Meet the Field of 64: The Newcomers
As we launch the 2022 March Healthcare Classic, we have many newcomers to this year’s bracket. Check out the new trends below along with a brief overview of each. Will one of these trends be the next reigning champion? How will they fare compared to the returning trends from last year? To join the conversation and submit your selections, please click here. Stay tuned as we reveal Round 1 results this Friday, March 17!
General Trends Region
(in order of Seed)
1) Private Equity Funding
Private investment in healthcare has seen steady growth for many years. From 2010 to 2020, investment increased from an estimated $41.5 billion per year to $119.9 billion per year. With healthcare spending projected to grow by 5.5 percent annually through 2027, private equity funding will follow suit.
Additionally, uncertainty produced by the pandemic along with industry turmoil caused a deceleration in investments from 2020 to 2021. However, as pressures from the pandemic ease, there is an anticipated surge in healthcare investment.
3) Care Navigation
Care navigation is a service provided by a designated professional who helps patients access and coordinate healthcare as they move through the continuum of care. This is especially beneficial when care is fragmented or complicated and can greatly improve the patient experience.
Once considered an elite service for patients who could pay out-of-pocket for such care, care navigation is becoming mainstream, in large part due to data showing how the practice can improve outcomes and reduce cost. Care navigators can provide the logistics needed to coordinate appointments in a specific way, arrange for transportation, provide language translating and other services that eliminate wasted time, missed appointments and other inefficiencies. Care navigation is also demonstrating the ability to achieve greater health equity in some markets.
6) Patient Experience
Patient experience is the perceived value of a patient’s interactions across the healthcare system and is seen as a key step toward patient-centered care. Since 2020, patient experience has been colored by the cloud of COVID-19 – initially, with the fear of attending in-person appointments and now, frustration at understaffed offices and facilities.
In 2022, increased communication is still critical to delivering a positive patient experience. In person, acknowledging the current challenges out loud can be a surprisingly effective way to neutralize frustration. Another answer is turning to technology to help absorb the backlog. This includes online scheduling, patient portals and other ways patients can help themselves without involving staff.
7) Patient Engagement
Patient engagement is a measure of how involved patients are in their own care. Data shows that greater patient engagement corresponds with better health outcomes.
As millennials age and become greater consumers of healthcare, the industry is seeing greater demand for self-management tools and telehealth services. Consumers are ready and willing to self-serve. Engaging with tools that empower patients is a win-win. Patients get the control they crave, and providers have less of a burden.
Providers should keep in mind that digital consumers expect an interaction much like they get from their smartphones (85% of consumers own one). Investing in interoperability, a robust platform and mobile-forward strategies will be key to patient engagement that soars.
Partnering was extremely popular before the pandemic hit, and while some health systems and hospitals are still merging and acquiring, most are not. Even before the pandemic, plenty of healthcare entities embraced their small, independent status, choosing not to join forces to achieve scale, but instead building out their own capabilities.
DIY (do-it-yourself) at the enterprise level in healthcare involves selectively expanding services in the right places at the right time, maintaining all authority and control. There can be a strategy in not partnering, which will always involve relinquishing some amount of governance.
In 2021, the number of partnership, merger and acquisition transactions between hospitals and health systems was down. 49 transactions occurred last year, which is the fewest since before 2011. On the other hand, the size of the transactions increased dramatically. The average size of smaller partner by annual revenue jumped to $619 million, increasing from $388 million in 2020.
In 2022, the industry expects to see some pickup in activity. But while hospitals and health systems still have their hands full with the frontline issues of surging costs and acute labor shortages, there will not likely be a return to pre-pandemic levels this year.
10) Provider Engagement
Provider engagement is a strategy to strengthen the relationships between healthcare providers and administration, so that everyone works as a team to further the goals and mission of the hospital, healthcare facility or health system. Greater provider engagement correlates with better patient care and safety, lower costs and improved provider satisfaction and retention.
In light of the stressors put on providers by the COVID-19 pandemic, provider engagement is a powerful tool to combat many of the issues outlined in Workforce Challenges.
11) Provider Experience
Underpinning the patient experience is the provider experience. Providers can’t be expected to bring their all to their patients if they feel abused, under-appreciated or burned out. As more physicians move to employment, it’s incumbent on the health systems to work harder to improve the provider experience.
As the latest COVID-19 surge comes to an end, the relief alone may improve the provider experience in the short term. Going forward, a lesson learned from the pandemic is that healthcare workers, like everyone, have their limits, and taking steps to maximize their experience can have a positive domino effect on the entire organization.
