Healthcare Forecast 2021: Top 10 Transformational Trends

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Hospitals set new priorities amid continued disruption

By Geoffrey Martin

COVID-19 forever changed how hospitals and healthcare systems manage patient care delivery, resources, and capacity. As they navigate 2021 and beyond, organizations are rethinking everything from patient care models to growth goals. Top priorities include advancing safety and quality programs, technology and virtual care solutions, consumer engagement, and supply chain strategies. Long-term success will increasingly depend on a mindset towards innovation, digitization, and collaboration with partners that offer unique skills for solving new problems. Here is a look at the key transformations coming to healthcare this year.

Supply Chain Optimization.

The pandemic unveiled critical vulnerabilities at healthcare organizations related to safety, equipment, data availability, and infrastructure. In 2021, hospitals recognize that agile supply chains are a key differentiator. They will continue to collaborate with providers, suppliers, and even non-healthcare companies, to manage resources and increase capacity. At the same time, procurement strategies are shifting with many organizations moving to storage and self-distribution models instead of just-in-time delivery, enabling them to buy in bulk and maintain supply counts. Relationships with primary vendors are shifting to emphasize not just price, but also trust and prioritization during a crisis. Hospitals are also developing connections with back-up suppliers that are often smaller and geographically closer than primary vendors to take advantage of flexibility and speed. As care continues to move outside of the hospital walls, new supply chain models are developing for home, outpatient, and virtual settings. Automation and artificial intelligence (AI) will play a stronger role in the supply chain to reduce repetitive tasks and drive decision making. 

Coopetition Accelerates.

Savvy organizations are moving to cooperative competition, or coopetition, with the new power players entering healthcare, including big-box stores and pharmaceutical chains. Hospitals are leveraging the capabilities of these partners to offload lower-cost care while capturing new referrals, specialty care visits, and stronger patient connections downstream. For example, CVS, Walmart, and other retail organizations can provide primary care, diagnostics such as mammography, and other services more effectively and at a lower cost, while improving patient access and engagement, and expanding the overall market for health services. 

Patient Consumerization.

Years of the Amazon effect compounded by growth in telehealth services during the pandemic have reshaped the healthcare consumer’s expectations. Patients want a fast, streamlined, and friendly experience across the entire care continuum from scheduling to billing. Now is the time for healthcare organizations that want to attract more patients and expand market share to reassess consumer barriers and how they will deploy analytics and patient-centric technologies to drive engagement, convenience, speed, and transparency of care. 

Black female doctor talking to a couple while wearing protective face mask during counseling at doctor’s office.

Personalized Patient Care.

Patients may be enjoying the growing convenience of virtual and digital interactions but personalized care is still the gold standard that drives consumer loyalty. Consumer healthcare research consistently shows that an optimal healthcare experience, whether virtual or face-to-face, requires a personal touch. Patients prefer clinicians who take the time to listen, show they care, and communicate clearly. High performing organizations are rolling out clinician communication programs that teach best practices on how to improve the exam room experience. As virtual care increases, organizations will need to wrap these softer skill sets around a patient experience program with measurable outcomes.

Engaging an Evolved Workforce.

The pandemic, new generations entering the workforce, and the changing national culture are leading to increasingly diverse, inclusive, and flexible work cultures. There is strong evidence that diverse teams and inclusive cultures drive better outcomes, more effective problem-solving, greater engagement, and higher employee retention. Healthcare organizations will continue to offer flexible and remote work arrangements, especially those that have the capital to invest in IT tools and programs. Employee safety and wellness will continue to be a priority with employers increasing testing, remote working, virtual care appointments, mental health services, and programs that address clinician burnout.

Virtual Care Integration.

Providers and patients quickly adapted to a virtualization mindset at the start of the pandemic, which saw Medicare primary care telehealth visits grow from 1 percent to 43 percent between February and April 2020. As it becomes increasingly clear that virtual care has staying power, it is important for organizations to align their virtual strategy with the changing needs of their markets, growth plans, and evolving payment models. The focus now will be on building a virtual program that supports providers and patients in a more meaningful way. Virtual needs to become the way organizations work versus a disconnected component of the strategy.

AI Kicks Into High Gear.

AI and automation are growing rapidly across healthcare, with large organizations harnessing real-time analytics to drive the care process. Command center software platforms, for example, combine systems engineering, predictive analytics, and problem-solving to manage patient flow throughout the health system while preserving clinical quality, safety, and the patient experience. AI is also being deployed in specialty areas such as radiology to reduce redundant tasks, eliminate bias-based reading errors, identify data patterns in images to predict risk, and enhance workflow processes. AI solutions offer faster image processing, expediting time to diagnosis and treatment, while reducing patient risk and dosage exposure. Meanwhile, automation is improving productivity in nonclinical areas by streamlining health system business operations that lean heavily on repetitive tasks, such as supply chain, revenue cycle, and customer service. 

Revenue Diversification.

Conversations with healthcare chief information officers reveal data is becoming the currency of tomorrow. Large organizations are making big investments in data to improve productivity, enhance patient care, and drive additional funding for vital programs. Organizations are also monetizing data/intellectual property through relationships with nontraditional partners in pharma and Big Tech, as well as forming venture capital funds to manage downside risk related to unpredictable patient volumes and volatility of traditional nonoperating investments. 

Mergers Climb.

U.S. hospitals experienced unprecedented financial shortfalls due to COVID-19 and are expected to exceed $320 billion in losses in 2020, according to American Hospital Association projections. Financial pressures will continue to drive consolidation, especially between smaller hospitals seeking shelter with larger health systems. Health system mega mergers are also on the rise as organizations look to drive synergies from scale, leverage data, and grow revenue. 

Payer Transformations.

The impact of COVID-19 not only led to significant health plan funding and design changes, but it also threw off historical utilization rates, forcing employers, providers, and payers to now consider utilization, rates, and risk as they model the coming year. Employers with financial issues are considering changes in plan design or reduced benefits. They will look to partner with providers and payers to better manage costs and employee health. Providers and payers will continue to collaborate to advance low-cost, high-quality care, with a focus on growing ambulatory and virtual care services. Payers will move toward plan designs emphasizing high-quality virtual care and will increasingly recognize home as a path for care, while managing their networks for high acuity and chronic care pathways. 

Geoffrey Martin, MBA, is the global chief executive officer of GE Healthcare Consulting and based in Chicago.

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