EM E RGI NG I SSUE S TOP1 TRENDS 0 to Watch (and Act Upon) in BY LAURA P JACOBS . 2020 B eyond election-year dialogue, 1 Economic Pressures which will continue to place health care front and center, For many, the continual financial what should health care system pressures created by expenses trustees be watching in 2020? In rising faster than revenues will be some cases, what may seem all-consuming. A slowing economy, routine trends will require more or worse, a recession, could pose innovative and bold solutions, and new challenges, including shifting some ground-breaking trends may payer mix to increased Medicaid indicate “watchful waiting. ” or uninsured patients as well as deferred elective care. The The Fundamentals continued growth of high-deductible health plans will require an attentive Don’t be fooled if these seem point-of-service collections process “ordinary. Solving the challenges ” and a thoughtful pricing strategy. that some of these ongoing trends With relentless capital needs for present may require bold IT infrastructure and replacing/ thinking and creative solu- expanding facilities, tions to achieve the kind of a focus on margin impactful and sustainable improvement will be results that this environ- critical. Pharmacy ment requires. cost management will TRUSTEE • undamental trends include ongoing F • cceleration of telemedicine, virtual A TALKING POINTS economic pressures, rising consumer care and advances in biotechnology, expectations, an evolving workforce diagnostic equipment and analytic • outine trends present challenges that R and continued movement toward value- and digital tools have the potential for may require more creative solutions to based payment. dramatic impact. effect sustainable change. © 2020 American Hospital Association www.aha.org | January 2020 EMERG ING ISSU ES be top of nmind, as the volatility of traditional health systems. Health assessment identify -- e.g., housing, drug costs can create surprises in care consumers seeking accessible, poverty, hunger, mental health managing expenses. Taking a new affordable and Amazon-like experi- — which your health system can look at ways to optimize human and ences will be attracted to the many address either directly or through capital resources through re-engi- new entrants that seek to fill that community partners? neering care delivery and leveraging void. These will include technolo- technology effectively will be neces- gy-based companies, new primary 3 n Evolving A sary, as “the low-hanging fruit” of care models, national providers of Workforce prior cost-reduction efforts has likely outpatient surgery and imaging, and been plucked. A renewed focus on hospital-at-home providers, all lever- As a field that is primarily depen- ways to reduce waste and unwar- aging an ability to test new models of dent on human resources to deliver ranted care variation through inte- care, unencumbered by the politics services, attention must be paid to grating data and analytics with lean and complex decision-making (and an evolving workforce. With high processes and team engagement fixed costs) of a large hospital or demand for physicians of many will require strong leadership. The call health system. specialties, especially primary care, to make health care more affordable As the population ages, keeping a to serve in various roles across the will be loud and continuous, as will watchful eye on Medicare payment health care sector beyond direct the need to challenge traditional policies as well as continuing to patient care, health systems will have approaches and solutions to yield improve the coordination of care to refresh recruitment approaches and sustainable cost reduction that main- across the continuum for patients evaluate retention strategies. This also tains or improves patient outcomes. with complex, chronic conditions holds true for most clinical and tech- must be a priority for all health nology roles: Health systems must Trustees Should Discuss: Does systems. Implementing strategies provide a workplace that is appealing current operating performance and working with other community to a multigenerational and multicul- match the expectations built into organizations to address mental tural workforce seeking flexible work your long-term financial plans and health and health issues caused by hours, multiple venues for learning, target bond ratings? That is, does poverty and hunger or malnutrition competitive wages and benefits, and your current cash flow generate the also must receive attention from opportunities for advancement. cash required to fund current and health system leaders; the overuse Union activity will continue anticipated capital needs? If not, of emergency departments and to put pressure on organizations what actions are being taken to overlong hospital stays are often to engage employees in effec- address costs and revenue growth? due to these issues and can best be tive ways. This will put additional Have previous improvement efforts addressed through influencing social economic pressure on hospitals, so been sustained? How does the determinants of health. going beyond productivity moni- organization foster an environment toring will be required to assure that encourages new thinking and Trustees Should Discuss: Who individuals are