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Perspectives on a selected key
topic
November / December 2020 |
 hat
key healthcare business trend(s) for 2021 are you most concerned
about stakeholder preparedness for, beyond continued efforts to
contain the pandemic and deployment of vaccines?”
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Mark Lutes
Chair, Board of Directors / Member of the Firm
Epstein
Becker & Green |
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I am concerned that delivery system participants are not
sufficiently planning for the impact of health delivery in
the retail setting. The conceptualization is that the big box
retailers will predominantly play a role in urgent care.
However, these retailers can use their convenience and price
predictability to win consumers for other clinical journeys.
As they scale, they will have the opportunity for referrals
to imaging, labs, and ambulatory surgery among others.
Particularly where the retailer adds the power of digital
tracking and follow-up, traditional health systems may find
they lose key revenue segments to the pervasive
consumer experience generated by these brands.
The
tech giants’ health care initiatives have not yet moved much
of the health care market. It would, however, be foolish to
underestimate the degree to which the digital giants will
eventually participate. Digital pharmacy has been only an
early foray. Other service lines can be anticipated, and
scale, brand and connectivity will, in time, transform other
segments. Prudence in planning suggests anticipating where
those inroads will occur and assessing, and adopting to, the
downstream impacts.
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Chris Sukenik
Principal
BDC Advisors |
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Looking beyond continued efforts to contain the pandemic and
prepare for the deployment of vaccines, healthcare is on the
verge of a new era of price transparency which will cause a
value revolution for providers, health plans and patients.
CMS’ Hospital Price Transparency and Transparency in
Coverage rules require unprecedented levels of transparency
of negotiated rates, which will have far reaching impacts on
the healthcare system. The key questions for providers are
“what impact will these changes have on my organization” and
“how should we prepare to take advantage of this looming
disruption.” It is important to note that there are ongoing
legal challenges to both rules. However, whether these
challenges are successful or not, the market is moving
steadily toward greater transparency of price, quality and
service and providers and health plans will need to
proactively prepare.
With negotiated rates publicly
available, providers and health plans will need to focus on
sharpening and delivering on their value propositions for
consumers, including individuals and employers. Transparency
of negotiated rates will reveal substantial price variations
across providers and health plans. Providers will find
themselves in a position of needing to explain the price
variability and high-priced providers will need to justify
their price premiums to patients. Healthcare providers will
need to follow in the footsteps of other industries by
finding and delivering a differentiated value proposition to
consumers across dimensions likely to include clinical
quality (e.g. hospital performance, episode performance),
patient service / experience and price position. In
parallel, providers will need to deploy strategic pricing to
maintain and strengthen market position. Providers will be
faced with important strategic decisions on which services
to price competitive to market and which services warrant a
premium. How effectively health systems recalibrate price by
services—based on size, growth potential, price relative to
market and price elasticity—will help decide who wins and
loses market share in the coming years.
Similarly, health plans will need to pursue differentiated
consumer value propositions focused on all aspects of the
quadruple aim (access, cost, quality and experience). Health
plans will need to employ strategic pricing and increase
member use of alternative sites of care to ensure continued
success. Health plans will face important decisions on how
to reimburse services moving forward. Opportunities to guide
patients to high-value providers and sites of care using
benefit design and patient incentives will be essential.
Further, the MLR rebate opportunity, which allows health
plans to include patient incentive payments against MLR
requirements, will accelerate volume migration to high-value
providers.
The new rules and general market trends
present important implications for providers, health plans
and patients. Developing a thoughtful value proposition and
comprehensive approach to strategic pricing in an era of
consumerism and transparency will be no-regrets moves for
2021 market success.
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Wendy Gerhardt Dorfman
Senior Manager
Deloitte |
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Health care organizations will have many challenges to
juggle in 2021, not the least of which is the continued
COVID-19 pandemic and the eventual distribution of vaccines.
Among other key topics in health care, price transparency
and interoperability are critical regulations taking effect
in 2021 and their strategic implications may be
unfortunately overlooked by some.
Hospitals, health
systems, and health plans will begin 2021 with two new
regulations:
- Price transparency:
In late 2019, the administration released rules that
would require hospitals and health plans to publish
privately negotiated rates for hundreds of non-emergency
“shoppable” services. The rules are part of an effort to
create more competition by giving consumers pricing
information that can be used for making health care
decisions. Hospitals must begin publicly publishing
their rates annually effective January 1, 2021 and
health plans are required to begin publishing their
rates monthly January 2, 2022.
