We’ve already surpassed six months since the completion of the 2022 March Healthcare Classic and we’re back with another analysis. As we did in the Three-Month Recap, we are evaluating the impact of the Top Four trends on the 2022 healthcare agenda. The four final trends included (14) Workforce Challenges, (14) Omnichannel Care, (1) Medicare Advantage, and (1) Platform. Continue reading to learn more about the progression of the trends and how the industry is reacting to them.
2022 Champion: Workforce Challenges (14)
Consistent with our Three-Month Recap, Workforce Challenges (14) remains at the forefront of conversations. Our Selection Committee debated many perspectives in the final rounds, but it’s clear they selected the most impactful trend to be the Champion.
Just before our Three-Month Recap was posted, the American Hospital Association (AHA) released the first section of a three-part report, which outlines immediate and long-term strategies to help hospital and health systems combat workforce challenges. Since then, AHA released the other two guides. The second guide covers data and technology to help the workforce, while the third guide covers team building.
On July 12, The White House announced a $40B American workforce rescue plan, in which the healthcare workforce received $7B. Additionally, organizations are taking matters into their own hands in an effort to identify solutions. In September, Modern Healthcare reported that many healthcare organizations are beginning to implement apprenticeship programs. Due to strict industry regulations, organizations have been hesitant to incorporate apprenticeships in the past. However, with workforce shortages peaking throughout the pandemic, apprenticeships are offering organizations a different way to provide education and jobs. Not only do apprenticeships grow the workforce, but they are also increasing retention and diversity.
All of these efforts seem to be making a significant impact as the U.S. Bureau of Labor Statistics reported that the healthcare industry gained over 60,000 jobs in September 2022. The healthcare job market is now comparable with pre-pandemic levels in February 2020.
Top Two Trend: Medicare Advantage (1)
Medicare Advantage (MA) (1) was the 2022 runner-up and the Selection Committee expressed their unanimous support for the trend. Most notably, the Kaiser Family Foundation (KFF) reported that more than 28 million people are enrolled in a Medicare Advantage plan in 2022. While UnitedHealth Group and Humana account for 75% of MA enrollees, smaller organizations are hoping to gain market share by concentrating their efforts on smaller or regional plans. After this year’s Open Enrollment period, it is anticipated that over half of Medicare enrollees will be in MA. Along with increased support, star ratings reached a record high in 2022; however, due to the removal of pandemic flexibilities, these are expected to decline in 2023.
Additionally, as MA gains more enrollees, plans are facing criticism from experts and federal watchdogs. According to the New York Times, 8 out of 10 large MA insurers submitted inflated bills, and 4 out of the 5 largest players were involved in federal lawsuits for abusing risk adjustment. To artificially inflate revenue, insurers have participated in up-coding or overdiagnosing patients. Despite the scrutiny and overspending, regulations for 2023 did not include any significant updates to risk adjustment practices and experts are doubtful that regulators will crack down on these issues.
Another major announcement related to Medicare Advantage is Walmart’s partnership with UnitedHealth Group. In September, the two companies committed to a 10-year value-based care partnership, featuring the launch of a new MA plan. The companies expect to reach hundreds of thousands of Medicare Advantage members through the partnership. Certainly, this also impacts Walmart Health’s Omnichannel business in a big way, and speaking of….
Top Four Trend: Omnichannel Care (14)
In the Three-Month Recap, we discussed a few organizations and their strategies to implement Omnichannel Care (14). However, consumer interest now seems to be compatible with the industry’s efforts. According to PYMNTS, over 119 million U.S. consumers now receive care both online and in person. 46% of consumers are embracing a combination of digital and traditional care, while only 15% of consumers solely engage with healthcare professionals in person.
On the other hand, healthcare organizations have not slowed down on their rapid expansion of omnichannel strategies. After a fierce bidding war in late August and early September, one of the new “Big Four” in healthcare, CVS, emerged as the buyer for home health company Signify Health. The retail giant has been aggressively building its healthcare strategy over the last few years. With the $8B acquisition, CVS has the chance to unlock the value of home care as part of its strategy. According to Signify’s CEO, Kyle Armbrester, the home health company expects to visit over 2.5 million patients through in-person and virtual care this year.
Another major deal was Amazon’s acquisition of primary care company, One Medical, for $3.9B. Similar to CVS, Amazon has been rapidly gaining healthcare market share. In 2018, Amazon purchased PillPack, a full-service online pharmacy. Leveraging this acquisition, Amazon eventually created Amazon Pharmacy, which focuses on digital prescription fulfillment and includes free delivery for Prime. With Amazon’s bold entrance into primary care, its omnichannel strategy is further strengthened. Considering Amazon’s dominance in the e-commerce space, the acquisition has the potential to significantly disrupt the industry. For context, HCA Healthcare is the largest health system in the U.S. and currently serves 1% of the American population. Impressively, 44% of Americans (almost 160 million people) have an active Prime membership in 2022. Only time will tell whether consumer loyalty transfers from e-commerce to healthcare.
Top Four Trend: Platform (1)
As our Selection Committee noted, Platform (1) has historically been an elusive term in the industry. However, as outlined by Becker’s Health IT, four trends are accelerating the adoption of “platformization” in healthcare. The first trend encompasses healthcare movements. This includes the shift towards value-based care, a push towards consumerism, and the federal mandate for interoperability. The second trend is a rapid increase in digital health investments. Third, emerging data models are encouraging organizations to contemplate how platforms may be integrated. Lastly, a competitive market forces organizations to embrace platforms in order to remain strong contenders.
In September, Forbes published an article suggesting that platform as a service (PaaS) is likely to become the superior choice over software as a service (Saas). First, Saas is typically a point solution, while PaaS offers integrated and interoperable solutions. Next, PaaS is able to support interoperability and the shift toward value-based care by creating unified patient records. PaaS can also provide security for all healthcare data. Finally, PaaS allows organizations to connect multiple applications and solutions, while SaaS isn’t a one-size-fits-all solution.
One major player is also making an impact with healthcare “platformization.” In July, Optum (UnitedHealth Group’s provider arm) and Red Ventures teamed up on RVO Health, a consumer-focused platform. Among other features, the platform will offer consumers health ratings via Healthgrades. RVO Health will unite 120 million UnitedHealth Group customers with 50 million members from Red Ventures. As predicted in the Three-Month Recap, this trend is already gaining significant traction. Keep an eye on it for the 2023 bracket!
Stay tuned for future posts and insights on the blog as well as LinkedIn.