working “at the top bold solutions that position it for are the nontraditional competitors of their license” in efficient ways. future success? in your market and how is your Stress over concern that artificial organization addressing consumer intelligence (AI) will replace jobs 2 onsumer C expectations? How is the organi- must be replaced with strategies Expectations zation poised to succeed under to effectively use AI to reduce the Medicare payment models? How stress of boring, repetitive tasks. Rising consumer expectations of are care delivery models adapting Effective change management a multicultural/multigenerational to address patients with multiple leadership also will be paramount demographic coupled with an aging chronic conditions? What commu- as “change fatigue” can impact population will continue to create nity needs beyond medical care morale, not to mention patient both opportunities and threats to does your community health needs care, across the enterprise. © 2020 American Hospital Association www.aha.org | January 2020 | 2 EMERG ING ISSU ES Trustees Should Discuss: Does expectation that value be demon- 5 Regulatory Changes your organization have a well-defined strated by cost savings and improved human resources strategy that incor- quality. Medicare Advantage plans Health care is one of the most porates all elements of the human already cover 35 percent of individ- highly regulated fields in the U.S., capital value chain and their interrela- uals eligible for Medicare across the so keeping a pulse on federal and tionships: recruitment, performance country, and enrollment continues to state regulatory changes is crucial. management, compensation and grow at a steady pace year over year. Current “hot buttons” revolve benefits, learning systems, produc- Many Medicaid plans are organized around price transparency (beyond tivity management, leadership around HMO-like structures with just posting your charge master), development? Does the strategy defined provider networks and, in site-neutral payments and drug anticipate more changes in the future some cases, at-risk payment models. costs. Nationwide shifts to single- to the roles of care team members Watch for increasing activity payer or public options will receive across the continuum — serving of employers in your market to a lot of talk but no action this elec- patients in their homes, through contract directly with providers tion year. Site-neutral payments virtual technology, as well as in for certain specialty services go beyond CMS policies: Many traditional settings? In what areas are (e.g., Amazon with City of Hope health plans (e.g., Anthem, United) vacancies (or overuse of agency or for cancer care) or to take risk for have instituted payment policies overtime pay) most severe, and what total cost of care. Payers such as requiring pre-authorization and recruitment or retention strategies UnitedHealth (through Optum) and potentially disallowing payment for are being deployed to address the many Blue Cross Blue Shield plans certain surgical or imaging proce- challenge? Has the health system are developing their own provider dures in hospital-based settings. played an active role in working with networks. Health systems with Whether mandated or not, academic institutions and educational a blind eye to changes in payer being ready for retail medicine by resources to promote the training of strategies run the risk of being enabling technology and simpli- individuals at all skill levels in creative marginalized. fied pricing structures to provide ways? What is your organization’s All of these trends require consumers accurate information leadership development and succes- increased collaboration and data about their potential out-of- sion plan? sharing between physician organi- pocket costs will be a competitive zations (either employed or affili- advantage. Be alert to changes in Shifting Sands ated groups) and hospitals — and state-specific Medicaid policies; physician leadership to drive the shifts in coverage, payment models Market movement in the following necessary changes in care models and rates can be severe depending areas is highly variable, depending on to effect value-based care delivery. on stresses on state budgets and your state, region or town. But they the political climate. remain highly impactful and require Trustees Should Discuss: What is constant observation to avoid missing the health system’s payer strategy Trustees Should Discuss: How signs of rapid change. to address commercial, Medicare is your organization prepared for and Medicaid trends in your region? pricing transparency? What is its 4 Value-Based Payment How is the organization fairing under strategy to respond to site-neu- the current value-based payment tral payments for outpatient Despite some fits and starts, the structures? How “healthy” are care? Does it have a competitive ongoing march to value-based hospital-physician relationships to outpatient network — inclusive of payment will continue through 2020 drive improvements in care across outpatient surgery and imaging and beyond. While no payment mech- the continuum? What opportu- services? What do you antici- anism has yet to become a panacea, nities exist to work directly with pate at the state level in terms most payers continue