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Entries in Trends & Strategies (114)

Tuesday
Jun252019

Growing where you are already planted

Kristin Rodriguez, Health Plan Alliance, June 24, 2019

 

Dan Michelson, CEO of Strata Decision believes integrated delivery systems need to shift their focus from buying and building hospitals to leveraging their existing platforms to generate growth and often more profitable streams of revenue.  This creates the ability for delivery systems to become a hub for health and healthcare in the future.

What needs to occur for this transformation to take place? 

In an article published in Becker's Hospital Review recapping the 2019 JP Morgan Healthcare Conference, Michelson outlines six ideas for integrated delivery systems to get started on leveraging their existing platform.  Each represents a formidable challenge, but if we work together and take advantage of resources available to us, we can start moving in the right direction.

  1. Embrace the digital front door: Healthcare providers have long excelled at building relationships and trust once consumers walk into our hospitals and clinics.  We need to harness the ability to create that same meaningful relationship, without limiting ourselves to a physical location.  

    Benjamin Isgur, Health Research Institute Leader at PwC Health Research Institute, echoes this advice.  At the recent Alliance Spring Leadership Forum, he underscored that Private Equity investors are particularly interested in anything that gets closer to the consumer.  And consumers themselves are eager for a new era of care delivery, with new venues and new menu options.  If we don't offer consumers a more convenient alternative, someone else will
  2. Get serious about affordability: This isn’t just about transparency or about reallocating resources more thoughtfully.  It is bigger than combining clinical and financial data.  The healthcare cost problem is huge and policymakers, drug manufacturers, insurers, delivery providers and consumers all play a role.

    It's important we avoid the danger that is “everyone’s problem” becoming “no one’s problem.”  As part of integrated systems, Alliance members are particularly well positioned to get a strong line of sight on this challenge.
  3. Don't just provide, prevent: Michelson points to the “strong strategic rationale associated with taking on a broader role of driving health versus only providing healthcare” in the communities we serve.  Policymakers understand this too; Medicaid and Medicare Advantage plans are encouraged more and more toward payment models and benefit design approaches that take on more than just clinical care.

    Just a few themes in the government-sponsored care space include VBIDtelehealthbenefit flexibility, and behavioral health integration, all of which present unique opportunities to leverage the network, venues of care, community partnerships, and more to reimagine the system’s role in the local healthcare landscape.
  4. Partner to innovate, or miss out: Becoming a hub isn’t just about the digital front door or food farmacies. It also means creating a space for innovators to gather, where research and education can occur so that ongoing evolution becomes a core competency of the system.
  5. Target chronic conditions and specific services: This builds on the center of excellence model in profound ways.  Systems that craft a powerful experience for specific chronic conditions or targeted services stand a better chance of maintaining a relationship with those consumers.  Michelson notes that this is both an opportunity and a threat for integrated systems, as we compete more and more with new platforms gaining competency in serving chronic conditions, like those of CVS Health and Walgreens
  6. Don’t just aggregate data – use it:  An Alliance member and informatics leader said that he envisions the day when his informatics teams can stop being data archeologists and can instead be data analysts.  The truth is that integrated systems are still solidifying their competency as data aggregators.  But it’s not enough.  It’s time to turn our attention to applied analytics: practical data sets that provide decision support so that we can gain better insights and pivot our platforms even faster.

With payers big and small across the country, the Alliance member network is a veritable think tank for executives wrestling these questions and challenges.  Join us and work elbow to elbow with your peers at our upcoming events designed exclusively for Alliance organization leaders. You can also meet and hear from Dan Michelson at the Fall Leadership Forum 2019.

Friday
Jun212019

Ten Takeaways From PwC’s Medical Cost Trend Behind The Numbers 2020

By Clive Riddle, June 21, 2019 

PwC's Health Research Institute has just released their 14th annual report on medical cost trends: Medical cost trend: Behind the numbers 2020, which projects the 2020 trend to be a six percent cost increase. As PwC's HRI describes their 47-page report, they project "the growth of private medical costs in the coming year and identifies the leading trend drivers.... based on the best available information through June 2019. HRI conducted 55 interviews from February through June 2019 with health industry executives, health benefits experts and health plan actuaries whose companies cover more than 95 million employer sponsored large group members about their estimates for 2020 and the factors driving those trends. Also included are findings from PwC’s 2019 Health and Well-being Touchstone Survey of more than 550 employers from 37 industries as well as PwC HRI’s national consumer survey of 2,500 US adults."

