Identifying Transformative Healthcare Trends
Throughout our complex, dynamic ever-changing healthcare environment there is only one guarantee, CHANGE is certain. Continuing advancements in technology, regulation changes, increasing healthcare costs, and volatile mergers are just a few of the changes that are inevitable in the foreseeable future. So, how do we strategically prepare for changes in the healthcare industry that we cannot even predict yet?
There are two main industry trends that we believe will continue for the foreseeable future.
1) Healthcare cost will continue to increase
2) Disruption in the “Healthcare Food Chain” is inevitable – Big Tech making entry ways into Healthcare
According to the Centers for Medicare & Medicaid Service’s (CMS) recently released National Healthcare Expenditure Projections through 2026, national healthcare spending is projected to grow 5.5% per year on average reaching $5.7 trillion by 2026.
With the cost of healthcare increasing and payment models shifting from volume to value-based reimbursement, provider’s increase in revenue cannot keep up with their costs. Value-based reimbursement puts financial pressure on providers, and accelerates healthcare organization’s desires for efficiency, cost control, and sustainability. An increasingly popular strategy to fulfill these goals is improving the integration of care across the continuum through healthcare mergers and acquisitions. Hospital mergers and acquisitions are increasing at a rapid rate. Healthcare organizations announced 115 merger and acquisition transactions in 2017, the highest number in recent history.
According to a 2018 survey completed by Premier Healthcare, roughly 25% of the 45 healthcare C-suite leaders surveyed are engaging in a healthcare merger or acquisition for increased integration. The organizations intend for integration of care across the continuum to provide efficient, effective patient care.
In addition, big tech companies like Facebook, Apple and Amazon all have begun to strategically target the healthcare industry seeing it as a system rife with administrative inefficiencies, opaque prices, and customer dissatisfaction; in other words, a huge opportunity.
Google sees the future of healthcare being driven by structured data and AI. A good hunch considering about a third of the world’s data is generated through the healthcare industry. Apple carved a niche for itself in the healthcare industry by standing up its own line of outpatient medical clinics as well as partnering with established healthcare providers like Stanford Medicine, utilizing their Apple Watch to monitor heart conditions and warn of heart attacks. Look at the CVS and Aetna merger; designed in part, to help provide patients with better pharmacy benefits across the continuum of care.
Below is a visualization of the fiercely competitive consolidation practices we see today.
Ultimately, changing the healthcare landscape will not happen overnight, but larger tech organizations are beginning to position themselves to drastically change healthcare as we know it.
This is a scenario that could play out over the course of the next decade:
- Apple Watch monitors your heartrate, warns you preemptively of a potential heart attack or other condition
- Through you’re smart phone or Apple Watch you can directly speak to MD
- MD evaluates you (virtually) and prescribes medications
- Your pharmacy as well as partnering insurance provider are notified
- Amazon next day delivery ships you medical devices and/or prescriptions
- In less than 24 hours you identified a health concern, had it evaluated by a medical professional and received all aspects of your plan of care
How would a scenario like this affect your organization? Throughout healthcare, change is and will remain constant —rather than resisting or ignoring it, thriving with change is an approach that will enable you, your team and organization to succeed. The proactive leader not only sees change, but seizes change; by learning new tools and processes to be effective in a new landscape, assessing what may be required operationally and personally, and partnering with key stakeholders in identifying actionable items to take on these opportunities.