“How did you go bankrupt?”
“Gradually, and then suddenly.”
– Ernest Hemingway, “The Sun Also Rises”
Hemingway’s quip is a good summary of the state of innovation in healthcare: industry disruption remains gradual, despite an often-predicted inflection point and the COVID-19 boost to adoption of better service models and technologies. However, I do believe we are on the cusp of that long-discussed, sudden disruption.
Investments in health technologies skyrocketed to $14.7 billion in the first half of 2021, and are expected to continue. The rapid adoption of virtual care delivery and other convenient forms of care during the pandemic gave both healthcare providers and consumers a look at how some parts of the healthcare system could be radically different.
Healthcare is becoming more decentralized. While data are playing a more important role, we still haven’t fully optimized both business and clinical processes. We have the technology, but we’re missing a critical layer of connection.
Until we connect people, data, and technology, we will not create healthier people and healthcare organizations.
Signs of Change
Healthcare is notoriously resistant to rapid change. And it has to be – people’s lives are at stake. Businesses from other sectors have seen health’s slow pace of technological integration as an opportunity and made investments in the hopes of successfully disrupting the status quo. Some have faltered. Haven, for instance, had a vision of offering the same convenient online experience Amazon.com does for its retail customers. Others, like Ro and One Medical, have found their footing in the primary care space.The pandemic forced quicker adoption of certain technologies and delivery systems. In some cases, though, old habits are reasserting themselves and the utilization of care delivery models that emerged during the pandemic have fallen from their peaks. While this might appear to be a brief pause on the innovation curve, I see the overall trajectory still headed toward change.
Disruptors that excel at creating better overall experience and connectivity are ready to build on consumer experience, infrastructure, and investments made during the pandemic. They are using existing technologies, not previously adopted in healthcare, to offer patients a different and more convenient way to receive care.
It’s time to think long-term about the types of connection needed to ensure our systems are ready to adapt and lead through disruption. At Nordic, we’re working together with our clients to prepare for the impact of three big trends: decentralized care, healthier data and healthier people, and optimum performance.
Adapting to Decentralized Care
Health delivery has changed quite a bit over time. For example, the growth in specialties over the last 50 years has moved patients away from a single doctor’s office and into a complete healthcare system that features a web of medical specialties.Decentralized care – or “anywhere/everywhere care” – has moved us further away from that one-on-one interaction in a physical location to care from more sources that is delivered differently and available in more places. This is the first step toward expanding beyond acute sick care into evidence-based wellness care.
We are beginning to see care delivery by a variety of professionals, some of whom work for entities that are not part of a traditional healthcare system. Examples include corporate concierge medicine, which hires its own doctors and sets up its own systems, or the retail settings that offer everything from all-in-one clinics to vaccines or a COVID-19 test. Beyond that, the number of acute care centers and urgent care centers has grown, some tied to retail locations and others that exist on their own.
Already, new entrants have begun to siphon health consumers from existing healthcare systems. While most can weather the initial paper cuts, the focus on convenience, better experiences, and more (and more frequent) health management touchpoints will be tougher to staunch. Health organizations have to plan for that long-term impact. The industry might still be in the slow end of the adoption curve, but the inflection point is inevitable. When that happens, revenue loss and the time it takes to innovate will make it hard to catch up.
Healthier Data, Healthier People
Traditionally, patients visit health professionals only periodically, which leads to point-in-time snapshots of their health. There are no data about the person between encounters, which is problematic: most of what accounts for patient health can be tied back to things other than acute care, such as behavior, genetics, socio-economic status, and environmental factors.Wearables and sensors have begun to revolutionize healthcare and health outcomes. Patients can now remotely send continuous data in real time to their healthcare providers and paint a more holistic view of themselves and their health. Personal technology, such as smartphones, can also accrue meaningful data about habits, spending, location and other factors that influence health outcomes.
The new volume, variety, and velocity of data create an opportunity to start combining clinical data with consumer-generated data, public databases, and data from healthcare outside a clinical setting (e.g., home care). What has been missing is true connection between things like daily resting heartrate, number of steps walked, or how much alcohol was purchased with the clinical information available in health IT systems. At the moment, those data are not brought together in a way that supports making the best, most efficient use of it to drive to better outcomes. Investments in the right infrastructure – one that is scalable, extensible, and highly interoperable – will ensure EHR, ERP, and other systems work together seamlessly.
While traditional healthcare players may be slow out of the gate, others won’t be. Big technology companies, all of which have shown an interest in health, routinely fund and acquire new technological entrants with an eye toward creating that clinical connection with the health consumer. That should make health systems concerned about care businesses that will sit in between them and the consumer in ways that don't exist today.
Optimum Performance
The pandemic taught the world much about the vulnerabilities in our health systems and how to respond rapidly to change. It also made it tougher to handle complex management of costs, regulation and reimbursement, physical locations and infrastructure, supply chain and inventory, and clinical care models.Our clients, and all the healthcare systems, responded both incredibly quickly and heroically to COVID-19. But in the United States, that shift to new models of clinical operation left the system unable to weather the enormous revenue hit. In the end, it required financial help from the federal government.
Optimum performance is about generating the clinical and operational insights for an organization from the combination of EHR and ERP data in a way that supports the use of advanced analytics, automation, and new algorithms. It’s about building resilience using flexible staffing models and rethinking the supply chain and physical footprints. It's also about creating more efficiency to take advantage of where we are in the healthcare decentralization curve – the early stages – and freeing up resources to invest in innovations to prepare for the latter part of the curve and what the disruption will ultimately bring.