Here’s Ten Takeaways from their 2020 report: 

  1. Small Uptick: The Medical Cost trend, still rounding to double digits in 2007 (11.9%) and 2008 (9.9%), trended downwards subsequently, to round to six percent since 2016 (6.2%), but have ticked up since the low-water mark of 5.5% in 2017 (and 5.7% in 2018-2019.)
  2. Price, Not Utilization: “Prices have been a larger component of employer benefit costs than utilization since 2004; utilization has hovered around zero percent growth since 2006. Utilization by individuals with employer-based insurance decreased by 0.2 percent from 2013 to 2017 while prices rose 17 percent during that time.”
  3. Impact of High Deductibles: “Average deductibles for employer-sponsored plans tripled between 2008 and 2018. This increase likely has led to a low utilization trend because employees are delaying or forgoing care due to their deductible.”
  4. Stall in HDHP Growth: “The shift to HDHPs by employers seems to have stalled. With 84 percent of employers offering an HDHP option in 2019 and a tight labor market, employers may not be as quick to push HDHPs in 2020.
  5. Acceleration in Retail Rx Spending: “Starting in 2020, retail prescription drug spending growth for private health insurance will begin to increase, hitting between 3 percent and 6 percent annually through 2027.24 The growth in spending can be attributed to the waning impact of generics on the market and the introduction of new drugs.”
  6. Specialty Drug Million Dollar Drugs Pipeline: The portion of total retail drug spending on specialty drugs continues to grow. “We are at an inflection point with drugs in the pipeline. We thought hep C was expensive at nearly $100,000 per treatment. Many drugs in the pipeline are life-altering and come with a price tag of $1 million to $2 million per treatment.”
  7. Growth in Chronic Disease Spending: "Spending by employers on individuals with chronic diseases is nearly quadruple [3.5x] that of healthy individuals while spending on individuals with complex chronic diseases is eight times higher" [8.2x].
  8. Growth in Onsite Clinics: “38 percent of large employers offered an onsite health clinic in 2019, up from the 27 percent that offered a clinic in 2014. An additional 13 percent said they were considering adding one.”
  9. Telehealth Potential: “49 percent of consumers with employer coverage said they are willing to use telehealth in place of an in-person visit.”
  10. Underutilized Wellness and Prevention programs: “For decades, employers have invested in health and wellness and prevention, yet participation remains low.....The small population of employees who participate in their employers’ health and wellness programs generally believe the programs have had a positive impact on their health.”

 

Friday
May172019

The Short List of Major Healthcare Implications from A Declining Birth Rate

By Clive Riddle, May 17, 2019

Like most of the industrialized world. the U.S. birth rate is declining, as evidenced in the new  CDC National Center for Health Statistics National Vital Statistics System May 2019 report on "Births: Provisional Data for 2018."  (the final birth report is scheduled to come out this fall.) The big news from the report is the number of births was the lowest in 32 years, and the fertility rate reached another record low.

Here's highlights from the report: 

  • The provisional number of births for the United States in 2018 was
  • 3,788,235, down 2% from 2017 
  • The general fertility rate was 59.0 births per 1,000 women aged 15–44, down 2% from 2017 a
  • The total fertility rate declined 2% to 1,728.0 births per 1,000 women in 2018
  • Birth rates declined for nearly all age groups of women under 35, but rose for women in their late 30s and early 40s
  • The birth rate for teenagers aged 15–19 was down 7% in 2018 to 17.4 births per 1,000 women
  • Rates declined for both younger (aged 15–17) and older (aged 18–19) teenagers
  • The cesarean delivery rate decreased to 31.9% in 2018; the low-risk cesarean delivery rate decreased to 25.9%
  • The preterm birth rate rose for the fourth year in a row to 10.02% in 2018
  • The 2018 rate of low birthweight was unchanged from 2017 (8.28%)

In a Q&A session with report author Brady E. Hamilton, Ph.D. posted in the NCHStats blog, Hamilton is asked if there was a specific finding that surprised him, which he replied "the record lows reached for the general fertility rate, the total fertility rate and birth rates for females aged 15-19, 15-17, 18-19, and 20-24 are noteworthy. In addition, the magnitude of the continued decline in the birth rate for teens aged 15-19, down 7% from 2017 to 2018, is also historic." Hamilton was non-committal about the trend going forward, stating “these data do not answer the question of why the number of births dropped in 2018 or if the decline will continue.”