13) Innovative PBMs
Managing pharmaceutical costs continues to be a high priority for employers, and pharmacy benefit managers (PBMs) are facing increased scrutiny about their role in rising prescription drug costs and what many see as a broken, opaque pharmaceutical supply chain.
While some argue that legislation is required for reform, others in the private sector see a business opportunity to disrupt the industry and contribute to the value-based healthcare movement. Several innovative PBM startups are entering the market with greater price transparency at the core of their mission. Other innovations include alternative medication delivery systems, direct-to-consumer technology and fixed per-patient per-month fees.
14) Workforce Challenges
Labor shortages, especially among nurses, have remained an issue within the healthcare industry. However, the COVID-19 pandemic’s effect on the workforce has created an unprecedented rate of burnout across all positions. Workers are leaving healthcare in droves while demand continues to increase, creating an expanding gap. A December 2021 study from Mayo Clinic Proceedings found that close to 1/3 of physicians and nurses reported a clear intention to reduce work hours, and that close to 40% of nurses and 25% of physicians intend to leave their practice altogether.
Ways to address labor shortages, burnout and other workforce challenges are front and center in healthcare in 2022. In fact, the American Hospital Association recently called the issue a “national emergency” and is urging Congress to address workforce issues.
Consumerism is infiltrating healthcare. With direct-to-consumer healthcare, a manifestation of consumerism is the patient demand for convenience. People want to know why their healthcare experience can’t be more like their Uber or Amazon experience – immediate action with the tap of a screen.
Self-scheduling options, convenient locations and same-day appointments would incentivize patients to switch providers, according to a recent Harris Poll. The poll further revealed that consumers want providers who are available, with 55 percent of respondents saying they will not schedule the first appointment if there is a lack of availability.
With the last major pandemic occurring more than 100 years ago, it’s not surprising that the worldwide response to COVID-19 was not especially effective or organized. Preparing for an event that no living person had experienced was a tall order. However, what we have learned can help us prepare for the next pandemic and other public health emergencies.
According to the surgeon general, the checklist for maximum preparedness includes: fully funded, staffed and equipped public health departments; manufacturing capacity that can be scaled up quickly; trusted relationships between frontline providers and public health administration, and a crackdown on medical misinformation.
Business Model Innovation Region
1) Medicare Advantage
Medicare Advantage is a private plan alternative to traditional Medicare. The plans are managed by private companies that must be Medicare-approved and agree to follow certain rules. Enrollment in Medicare Advantage grew from 12 million in 2011 to 26 million in 2021.
A growing number of employers are using Medicare Advantage in place of their existing retiree health plan and traditional Medicare coverage. In fact, employer-sponsored Medicare Advantage enrollment grew from 2.1 million in 2011 to 4.9 million in 2021. On the upside, using Medicare Advantage can save an employer money (the cost of coverage is shared with the federal government), and employers and insurers can custom design health benefits to meet the needs of their own retiree populations. On the downside, retirees caught in the transition may experience a disruption in care if the new plan doesn’t include their providers or has new requirements, fees or other access barriers. As a result, employers across the country switching to Medicare Advantage plans for their retirees are seeing some legal resistance.
Accountable Care Organizations (ACOs) are groups of providers who agree to give high quality care to their Medicare patients. As of January 2022, there are 483 Medicare ACOs serving over 11 million beneficiaries.
Participating ACOs pledge to improve the quality and cost of care for a defined patient population of Medicare beneficiaries. In turn, they receive a portion of savings generated from care coordination as long as quality was also maintained. They are considered value-based initiatives.
4) Episodic Risk
As opposed to fee-for-service reimbursement where providers are paid separately for each service, episode-of-care covers all the care received for a specific illness, condition or medical event. Episode-of-care payments are meant to incentivize providers to deliver high quality and cost-efficient care.
The episodic risk to providers is that a patient’s needs for an episode may exceed the predetermined payment for that episode. In the event that the predetermined payment for an episode exceeds the utilized services, providers and payers agree to share in the savings, so there is diminished risk to the payer for overpaying.
6) Partial Capitation
Partial capitation is a combination of predetermined payments per member and fee-for-service payments. The predetermined (capitated) payments are affixed to routine care while fee-for-service payments are applied to extreme health episodes with costs that are far less predictable.