- Interoperability:
Last March, HHS’s Office of the National Coordinator for
Health Information Technology (ONC) and the US Centers
for Medicare and Medicaid Services (CMS) released final
rules aimed at promoting interoperability. The
regulations are effective January 1, 2021 and intend to
make it easier for patients to access certain claims and
encounter information (including cost) in a readily
shareable format, and they establish new requirements
for hospitals to send automated electronic notifications
when an individual is admitted, discharged, and/or
transferred to another facility.
The Deloitte Center for Health Solutions recently
conducted a survey of 30 finance executives to determine
whether hospitals and health systems were prepared to abide
by the new rules. Only about half of respondents (53%) said
they were “prepared” or “very prepared” to comply. A
majority of respondents said the COVID-19 pandemic put them
behind in their efforts to comply with the new regulations.
Being compliant with regulations is of course
important. The rules require significant resources (people,
technology, dollars) to comply. With many indicating they
are unprepared, some may need to immediately figure out
their compliance plan. Organizations also should put in
place a replicable process since hospitals will be required
to comply annually starting in 2021 and health plans will
need to do so monthly starting in 2022.
Strategically, there are broader considerations for
executives. Organizations may need to consider how they will
better engage with consumers. Both regulations aim to enable
consumers to make their own health care decisions. The data
being shared should be done so with the end-user in mind:
the consumer. Consumer-friendly apps, tools, and trained
staff also should be put in place. 43% of surveyed
executives said that they would undertake consumer
engagement initiatives as a result of the regulations.
The regulations also may drive the competitive landscape
to change, and organizations may need to consider how they
will position their data (rates, quality, and outcomes) and
better collaborate with other stakeholders. In our survey,
57% of executives said that they would likely conduct a
market and competitor analysis, which can be important for
helping drive strategic decision-making.
These
considerations and more should be top of mind for executives
– it is more than about being compliant. Price transparency
and interoperability are regulations that may be a catalyst
toward broader strategic opportunities for health care
organizations. Executives should consider how they will move
their organizations forward.
This
publication contains general information only and Deloitte
is not, by means of this publication, rendering accounting,
business, financial, investment, legal, tax, or other
professional advice or services. This publication is not a
substitute for such professional advice or services, nor
should it be used as a basis for any decision or action that
may affect your business. Before making any decision or
taking any action that may affect your business, you should
consult a qualified professional advisor.
Deloitte shall
not be responsible for any loss sustained by any person who
relies on this publication.
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Hank Osowski
Managing Partner
Strategic Health Group LLC |
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Calendar year 2020 is certainly a forgettable year. The
COVID worldwide pandemic, a chaotic political environment,
civil unrest, closed businesses and higher unemployment as
well as travel restrictions and new rules for living have
all placed tremendous pressure on businesses and families.
Anxiety and uncertainty are the hallmarks of this most
harrowing year. And throughout all of this, our colleagues
in the healthcare space have been on the front lines of
efforts to contain the spread and treat the millions who
have become ill from this virus.
If there is one
characteristic that has best defined healthcare in 2020 it
is disruption. Everywhere we look no sector of our industry
has been untouched. Hospitals and health systems may have
been the most highly impacted and certainly the most
visible. New emergency care protocols were required, entire
units needed to be converted to deal with the reality of a
highly contagious disease and safeguard to protect their
most valuable resource, the physicians, nurses and support
staff who were indispensable. Primary care and specialty
physicians needed to pivot how they practice by limiting in
person visits in favor of telehealth virtual visits. And
this doesn’t even begin to address challenges and
difficulties of the other highly impacted healthcare sectors
such as skilled nursing facilities, home health agencies and
others.
Though there are many areas where rapid
disruption is transforming healthcare sectors and
marketplaces, two standout as particularly transformative.
First is a new work dynamic that is fundamentally changing
how and where we conduct business and provide services in an
uncertain and quickly changing ecosystem. For leadership and
staff this includes finding new means of collaborating in a
disconnected and remote environment. Physicians and nurses
have needed to develop new care protocols for treating the
conditions of this virus on the fly, and to do so under
pressure of an increasingly fragile patient population. In
several healthcare sectors, the challenges of workforce
shortages effected many clinical disciplines (nurses,
pharmacists, therapists, etc.) as well as countless support
areas. Long after the current pandemic has subsided, these
shortages are bound to continue given the aging demographics
of our population and the increased penetration of retailers
in the healthcare space. If they have not already done so,
hospitals and traditional healthcare providers will need to
realize that they are competing for labor not just with
other hospitals and clinics but with the corner supermarket
and big box retailers which also need pharmacists,
physicians, nurse practitioners and clinical technicians
too.
