The Minneapolis-based consulting firm C-Suite Resources, in concert with the Mountain View, Calif.-based Omnicell, recently released a report entitled “Next-Decade Predictions for the U.S. Healthcare Market: CEOs’ 2020 Vision for Healthcare.” To produce the report, C-Suite Resources consultants interviewed prominent CEOs from hospitals and health systems across the U.S. to learn their perspectives on the long-term direction of the healthcare industry over the next decade.
The panel of healthcare CEOs identified six core trends:
- Cost increases will drive much of the expected change in healthcare in the next decade.
- Awareness of the coverage and quality gap continues to fuel change, even after the passage of federal healthcare reform.
- Shortages of skilled providers, particularly of primary care physicians and nurses, will be another major factor driving realignment in healthcare.
- Demographic shifts including an aging population will also impact healthcare.
- Technology proliferation continues to drive change, but information technology investment is gaining relative to that in medical technology.
- Increased government intervention will continue to strongly impact the landscape, most fundamentally through federal healthcare reform and through the Health Information Technology for Economic and Clinical Health (HITECH) Act.
Don WegmillerThe second thing the CEOs call out is that, what’s more, the demographic shifts taking place right now in the U.S. are exacerbating the clinician shortage dramatically. We have an aging population, so therefore, per 100,000, we actually need more physicians than we needed a few years ago. And the physicians and nurses practicing now have a much more balanced view of lifestyle and work. There are more women physicians now, but overall, most physicians will be employed doctors, who are giving up entrepreneurial opportunities in exchange for a sane work-life balance, and working 40 hours a week instead of 60 to 70. When you combine all this, we have a dramatic shortfall. The public thinks the passage of the healthcare reform legislation has increased access to healthcare. Nothing could be further from the truth; there is now increased access to health insurance. But the shortages will be dramatic. And the AAMC [American Association of Medical Colleges] has been lobbying Congress for decades on clinician shortfalls. So that’s one thing called out very clearly and nicely.The other major issue I would highlight is in the structural changes section. And I wouldn’t call it surprising. But the thing that’s called out very nicely is, the whole theme is that we will now change the way physicians and hospitals are aligned. We will change it in three or four very different ways. Does this mean much to the general public? No. But it means a lot to the healthcare system. For example, value-based purchasing will force both hospitals and physicians to get paid on the basis of outcomes, not just volume. And the development of accountable care organizations and bundled payments will accelerate that trend even more, but it’s going to happen anyway. And now, the dramatic employment of physicians—MGMA now says more physicians are employed than in private practice. And that trend is only going to accelerate dramatically. And those two things will have a dramatic, and I think positive, effect, in terms of finally beginning to align incentives between hospitals and physicians. And that will change the way healthcare does business. I think in terms of role changes, CEOs talk about the fact that clinicians other than physicians will now occupy very significant team leadership roles—pharmacists, nurse practitioners, etc. Physicians will continue to be very involved as well, of course. The medical home model, for example, will take many forms. The key thing is that physicians will now practice in teams, rather than the model of, I’m the doctor, see my receptionist, I don’t need anybody else. That day is gone.Some of the other things to look at in terms of undergirding—every CEO said, without exception and with great emphasis—that we can’t do any of these things unless we continue to accelerate the growth of health information technology. This came through so loud and clear. They said, we can talk about all these alignments; but we can’t value-based purchase if we don’t know what the components of our care quality are.HCI: What’s possible now through technology this incredible.Wegmiller: It is, and the speed of transformation is only going to accelerate. And that’s what the CEOs were pointing out, that everyone realizes that we’ll be transformed by information technology, but frankly, it’s the alignment of hospitals and physicians as a development is what’s really going to push this. And physicians are leading the way here.HCI: Healthcare is being forced to become more transparent and accountable now, correct?Wegmiller: That’s right. The CEOs didn’t use the term ‘transparency,’ but it was implicit in their conversations with us. There were three terms used—consolidation, collaboration (with care teams being the norm; and the third that I think is implicit in transparency is their whole reference to consumerism. There’s no point to consumerism unless you provide them with data and information. And those three—consolidation, collaboration, and consumerism—are all wrapped up in transparency. And that’s the big change in medicine—it’s now a comparative measurement, not just a gross measurement. It used to be the doctor would say, I’ve done 480 urological procedures. Yes, but how good were they? And if you’ve done three, the results might be as good. So now the new guy in practice has as much accountability for their clinical practice as the more experienced guy. And so we start out measuring doctors from day one. In the past, of course, we only found out about outcomes through things like malpractice suits. But that era is gone.HCI: Obviously, these CEOs understand the transformative power of IT?Wegmiller: Oh, absolutely. And several CEOs said, we’re shifting our capital allocations; we’re not just spending more, we’re shifting the emphasis on spending from diagnostics and treatment to IT. That shows how important it is to document our outcomes. And it’s not just an increase in spending that I found impressive; it’s that they’re taking it away from other places. That’s what’s impressive. When you say, ah, we’re not buying that MRI, instead we’re taking that $1.2 million and putting it into IT—now you’re talking about commitment. And they said that loud and clear. And I was very pleased that that was the unanimous conclusion.HCI: You’ve been in the industry for many years. Clearly now, things are really changing, right?Wegmiller: Yes, and many things are changing for the better. We can lament certain things—we need more providers, and we can lament whether the payment will be adequate or not. But these changes will be good: physicians and hospitals being linked together; IT being a critical enabler; the fact that we’re measuring across the continuum of care; the fact that we’re using comparative benchmarks, not just benchmarks—all good. We’ve made changes in the industry before, but all we did was spend more money. When we have consumed way more than we should have as an industry of gross domestic product, you clearly have to change. Now, with that will come much, much tighter controls on spending. But everybody knows that. And some are doing a lot to recognize that, doing a lot more outsourcing, just a lot more discontinuing things they’ve always done.And we need to continue forward on that trajectory [towards improved cost-effectiveness, efficiency, and care quality]. Because the pressures will be such that we’ll need to continue to do that. So I’m very encouraged here. And we had a panel that represents a cross-section of the field, from older to younger and across different types of organizations. So I was pretty pleased with how they saw the world.And the group purchasing organizations have accumulated a lot of resources, and the smart ones, like [the Charlotte-based] Premier Alliance, are shifting resources into quality. And that’s very significant. And now, you’ve got a whole industry shifting, not just a few hospitals. That’s very exciting.