For providers, partial capitation is a less risky alternative to full capitation and gives them more billing flexibility when it comes to complicated cases. This can be a comfortable “on ramp” for providers as they move toward true value-based care.
7) Vertical Integration
Vertical integration is the combination of different members of the health care supply chain, such as when hospitals acquire physician practices or health plans form drug companies. The stated goals with vertical integration are to increase efficiencies and competitive strength and to improve the quality of care.
However, on the current regulation front, stricter oversight of vertical integration is on the horizon, with administrative actions that would inhibit anticompetitive competition and unbundle medical conglomerates.
10) Horizontal Integration
Horizontal integration is the merging of two or more organizations occupying the same space on the health care supply chain. This could be the grouping of several hospitals or the merger of outpatient clinics. By joining forces, healthcare entities can improve efficiencies of scale and increase purchasing power, thereby reducing costs.
During the pandemic years of 2020 and 2021, the market saw far less partnership, merger and acquisition activity between hospitals and health systems, but the deals that did go through were much larger than average, perhaps because only the largest deals survived the market upheaval.
11) Full Capitation
With full capitation, a healthcare provider receives a fixed payment (capitated) per year per member and agrees to meet all the care needs of a broad patient population. Providers are not reimbursed for services that exceed the capitated amount, so while full capitation creates a steady revenue stream, it also comes with risk. It helps payers control their costs because they know in advance what they will spend on healthcare for their entire group of members.
Full capitation is the end goal of a value-based care system. The model incentivizes providers to provide more efficient care, and shared savings in some models can further incentivize providers.
Per Member Per Month (PMPM) refers to the monthly healthcare cost of the average member of a health plan. PMPM is a basic indicator for healthcare spending and forms the basis upon which payers pay providers.
As the industry shifts toward value-based care and away from fee-for-service, PMPM becomes an even more relevant number in determining an appropriate per member price, as many of the new models are based on member numbers rather than visits.
13) Population Risk
As healthcare continues to amass huge amounts of data, the industry can correlate financial risk with population risk. And in a value-based care environment, calculating financial risk based on population risk for a certain disease state can help properly calculate capitated payments and associated risk. Population risk is the proportion of individuals in a general population who are affected with a particular disorder or who carry a certain gene.
14) High Value Networks
High value networks are insurance networks that offer lower copays and coinsurance but a smaller network of providers. They are emerging in the value-based care environment as a small network of providers aggregated by health insurers through an intentional process that evaluates fee levels, quality care, consistent outcomes, substantial integration to ensure a wide range of services and the providers’ ability to cooperate with the health plan.
The end game for health insurers with high value networks is to lower costs and improve quality. Successfully done, the networks are smaller in size but higher in quality and lower in costs for both patients and payers. If this model can continue proving itself, it could be a model for all networks about how to achieve the holy grail of low cost and better outcomes.
15) Risk-Bearing Entities
As the industry shifts away from fee-for-service models, it needs to account for the transfer of risk in the value-based care model. Practices and other provider entities become risk-bearing entities (RBEs) when they accept an outcome-based model in which they are compensated for the quality of care, rather than the volume of care.
Private equity is advancing this RBE-based environment with an infusion of cash. Like most opinions of the value-based model, investors also favor it. In their case, they see this new approach to healthcare as economically sustainable and financially rewarding.
16) Medicare Direct Contracting
Medicare Direct Contracting, officially known as the Global and Professional Direct Contracting Model (GPDC), was recently redesigned and renamed due to concerns raised by stakeholders, who said the model would limit the care options of Medicare beneficiaries.
In late February 2022, the Centers for Medicare & Medicaid Services announced that the model will undergo changes and be renamed the Accountable Care Organization (ACO) Realizing Equity, Access, and Community Health (REACH) Model, making its future highly uncertain.
Care Delivery Region
1) Advanced Primary Care
Advanced Primary Care (APC) is a rising disruptor to the fee-for-service model. It’s defined by holistic care teams guided by a primary care provider, longer care visits, one-stop shops, and professional health coaches. While this is beneficial for the patient, it does not benefit the bottom line in a fee-for-service environment. In the APC model, doctors are paid by monthly fees per member, which gives providers the time and energy to focus more on the patient in front of them. The benefits to large, self-funded employers are especially apparent.
APC promises to lower costs while improving outcomes – the golden chalice of healthcare. Large employers are taking notice of the potential upsides and leading the way, creating some noticeable traction.