to move away employers both within and outside of regulatory changes or shifts in from “vanilla” fee-for-service to an your community? Medicaid policies? © 2020 American Hospital Association www.aha.org | January 2020 | 3 EMERG ING ISSU ES 6 rowth of Outpatient G Trustees Should Discuss: How organization they aspire to be, and is your outpatient network poised what they will (and will not) do to and Post-Acute Care to compete with the likes of CVS achieve that goal. The growth of outpatient and and Walmart? Is its financial perfor- post-acute care is not new, but mance sustainable, and how easy Trustees Should Discuss: Do it is receiving greater attention is it for prospective patients to our strategies and actions match as competition heats up and access your services? Do you have our stated vision? What degree of financial performance is scruti- a post-acute strategy that assures transformation is required to get us nized. Virtually all health systems patients can move seamlessly there? Do we have the right leaders continue to grow their physician across the continuum of care and or leadership approach to get us enterprise, either through acqui- receive care consistent with your there? Has organizational structure sition of physician practices or health system’s standards? and function matured consistent through contracting in clinically with the size and scope of the integrated networks. But there 7 ealth System H health system? Is our governance is also a plethora of primary care Complexity structure and function geared to and specialty care models that lead the current and future health are either privately funded (e.g., Health system complexity will care enterprise? Oak Street Health, One Medical) continue to increase. Whether your or sponsored by large public organization is a single community Revolutionary Potential companies (CVS, Walmart) that hospital or a multihospital, multidi- are expanding rapidly across the mensional system serving multiple While not new, many of these trends country. This will put pressure on states, external trends demand that are gaining traction quickly — how health systems to assure that their health systems operate effectively dramatic will the change be in your outpatient strategy is competi- across the care continuum and environment? Close monitoring and, tive in terms of patient service, across multiple functions. Your in some cases, advancing the appli- affordability and care coordination, organization could play a role as a cation of these disruptive elements and provides facilities and other payer, technology/innovation accel- warrant attention for organizations to resources attractive to physicians erator, clinical research resource, remain relevant as the future unfolds. and other clinicians. educator and professional training Likewise, the high demand for site as well as a care provider in 8 elemedicine and T post-acute care, given the aging of acute, post-acute, outpatient, virtual Virtual Care the population and push for “right and retail care. care/right place” has fostered the The sheer complexity of running Telemedicine and virtual care have expansion of a variety of post- the information technology or come of age. They have moved from acute providers and venues of analytics function for many health the pilot stage and use in select care, including hospital care at systems is daunting, let alone the areas to being a key consideration home. Many health systems are revenue cycle process for so many for virtually every service — from finding that partnering with orga- different care venues and payment primary care to intensive care. For nizations that specialize in rehab, models. This level of complexity many health systems, telemedicine skilled nursing and home care demands new types of leaders and and virtual care are still viewed as a is more feasible than operating approaches to leadership. It also care model in its infancy, but many their own post-acute services. requires organizations to determine of the new entrants leverage the But setting up service-level what they can and should do alone convenience of telemedicine and agreements and assuring smooth and where partners can bring exper- virtual care to attract consumers and transitions of care still require tise and focus. Even more impor- create loyalty. They also provide a the constant attention of health tantly, hospitals and health systems critical linkage with many specialty system leaders. must articulate a clear vision of the services for rural providers. © 2020 American Hospital Association www.aha.org | January 2020 | 4 EMERG ING ISSU ES For example, voice recognition in the hospital and home setting TRUSTEE is growing and assisting patients TAKEAWAYS with everything from adjusting the temperature in their hospital room to Board discussions in the year ahead should address both routine and disruptive contacting their care manager from trends. home. Wearables (think Apple watch) • ow does our organization foster an environment that encourages new thinking H that track key health indicators (EKG) and bold solutions that position it for future success? as well as using cell phone apps to • hat needs beyond medical care does our community health needs assess- W manage chronic care and leverage ment identify — housing, poverty, hunger, mental