Consumers are more informed.

The world is more connected, and data is becoming ubiquitous. Policies on interoperability (electronic medical records) are building a personalized data universe. Smart organizations are embracing innovation as business models and consumer needs change.

Perhaps no other industry has flourished more during constant change over the past few decades than healthcare, where employment, revenue growth and new business creation are the norm. With the more recent advances and the exponential acceleration in information technology and connected systems, leaders in healthcare today stand in the eye of the storm.

To explore what’s next, M&T Bank gathered healthcare thought leaders at an event in Baltimore to discuss the current context and effects on various aspects of this sector.

Jack Lewin, group vice president for healthcare and seniors housing for M&T Bank, served as moderator for a panel featuring:

• Aneesh Chopra, president of CareJourney and the first chief technology officer of the United States from 2009 to 2012, provided insight into federal and state policies with the big picture view on interconnected systems and policy with an eye to the future
• Cozi Namer, healthcare industry development lead for Google, provided a unique view on consumer choice – with a deep understanding of what we search for from our healthcare system as individuals

Together we explored both top down and bottom up strategies with a lively discussion.

The summary below highlights views from these experts on questions raised about healthcare trends with far-reaching impacts.

How can recent advances in information technology affect the triple bottom line in healthcare of cost, quality, and access?

For several years now, the growth rate of healthcare cost inflation in the United States has exceeded the overall inflation rate. One aim of policy makers is to encourage healthcare systems to slow this growth. Why? If the industry can lower healthcare inflation to a rate of GDP (Gross Domestic Product) +0, that would free up approximately $3 trillion in economic output – which can provide a significant reallocation of capital across healthcare and to other parts of the economy (climate change, tax breaks).

One important element in reducing healthcare inflation is finding new healthcare delivery methods. Some experts believe primary care has become an undervalued component of the healthcare delivery system. A move to value-based care delivery would see more capital shifting to primary care providers with specialists maintaining current levels. We would see small reductions in spending for ancillary services and larger reductions in spending on inpatient services. Some of the latter could be accomplished by greater use of skilled nursing facilities and other post-acute facilities.

This reallocation of funding is where economists see a significant opportunity to reduce healthcare inflation – a concept that becomes more and more important as the U.S. population ages and Medicare adds 10,000 new patients per day. Our panel advised all healthcare stakeholders to watch for federal government moves to design new policy tools to move the country in this direction.

What does the advent of “consumerism” mean to healthcare?

What do today’s consumers want? According to Namer, “They want magic.”

He added: “Consumers are used to magical experiences. People no longer have to walk in the rain to hail a taxi on the street,” due to technology. In just a few short years since the advent of digital commerce, consumers have become accustomed to a new way of transacting products and services. Transactions and customer service need to feel seamless, instant, and magical. So it follows that when a consumer goes to a healthcare provider or hospital setting, he or she likewise will expect the same level of ease and simplicity. Consumers do not accept differences in service.

Data shows the clear increase in consumer expectations. One panelist pointed out that according to Google, searches incorporating the word “best” quadrupled between 2015 and 2017. We want the best “best toothbrush” as much as the “best rheumatoid arthritis drug.” (172% increase year over year). Additionally, the informed patient will switch providers and pharmaceuticals as much as four times more than the uniformed person. And we are becoming vastly more informed as consumers. How can the healthcare industry keep up with this level of on-demand expectation? For Google, the answer is straightforward: “Focus on the user and all else will follow,” Namer explained.

A healthcare provider’s digital presence also impacts the perception of its service. Providers that implement social media strategies in order to be active and engage with consumers on social media platforms such as Facebook and Instagram perform better (loyalty, return revenue). Tactically, providers need to architect their websites to be optimized for search engines. Patients diagnosed with conditions ranging from psoriasis and COPD to diabetes and allergies are using the web and social media to search for providers and treatment options, and they will make a decision based, at least in part, on what they find there.

Will policymakers or consumers shape the future of the healthcare industry?

The panelists noted that two competing theories of change exist currently. In Chopra’s view, one is the top-down theory. “Policymakers, rightly or wrongly, should lead the healthcare industry to reallocate financial incentives and the delivery system to encourage doctors to form networks with health systems to clinically integrate,” he explained. This theory suggests that a patient’s routing through the system will be optimized, resulting in fewer unnecessary hospitalizations, better utilization of preventative-care services and greater use of assisted living at home rather than in institutionalized care. We see this through Accountable Care Organizations (ACOs), bundled payments, and value based care initiatives.

The other perspective, Chopra added, is the bottom-up theory of change. “This suggests the more consumers are educated about their options, the more they will drive toward the better options,” he said. The problem today, however, is that consumers are not empowered with their medical data – diagnostic codes, procedure history and other information – and a search platform that enables them to find providers and treatments that will offer them the best outcome for their specific problem. If and when that day comes, as it has in other industries such as travel and entertainment, a true paradigm shift could occur.

Are urgent care facilities replacing the primary care physician?

While that remains to be seen, there is no doubt that the trend driving urgent care is resilient. “In some regions of the U.S. visits to primary care physicians are down 34 percent, while use of urgent care facilities is up significantly,” Namer said. “I believe 50 percent of Americans live within 10 miles of an urgent care facility,” which has disrupted the access-to-care landscape. So how might traditional hospitals innovate to protect their market share?