A second area of disruption impacting our
industry is the cloud of uncertainty hanging on the possible
opinion options for the Supreme Court’s consideration of the
constitutionality of the Affordable Care Act “ACA”). In a
country divided over so many issues, the ACA has been a
matter that has triggered many deeply held beliefs and
disagreements since its inception. Now the Supreme Court is
considering the question of whether Congress’ 2017 action,
to zero out the tax penalty in the individual mandate to buy
health insurance, causes the entire ACA to be
unconstitutional as ruled by a Texas Federal District Court
judge and upheld by U.S. Court of Appeals for the 5th
Circuit. The breadth of the ACA ultimately impacts all
sectors of the health care industry with far reaching
consequences. Whatever might be one’s opinion of the law,
the ACA implications for Medicare’s innovation programs,
Medicaid expansion and employer-sponsored health insurance
could be profound. Individual marketplaces has resulted in
healthcare coverage for more than twenty million Americans
who were previously uninsured. If ruled unconstitutional,
the residual impact will have a devastating and disturbing
effect on hospitals, physicians, other providers of care and
health plans, not to mention the loss of coverage by
individual enrollees. A final ruling may not be known until
late Spring early Summer of 2021, but in the meantime, we
are left to plan in a cloud of uncertainty. Speculation by
“legal experts” based on oral arguments held on November
10th, suggests that the Court will find a way to sever the
potentially unconstitutional provision from the remainder of
the ACA thereby keeping the other major provisions of the
Act alive. This would be a positive outcome, but it is far
from certain.
Though often perceived as a negative,
if channeled appropriately disruption,
can be a
significant motivator for positive change. I, for one, am
encouraged by the commitments that have been made by all
sectors of the healthcare industry to press forward during a
period when it may have been easier to just give up.
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Lindsay Resnick
EVP
Wunderman Thompson Health |
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While COVID mitigation will continue to dominate health
care’s 2021 agenda, it’s also an accelerant for other
challenges across the health care landscape. Here are six
areas of focus* to be prepared for as we move into next
year:
1. UNINSURED AMERICA At the end of 2019 there
were approximately 29 million uninsured Americans, and it
was trending upward. With massive COVID-driven layoffs and
furloughs the loss of employer-based health care coverage is
estimated to result in upwards of 10 million people being
added to the ranks of the uninsured. The impact on payer
product strategy, provider uncompensated care, and Medicaid
expansion will be widespread.
2. HEALTHCARE
CONSUMERISM The nation is dealing with unprecedented
financial burdens—COVID business closures, unemployment, and
health care costs outpacing wages. People are delaying care,
skipping prescriptions, and scaling back on preventive
health. Now more than ever the onus is on health care
stakeholders to help customers make personalized,
value-based financial and clinical decisions.
3.
TRUST BARRIERS The pandemic has shaken consumer confidence.
Debates over evidence-based science, public health failings,
and the politics of COVID has wary consumers asking: will
you do the right thing when it comes to my health? There’s a
trust gap, and to overcome it health care brands must exude
empathy and sincerity, deliver health information that moves
consumers to action, and adapt quickly to the pace and scale
of market change that’s ahead.
4. HEALTH DISPARITIES
Black and Latinx communities see significantly higher rates
of diabetes, hypertension, dementia, and COVID deaths at
younger ages. Addressing health inequities, Social
Determinants of Health, and factors such as health literacy
among different population groups has to be part of every
stakeholder’s approach to solving for the imbalance in
access to health services in underserved, vulnerable
communities.
5. MENTAL HEALTH 2020 is the year
everything changed—work, school, travel, entertainment and
healthcare—and it’s taken a far-reaching psychological toll
on Americans. Over half of GenZ and Millennials report
struggles with mental health during the pandemic. Support of
mental and behavioral health is essential: identification of
warning signs, elimination of barriers to care
interventions, and removal of social stigmas around mental
health disorders.
6. CYBER HEALTH In reality, it’s
not cyber health...it’s health for the cyber consumer! It’s
estimated that 20% of all medical visits in 2020 will be
virtual. Digital technology helps consumers take ownership
of their health—self-diagnose, change health behaviors,
enable compliance, monitor treatments, and interact with
providers. The revolution is over. Cyber health has won.
Digital transformation is now table stakes.
Where
there’s change there’s opportunity. 2021 will be another
year of ‘business as unusual’ in health care. As you reset
strategic priorities and reclaim your value proposition, be
ready for uncertainty on the march down the road of COVID
recovery…your customers are depending on you.
*BONUS
#MASKUP PLEASE The evidence is
in: wearing a mask prevents the spread of COVID. High-speed
video reveals that hundreds of droplets ranging from 20 to
500 micrometers are generated when saying a simple phrase,
but that nearly all these droplets are blocked when the
mouth is covered. CORONAVIRUS DROPLETS CAN TRAVEL 20
FEET. Follow the 3W’s to do
your part to prevent spread of COVID: Wear a mask, Wash your
hands & Watch your distance.
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