health — which our health behavior modification tools have system can address either directly or through community partners? been and will be widely promoted. The only holdup will be the pace at • oes our organization have a well-defined human resources strategy that D incorporates all elements of the human capital value chain and their interrela- which payment models keep up with tionships: recruitment, performance management, compensation and benefits, these digital and virtual advances. learning systems, productivity management, leadership development? Trustees Should Discuss: What is • ow is our organization faring under current value-based payment structures? H your health system’s plan to adopt • s our organization prepared for pricing transparency? I and scale the use of virtual tech- • ow is our outpatient network posed to compete with nontraditional competi- H nology? Has it gone beyond the tors such as CVS and Walmart? pilot stage to being a routine way • n what ways are wearable technologies or cell phone apps being incorporated I that care is delivered for appropriate into chronic care pathways? services? How are wearable tech- • o our medical staff approval processes and care pathways consider new D nologies or cell phone apps being therapies or diagnostic approaches? incorporated into chronic care path- • ow are we leveraging technology and analytics to make business decisions, H ways — or when is the timing right drive clinical decisions and improve efficiencies? for that? • s our governance structure and function geared to lead the current and future I 9 iotechnology and B health care enterprise? Clinical Advances Biotechnology and clinical advances and Google increasing their role in nity setting? How are we consid- continue to incorporate precision medical research, leveraging their ering genomics in our care delivery health concepts. Many of the most powerful analytic engines, traditional approaches? Have we set priorities advanced are primarily provided in clinical research organizations may to focus philanthropy on the most academic medical centers (e.g., either be challenged or will need critical research efforts? CAR T-cell therapy), but genomics to find new partners to accelerate is being applied in many settings research efforts. 10 dvanced Analytic A to take population health to a new and Digital Tools level. Diagnostic equipment is Trustees Should Discuss: How do becoming more portable (hand-held our medical staff approval processes Blockchain, AI and other analytic devices) and increasingly incor- and care pathways consider new and digital power have the porates AI (imaging equipment), therapies or diagnostic approaches? potential to create new levels of which changes both the venue Do we have a strategy to work efficiency in traditionally cumber- and role of clinicians in using the with academic medical centers to some processes — for example, equipment. extend the reach of research and/ in revenue cycle. But in many With organizations like Apple or new therapies into the commu- cases, these applications are just © 2020 American Hospital Association www.aha.org | January 2020 | 5 EMERG ING ISSU ES emerging and are still waiting to current performance and shedding affordable; payers demand more be unleashed in significant ways. light on opportunities for redesign. efficiency, less waste, lower cost; At the same time, organizations our workforce demands greater that seize the power of some of Trustees Should Discuss: How flexibility, less stress, competitive these advanced digital tools could are we leveraging technology and pay…the list goes on. We can be the game changers in both analytics to (1) make business deci- be daunted by the complexity reducing administrative costs and sions; (2) drive clinical decisions; and and often conflicting changes driving out waste. (3) improve efficiencies? What are expected of health care systems, Partnering with technology our plans to embrace AI within the or we can embrace many of companies that are working on these organization? Should we be part- the opportunities that will make applications could be an opportunity nering with others to see how we health care better for consumers or a distraction for hospitals and could transform key functions like and providers of care. As the health systems. Determining the revenue cycle or population health saying goes, “running away from organization’s readiness to radically management? the problem only increases the transform key functions will be distance to the solution. 2020 ” critical, but in any case, leveraging Conclusion will be another year to seize the the potential of advanced analytics in challenge and embrace change to your organization is a first step. Most Health care remains a tornado improve health care. leaders acknowledge their current of change due to the many dilemma: being data rich and insight demands from all stakeholders: Laura P Jacobs, MPH (Laura. . poor. Improving basic business Consumers demand change to Jacobs@ge.com) is managing prin- intelligence across the organization is make our services more acces- cipal of GE Healthcare Partners. She fundamental to understanding both sible, less fragmented, more is based in Los Angeles. © 2020 American Hospital Association www.aha.org | January 2020 | 6