Namer pointed out that the number of Google searches for urgent care take place between 5 a.m. and 6 a.m. “If you go to trends.Google.com and then search it, you will see for yourself,” Namer said. Yet “no urgent care centers are open at 6 a.m.” This presents an opportunity for a traditional hospital to expand and go to market with early morning telemedicine services beginning at 5 a.m. to consult with patients via video chat in their homes.

In addition to brick-and-mortar delivery of care, the panelists suggested hospitals and other healthcare providers need to be aware of these trends, leverage available data to understand what consumers want and when they want it—and then capture this data as opportunities.

How can healthcare providers benefit from advances in other industries?

One of the unique features of the healthcare economy has been a lack of access to feedback (consumer – physician – payor).

When a consumer visits Amazon, the company knows how that customer behaves from the moment that person arrives at the site to when he or she completes a transaction—or leaves without making a transaction. Was an item placed in the cart and then removed? Amazon can leverage the data on every site visit to study how to engage and communicate with that consumer.

For the most part, healthcare lacks such a feedback loop. A hospital patient may or may not see his or her primary care doctor during a given visit. After discharge, he or she may go to a different hospital the next time without the original hospital knowing about it. Providers rarely have the opportunity to take a retrospective look at an individual patient’s behavior. Once we achieve this universal data, the potential to wring out costs in the system are immense.

One potential solution is to allow patients to assemble fully extensive health records in a single, secure application to create a feedback loop. This not only enables all stakeholders to view what worked and what didn’t for this patient, but can create enhanced preventative care opportunities. If history shows that a patient’s provider needs three months’ notice to schedule a wellness visit, the patient can be reminded to book in advance.

The panelists suggested that the healthcare industry should move all backend systems to the cloud to allow IT dollars to be reallocated to higher and better use. Healthcare decision-makers should be asking, “How much money does it take to process a form?” and invest in technology to take cost out of the system. The revenue cycle in healthcare remains one of the most depressing aspects of the business, one panelist said, with too many constituents in the cycle.

In the tech world, partnerships have always been important. Today the healthcare space is witnessing more benefits of this approach. Namer explained that Verily, a life sciences company owned by Google’s parent Alphabet, performs research, but at the present it does not build any products by itself. Instead, Verily is working with GSK (a company that researches, develops and manufactures pharmaceutical medicines, vaccines and consumer healthcare products) on developing a continuous glucose monitoring system to help patients with diabetes. Verily is also building surgical robots with Johnson & Johnson.

What is one of the biggest changes healthcare needs to embrace?

While panelists discussed many market forces changing healthcare today, there are also changes the industry needs to make from within to adapt. One of the most important shifts needed is cultural–embracing innovation, prototyping and implementing a test-and-learn mentality.

Healthcare has always been focused on its facilities. To affect change, the industry mindset needs to focus on talent, emphasizing POP: people, the organizational structure, and partners.

Chopra shared an anecdote about a mayor who wanted to improve asthma levels in his city. He partnered with a drugstore chain to attach inexpensive GPS chips to the asthma inhalers they distributed. This enabled the city to collect data on where the most asthma attacks were happening so they could target those communities for remediation. The result? Lower environmental impacts of asthma at a drastically reduced cost.

Chopra explained that one of the biggest academic medical centers in New York is embedding a new information executive with the C-Suite. This executive’s job is to ensure the company organizes and uses information appropriately by asking, “Do we have all of the information we need to deliver the best care for the patients regardless of where they need the care?” This new role reflects how other industries also build new products and services today.

Each panelist agreed that healthcare providers need to embrace opportunities to be information- and innovation-driven. The key to a brighter future for every organization is to recognize the disruptive moments as they are happening and adapt to them.

Given this surge of technology, is human society heading toward technological paradise or ecological disaster?

Chopra is optimistic about technology’s impact. “I’m extremely bullish and I am very hopeful,” he said, “because, frankly, there is no other option. As people get better access to information, they hopefully will live better lives.”

Chopra related the story of his collaboration with rock star Jon Bon Jovi, who at the time was serving on the White House Council on Community Solutions. Bon Jovi and his wife, Dorothea Hurley, ran a food kitchen in Red Bank, N.J., that served homeless people. Bon Jovi approached Chopra, noting when he attempted to help some of these homeless people find a place to sleep, no actionable database existed. Chopra connected with the U.S. Secretary of Housing and Urban Development and was told HUD maintained a database of homeless shelters that reported their availability up to three times per day. But the only people with access to the information were government auditors and compliance staff.

Within 90 days of Chopra’s inquiry, the State of New Jersey made the data available on a public website. “To this day, anybody can go on their website and see that availability by every single facility that gets federal funding,” Chopra said. “That is empowerment. We are in an age where the use of information to help people can be powerful.”

Questions?

Learn how the M&T Healthcare Banking Services Group can help you meet your healthcare organization’s banking needs, both today and in the future. We’re here to help.

Christopher Callaghan
Group Vice President
410-244-4041

Jack Lewin III
Group Vice President
410-244-4815