FEATURE · SPECIAL REPORT Designing the Future:
Inserting the Right People into the Process F
By Pam Arlotto and Mark Hagland
ew would disagree that the U.S. healthcare system is moving through a period of unprecedented change
and challenge. In the wake of the massive COVID-19 pandemic, hospitals, medical groups, and integrated health systems were left both financially destabilized and very short of staff, particularly with regard to nurses and other clinicians, but also in a wide range of areas, such as healthcare information technology, revenue cycle management, and so on. Meanwhile, the cost of the overall health-
care system has become potentially unsus- tainable. On June 14, 2023, the actuaries at the Centers for Medicare and Medicaid Services (CMS) shared with the public and policymakers their annual projections for total U.S. annual healthcare expenditures, predicting that the $4.4 trillion spent in 2022 would balloon to $7.2 trillion by 2031 —which would represent a 63.64-percent increase in nine years. Not only are those figures eye-popping;
their real-world
impact is that the purchasers and payers of healthcare—the federal government, state governments, employers, and other private purchasers, and all the health plans—will be focusing on pushing as much cost out of the system as possible while demand- ing improved value for money spent as the U.S. population ages and experiences an explosion of chronic disease. And that puts the leaders of patient care
organizations in an exquisitely challeng- ing position, as they work to move their organizations forward into the future. How to become smarter, leaner, more effi- cient, and with better patient outcomes? A part of the answer, as everyone has always known, has been through lever- aging information technology. But the old ways of doing so, focused on simply implementing electronic health records (EHRs) and other technologies, and hop- ing for the best, are no longer cutting it. There is a clear “burning platform” for
the redesign of the healthcare system. Key questions emerge – can we reduce the com- plexity of the business and care delivery models? Can we build on electronic health records, analytics systems, and other digi- tal health applications to drive new levels
of efficiency, effectiveness, and consumer experience? What skills are needed to drive this change and what leadership roles are best for transformation and innovation? These are absolutely key questions that each healthcare organization should answer today. Leaders of patient care organizations
must attempt to leap from yesterday to tomorrow. Rather than automating exist- ing processes as they have done in the past, they must reinvent the business and care delivery models while addressing today’s challenges of workforce, revenue, and costs. Data and technology use will be democratized and less centrally controlled by IT. Leaders must think broadly and deeply about strategy, and consider the opportunities presented by a connected, digital health ecosystem.
Strategizing forward into change At the core of everything is a key question: who should be the leaders in organiza- tions going forward, and what kinds of skill sets, lived experiences, and insights will they need to bring forward to move their organizations forward? Years ago, we talked about “CIOs 2.0,” etc. Perhaps we’re now looking at a “4.0” version of all the C-suite-level and other senior titles in patient care organizations—a level of preparedness and skill we’ve never had as an overall healthcare system. But let’s begin by looking at the dynamics involved in this landscape, as we transition
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from “healthcare 1.0” to “healthcare 4.0” (see figure 1). As you can see, the traditional U.S. healthcare system, “Bricks & Mortar Healthcare,” is anchored in a fee-for- service-based payment system, involves fragmented silos between payers and pro- viders, has limited consumer awareness and price sensitivity, and its data systems are focused on “systems of record”—finan- cial, clinical, and operational. Right now, the U.S. healthcare system
is transitioning through a prolonged “2.0” phase, as payers and providers transition gradually from a discounted fee-for-service payment system into value- based contracting, including risk-based contracting, and new competencies and capabilities are being built—and data and information are beginning to fuel insights that can redesign how care is delivered, managed, and paid for. The U.S. health- care system is shifting towards a “3.0” iteration, encompassing digital health and connected care, with payment being based on value, a convergence of payer and pro- vider business models, tools of transpar- ency and interoperability are supporting engaged consumers, and collaboration is essential to creating new “systems of engagement.” In the next few years, we will see new “systems of innovation” expand the disruption of traditional care delivery organizations. Artificial intelli- gence will drive personalized medicine that will consider the whole person, and their social, mental, and physical needs.
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