  

But assuming the trends do continue, which certainly the opinion of many, there are certainly major implications for healthcare, including this short-list: 

  • Impact of reduced demand for hospital and physician OB services
  • Impact of increased births from higher-age mothers, with greater care complexities involved
  • Longer range reduced demand for hospital and physician pediatric services
  • Longer range reduced available Medicare funding from employed workforce, with growing imbalance of senior retired population compared to working population
Friday
Mar222019

Healthcare Incumbents: Watch Your Sides as Well As Your Back For Disruptions

By Clive Riddle, March 22, 2019 

Reuters reports that “United Parcel Service Inc wants to get beyond U.S. doorsteps with a new push into healthcare.” They tell us “the world’s largest package delivery firm is preparing to test a U.S. service that dispatches nurses to vaccinate adults in their homes, Reuters has learned, as the company and its healthcare clients work to fend off cost pressures and competitive threats from Amazon.com.” 

Deloitte, in a recent paper on the Health Plan of Tomorrow, that is the subject of an upcoming webinar, asks who will win the future of healthcare and health insurance: incumbents or disrupters> They tell us that “incumbents’ decisions will determine wither disrupters will be willing to partner with them in the transformation or compete and disrupt their business models.” 

Disrupters and Incumbents, it seems, are relative terms. We often think of disrupters as startups, and incumbents as established companies. But clearly the terms apply to lines of business, as opposed to the business as a whole. So UPS the incumbent in package delivery can become a disrupter in healthcare. Existing healthcare incumbents need to not just watch their backs for startup disrupters seeking to pass them by, but watch their sides as well, from established disrupters. 

UPS has touted healthcare supply chain management for some time. Then in May last year they announced “Chris Cassidy as vice president of global healthcare logistics strategy. He is charged with leading and advancing UPS’s commitment to the healthcare supply chain, which remains a top company priority….Cassidy possesses 18+ years of global logistics and business change experience, holding various supply chain operations, strategy and transformation roles at global healthcare company GlaxoSmithKline (GSK).”

Reuters states that “the world’s largest package delivery firm is preparing to test a U.S. service that dispatches nurses to vaccinate adults in their homes, Reuters has learned, as the company and its healthcare clients work to fend off cost pressures and competitive threats from Amazon.com UPS did not disclose which vaccines it would be using in the project, but drug and vaccine maker Merck & Co told Reuters it is looking at partnering with the company for the initiative.” 

How far and how disruptive this plays out to be remains to be seen, but the transformative potential is there for more healthcare to be transferred from provider settings to the home. And then of course, when patients with more complex needs have to set foot outside the home into provider settings and back again, there is now the disruption taking place with UberHealth and Lyft Healthcare, who have been around long enough to be incumbents in personal transportation but now disrupt in healthcare transportation. The Uber and Lyft disruption is being further fueled by SDOH (Social Determinants of Health), causing CRM incumbent Salesforce to recently roll “out new ‘social determinant’ tool for patients who need other kinds of help, like a ride to the doctor.” And now Uber and Lyft face startups like Veyo solely focusing on peer-to-peer healthcare transportation. 

So who is an incumbent and who is a disruptor? While answering be sure to watch your sides as well as your backs.

 

Friday
Mar152019

An Innovative Acquisition for HCA

by Clive Riddle, March 15, 2019

Nashville-based HCA Healthcare has just announced that HCA will become the majority owner of the parent company of Galen College of Nursing, one of the largest educators of nurses in the nation.  HCA, of course, is one of the nation’s leading providers of healthcare services, comprising 185 hospitals and approximately 1,800 sites of care.

The announcement states that “The innovative new strategic partnership brings together two of the top nursing organizations in the country in order to increase access to nursing education and provide career development opportunities in nursing to improve patient care. With 94,000 registered nurses, HCA Healthcare is one of the largest employers of nurses in the country, with nurses holding positions from bedside caregivers in a variety of healthcare settings to leadership positions throughout the organization.”

Hospital funding and partnerships for nursing education certainly isn’t new. For example, here’s a website providing a state-by-state listing of 123 such hospital arrangements, which they acknowledge is only a partial list.

But what is innovative is to move beyond strategic partnerships with an outright acquisition.  Not only does the move create synergy for HCA’s staff career development, it should also serve as a burse recruitment tool for HCA, in an environment where hospitals compete for nursing staffing.

Furthermore, this perhaps signals that healthcare organizations will continue to peek and climb further out-of-the-box with acquisitions beyond traditional M&A of other healthcare providers.  Deloitte, in a discussion of the Health Plan of Tomorrow that is the subject of an upcoming webinar, writes that "buy, share or build? is a question many health plan leaders will face as they begin this transformation journey. And accessing these capabilities may require an industry-agnostic approach. As new players break the rules around who plays what role in the industry, health plans may need to turn to want might today be considered strange bedfellows: competitors, providers, manufacturers, technology companies, transactional sector companies, and/or other industries for answers."

The same holds true for healthcare providers as for health plans.  And so HCA and Galen seem to be pairing up on a transformative journey as well.