystem in the United States, all involved healthcare executives must examine the role they play. They must examine the unique opportunities available to them and how the approach they take may synergize with – or detract from – the ecosystem as a whole. Health plans, employer groups, hospitals and health systems, physicians and medical practices, and healthcare consumers and patients all have distinct, overlapping and, at times even opposing interests in the digital transformation of the healthcare ecosystem.
In a previous post, I reviewed the Six Key Trends for Digitally Transforming Your Healthcare Organization.
This first post of a new series of posts labeled as “2018 Healthcare Opportunities” will highlight specific opportunities and challenges faced by the various executives involved with and impacted by the digital transformation of the healthcare ecosystem. In future blog posts within this series, I will provide additional information about the specific constituents and digital transformation topics presented in this post. And I will provide information to help you focus your digital transformation initiatives in 2018 and beyond.
Digitally Transforming Healthcare Takes a Village
No single participant contributing to the digital transformation of the healthcare ecosystem can unilaterally effect a meaningful transformation. The entire healthcare ecosystem must be better organized and integrated across multiple constituents; with continual focus on where real value is derived and which approaches, technologies and partnerships provide real ROI and strategic control. Some considerations for each member of the healthcare village include (which will be discussed in depth later in this series):
♦ Health Plans:
Greater Emphasis on Alternative Payment Models and Risk-Contracting
Contrary to what some may believe, payers have invested heavily in alternative payment models and will not abandon them based on political uncertainty. There are compelling business reasons to keep moving forward.
Collaborative Partnerships in the Digital Transformation of the Healthcare Ecosystem
The growth in alternative payment models intended to address value and reward cost-effective outcomes demands that health plan payers and providers address traditionally weak collaboration and data sharing practices.
Drawing the attention of new members and retaining existing members are the primary reasons health plans are investing in member engagement resources. As health insurance shifts from the traditional B2B to a B2B2C or B2C model, health plans are investing more in customer service and member engagement programs. These include:
- Customizing communications to specific member needs
- Utilizing data-driven marketing to target new members
- Creating user-friendly “retail” experiences that make it easier to purchase health plans.
Use of Social Determinants of Health to Identify and Manage Risk
Socioeconomic issues, such as homelessness, food insecurity, lack of transportation, and patient health literacy all have a direct impact on health outcomes and costs. Increasingly, alternative payment models are taking into account social determinants of health. For the payer, the challenge is to collect data that’s considered reliable enough to set payment policy based on the data.
Tools and Assistance to Improve Outcomes and Lower Costs
Health plans are in a natural position to help their members and their contracted providers develop their clinical, administrative and financial literacy and capabilities. These capabilities can be provided by:
- Helping members and providers assess and develop digital literacy
- Identifying and providing tools and content to make members and providers more efficient and cost-conscious
- Sharing available resources and finding opportunities to leverage new resources
A Note About Employer Groups
Employer groups and other sponsors with some level of responsibility for paying for healthcare can largely be considered to be closely aligned with health plans. Transforming their part in the healthcare ecosystem centers around helping their employees make the most cost-effective choices having the best possible outcomes.
♦ Hospitals and Health Systems:
Hospitals have been under tremendous market, regulatory and cost pressure for years. While delivering quality care with good outcomes is always a goal, hospitals and health systems must address cost issues and patient satisfaction in order to survive – particularly under value-based reimbursement models.
Cost Efficiencies and Supply Chain Management
Value-based reimbursement models require healthcare organizations to accurately measure and compare healthcare costs against patient outcomes. Health systems must move to automate and streamline their supply chain process to gain cost efficiencies. Utilizing health information technology to gather and analyze supply chain data is a key area of focus.
EHR’s & Customer Relationship Management Capabilities
Long a core capability of financial, retail and other mainstream businesses, customer relationship management tools are making their way into healthcare. In value-based reimbursement, it’s particularly important to be able to track, nurture and improve patient relationships. And have the data to substantiate these improved relations.
Revenue Cycle Management
Revenue cycle management is changing as healthcare consumers and patients take on more responsibility for payment. Tracking and collecting payments from individuals is very different than collecting from health plans. Hospitals and health systems need to make sure they are prepared to handle both individuals and traditional payers.
Mergers & Acquisitions – And Partnerships
Hospitals and health systems are searching for ways to improve profit margins and have turned to mergers, acquisitions and divestitures as a way to improve margins. Others are splitting up their hospitals into outpatient surgery, skilled nursing facilities, labs and/or imaging centers. Entering general partnerships with other organizations – that lack a formal risk-sharing component – is yet another approach.
Payer Partnerships – Risk-Bearing and Others
Payer-provider partnerships may vary in type, size, location and financial model. Accountable care organizations (ACO), patient-centered medical homes (PCMH), pay for performance and bundled payments are increasingly common financial arrangements. There are also co-branded and less intensive partnerships. Regardless, all successful partnerships require close communication between stakeholders, improved interoperability/data-sharing, and technology to reducing administrative burdens.
♦ Physicians & Medical Practices:
Like hospitals, physicians and medical practices are under intense market, regulatory and cost pressures. And they face similar challenges – and opportunities – as do hospitals and health systems. They also have some opportunities to help transform themselves and their practices:
Telehealth & Virtual Care
More and more individuals – particularly Millennials – are demanding the convenience and potential cost savings associated with services provided via telehealth; particularly in the areas of mental health, urgent care and dermatology. While reimbursement for telehealth and virtual care is still not comprehensive, the expectation is that federal and state health programs will start to cover many forms of virtual care and that commercial programs will follow their lead.
Personalizing Treatment in Digital Transformation of the Healthcare Ecosystem
Medical providers are starting to personalize treatment using genomics and advanced diagnostics. And many of their patients are beginning to take a more active role in their health. Partnerships with health plans and other 3rd parties are helping with personalizing treatments.
Use of Social Determinants of Health for Decision-Making
Just as social determinants of health promise to help improve value-based care models, social determinants of health data can also help physicians improve the health of their patient by addressing non-medical factors that impact health. For the provider organization, the problem is identifying what social determinants of health data is important and how to translate that data into decision-making at the point of care and thereafter.
♦ Patients and Consumers:
Healthcare consumers and patients are often the last people considered when improving outcomes and lowering the cost of care. But the last few years have seen a surge in the idea of healthcare consumerism and the engaged patient. Several considerations are important:
Transparency of Cost & Quality
With the growth in high-deductible health plans and the increasing shift of financial responsibility to consumers, individuals are demanding information to help them better understand their benefit information and financial obligations.
Collaboration, Education and Support Key to Digital Transformation of the Healthcare Ecosystem
Patient/member education and satisfaction is a significant priority for all healthcare constituents. Programs and tools to help people understand when care services are needed, where they can be obtained on the most cost-effective basis and how to help ensure the best possible outcomes are in high-demand.
Consider Multiple Viewpoints in Digitally Transforming the Healthcare Ecosystem
Hopefully this post has provided some insight into the individual and common opportunities and challenges faced by health plans, hospitals and health systems, physicians and medical practices, and healthcare consumers and patients. In subsequent posts in this series entitled “Opportunities for Digital Transformation of the Healthcare Ecosystem”, I’ll provide more details about each of the healthcare ecosystem partners identified in this post.
Do you want to know more about how to transform your healthcare organization? Do you have processes that need automation? Can your IT department keep up with the workload for digital health change in this complex and changing environment?