2) Whole Person Care
Viewing a person’s health status as merely a summary of their physical condition overlooks many factors that contribute to complete health such as behavioral, emotional and social dimensions. A growing number of providers are looking at a patient’s complete lifestyle to get to the root of the problem and designing solutions that include non-pharmaceutical and non-surgical treatments.
As the demand for behavioral health services grows, and the science of addiction takes center stage because of the opioid crisis, there is an expanding consensus that whole person care is necessary to achieve satisfactory outcomes. We expect this concept to continue gaining traction and involve collaboration between previously siloed disciplines.
3) In-Person Care
In-person care was on hiatus for many patients during the early days of the pandemic. This held the door open for virtual care and telehealth to spread their wings and test the limits of their capabilities. While many will likely continue to use remote offerings, others were relieved to be return to meeting with their providers in person.
In-person care at brick and mortar facilities is still the backbone of healthcare. Going forward, we will likely see a hybrid model between in-person and virtual, which will add flexibility and resilience to the system.
6) Virtual Care
The pandemic accelerated the widespread adoption of virtual care, making it the preferred method of care for millions of patients unable (or unwilling) to receive in-person care. Virtual care replaces in-person visits through phone calls, video conferences or online chats.
In 2020, 46 percent of patients used telehealth services compared to 11 percent in 2019, an increase of 318 percent. The learning curve toward virtual care was shared by patients and providers, many of who were new to the process. As the pandemic shows signs of relenting, it will be interesting to see how many of them continue to consume their healthcare this way.
9) Musculoskeletal Health
Musculoskeletal (MSK) disorders, which include joint, back and other muscle/bone problems, have a high prevalence and are a top healthcare cost driver. In a recent survey, 44% of employers ranked MSK disorders as the top health condition impacting their costs while 85% ranked it among the top three conditions. In addition to the cost of care, MSK disorders also cause a high degree of absenteeism and low productivity among workers. For these reasons, employers are especially interested in better care delivery models for MSK.
11) Digital Care
Digital care includes virtual care as well as the ecosystem of apps, remote patient monitoring, portals and other digital interfaces patients and providers are using to interact. It may also include the connections to and from payers, whose goals are becoming more and more aligned with those of patients and providers.
Digital care depends on interoperability, robust platforms and data-driven technology for it to support the goals and missions of the providers. It also should reduce friction in relationships with patients, who are more often expecting their healthcare interactions to be as easy and immediate as other apps on their smartphones.
14) Omnichannel Care
Telehealth and virtual care experienced a sudden influx when in-person appointments were considered unsafe during the height of the pandemic. Looking forward, it is predicted that healthcare will remain a hybrid model that will balance in-person and virtual care. Omnichannel care gives more control to the patient in terms of how to communicate with their providers, with email, texting and online chatting joining the traditional method of calling and leaving a message.
The pandemic also served as a testing ground for bots and AI-powered screening and triage tools, which helped to route COVID patients to the most appropriate level of care. Having used them in this way, it’s likely that healthcare will continue using them in non-urgent ways to increase capacity and productivity.
16) Concierge Medicine
In concierge medicine, patients pay a doctor a monthly or annual fee in exchange for premium attention like same-day appointments and around-the-clock availability. This arrangement often excludes an insurance company, but most patients with concierge care also carry a health plan, for the likelihood that they will need healthcare their concierge doctor cannot provide.
The model has been around since the 1990s and continues to innovate at the edge of the healthcare field. Doctors with concierge practices like their smaller roster of patients and the reduced administrative burden, and patients like having immediate and unlimited access to their doctor. Critics say that by keeping patient loads small, concierge doctors are making the national shortage of doctors even worse, particularly in primary care. Supporters say that if all doctors could be concierge doctors, more people would enter the profession.
Data and Technology Region
2) Precision Medicine
We know more about human physiology than ever before, thanks to scientific feats such as fully sequencing the human genome. Medical treatment, subsequently, is becoming more tailored to the individual, which is known as precision medicine (or personalized medicine). By ruling out patients for certain drugs and treatments based on their unique physical makeup, patients in theory can avoid the expense and side effects of treatments that have no hope of working for them.
Since the completion of the Human Genome Project, the promises of precision medicine have been promoted at length. While the vision has not yet come to pass, the advent of machine learning and artificial intelligence may help realize this dream.
The pandemic forced the healthcare industry to jump in the deep end on telehealth. Already partially invested, healthcare had no choice but to fully embrace a digital interaction and work through issues in real time.
While telehealth is here to stay, in-person appointments and treatments remain firmly at the core of healthcare. The challenge is to integrate telehealth so that the patient experience of moving between virtual and in-person is easy and frictionless.
The ability to exchange electronic health information smoothly and securely is a key pillar of a high-functioning health system and has long been a healthcare hot topic. Interoperability is reliant on systems and technology that use digital standards so that even different platforms and software can effectively exchange patient data. There are four key domains of interoperability: find, send, receive and integrate data.
While we are far from widespread interoperability, the industry has made great strides in this area. A 2019 American Hospital Association IT Supplement published by the Office of the National Coordinator for Health IT reported that 55 percent of acute care hospitals participated in all four domains, up from 25 percent in 2015. Patients themselves have become a major driver in this area by demanding increased online access to records, which in turn has encouraged investment.
Wearables are technology that can be worn, embedded in clothing or even embedded in a human body – as an implant or a tattoo. To qualify as a wearable, the tech must incorporate a microprocessor and connect to the internet. Wearables in healthcare are devices that collect and deliver biometric data to relevant healthcare constituents.
Wearables hold a lot of promise for healthcare in many contexts, including direct-to-consumer healthcare, telehealth, digital care, virtual care, patient engagement and remote patient monitoring.
10) Digital Front Door
A digital front door is a strategy for extending access beyond a facility, using technology to reach patients wherever they are on their journey. It offers convenience, flexibility and control to patients while promising efficiency and cost savings to providers. Examples of digital front door tactics include self-scheduling through a website or app, e-Registration through a personal device and patient portals.
As the consumer landscape continues to be defined by major brands like Netflix, Starbucks and AirBnB, healthcare can and should step up to the challenge of making its products and services more accessible and convenient, and helping patients enter the healthcare system at the appropriate point of care.
11) Remote Patient Monitoring
Remote patient monitoring (RPM) includes devices that monitor patient health outside the hospital or clinic, such as glucose monitors for patients with diabetes and blood pressure monitors for heart patients. The main benefit of RPM is improved provider decision-making. RPM continually collects data that gives providers greater clinical insight in between visits. Other benefits include reduced readmission rates, improved access to care and a way to mitigate staff shortages.
Insider Intelligence estimates that 70.6 million U.S. patients, or 26.2% of the population, will use RPM tools by 2025. According to Research and Markets, the global RPM systems market is projected to be worth over $1.7 billion by 2027, up nearly 128% from its current $745.7 million value.
12) Population Health Analytics
Population health analytics technology supports many innovations, especially those that involve a shift to value-based care. Tapping the power of big data, population health analytics provides valuable information for the successful delivery of care and analysis including identifying at-risk patients, understanding disease patterns, developing care programs to address specific population needs and allocating resources.
Without population health analytics, most currently promising trends would have no potential. Advanced Primary Care, for example, depends on algorithms that use real-time data to identify patients for appropriate care at their moment of need. Achieving health equity is possible only with the data and computing power that wasn’t available in the past to analyze population health patterns.
13) Machine Learning
Machine learning crunches huge volumes of data to identify patterns that the human brain cannot detect. Health systems are using machine learning to predict illness in individuals and population health risk for a group. Practice managers are using it to optimize clinical workflow, and providers are using it to make faster and more accurate diagnoses, including differentiating between healthy and diseased tissue.
A subset of artificial intelligence, machine learning is a tool that can augment human ingenuity and improve performance, with benefits for both health systems and patients.
14) Total Cost of Care
Total cost of care is the full cost of all healthcare services across an entire population. It’s an accounting metric that is gaining steam as the healthcare industry sharpens is focus on reducing healthcare costs through affordability initiatives.
Proponents of total cost of care say that as more sectors in the healthcare industry accept total cost of care as a standard measurement for understanding healthcare costs, more can be done to address affordability, health equity and getting to the causes of overpriced healthcare.
15) Synthetic Data
Given the sensitive nature of patient health information, the lack of interoperability between and within health systems and the need for large amounts of data to help in decision making, the industry is using synthetic data. Synthetic data is based on real-world data to make it realistic, but it doesn’t use actual patient records so that privacy is protected, and it’s formatted perfectly for analysis, solving the interoperability challenge that comes with actual data. It also contains the desired datasets and nothing more, which results in faster data processing.
Synthetic data joins predictive analytics, machine learning and artificial intelligence in a landscape dominated by mountains of data.