A new report from the New York-based Deloitte consulting firm is underscoring the transformation of the U.S. healthcare industry that Deloitte’s experts see emerging in the coming years. On January 17, Deloitte published an article online that promoted the “Deloitte 2019 Health Care CEO Perspectives Study.”
As the Jan. 17 article noted, “Within the next 20 years, advances in medicine and technology, intensifying competition to engage the patient/consumer, the explosion and increasing interoperability of all health-related data, a changing regulatory landscape, and new entrants who bring both advanced technologies and an understanding of consumers will transform today’s health care landscape. As described in our view on the Future of Health, both industry incumbents and new entrants will shape how the industry will evolve and transform over the next several years.”
In the latest piece of research they’ve done, “The Deloitte Center for Health Solutions and the Monitor Deloitte Health Care Strategy practice interviewed 25 health system and six health plan CEOs to create the Deloitte 2019 Health Care CEO Perspectives Study that articulates how CEOs are thinking about their changing responsibilities and role in effecting change. Each of the interviewed CEOs leads a large health care organization, with most earning an annual revenue of US$1 billion or more.”
In their interviews, the Deloitte leaders noted that “Interviewed CEOs say that the most important drivers of change in the next ten years are the shift in care settings, the transition to value-based arrangements, and more proactive consumers. They say these drivers will have a major impact on their profit margins and traditional financial models.” Indeed, “CEOs are rethinking how they define success and create durable strategies amid the perception of a fluid and sometimes unpredictable market. Navigating myriad political, economic, competitive, social, and market pressures, CEOs perceive that the pace and magnitude of change are greater than ever and will continue to accelerate—a view consistent with the findings in each of Deloitte’s last two CEO Perspectives Studies in 2015 and 2017. The complexity and ever-increasing pace of change is complicating the CEO’s agenda and shifting the dynamic between CEOs, boards, and health care organizations’ management. CEOs are seeking greater diversity in perspective on executive teams and boards, and so, they are inviting constructive dissent to guard against organizational myopia and groupthink in the face of elusive threats and uncertainties.”
The Deloitte people added that “CEOs are rethinking how they define success and create durable strategies amid the perception of a fluid and sometimes unpredictable market. Navigating myriad political, economic, competitive, social, and market pressures, CEOs perceive that the pace and magnitude of change are greater than ever and will continue to accelerate—a view consistent with the findings in each of Deloitte’s last two CEO Perspectives Studies in 2015 and 2017. The complexity and ever-increasing pace of change is complicating the CEO’s agenda and shifting the dynamic between CEOs, boards, and health care organizations’ management. CEOs are seeking greater diversity in perspective on executive teams and boards, and so, they are inviting constructive dissent to guard against organizational myopia and groupthink in the face of elusive threats and uncertainties.
Among the drivers of healthcare system change seen by the CEOs surveyed by Deloitte:
Ø Shifting in care setting (20 percent say it will have a major impact, 6 percent say it will have a minor impact)
Ø Proactive consumers (19 percent say it will have a major impact, 7 percent say it will have a minor impact)
Ø Quality-based payment methods (19 percent say it will have a major impact, 7 percent say it will have a minor impact)
Ø Shift to Medicare and Medicaid (16 percent say it will have a major impact, 6 percent say it will have a minor impact)
Ø Workforce challenges (16 percent say they will have a major impact, 7 percent say they will have a minor impact)
Ø Competition from consumer technology (15 percent say it will have a major impact, 10 percent say it will have a minor impact)
With regard to the challenges facing healthcare CEOs in reducing the cost of care, the following are the systemic barriers they see in making major progress in that area:
Ø The continued prevalence of fundamentally fee-for-service reimbursement (even with performance incentives)
Ø The persistence of traditional medical culture and medical education where the majority of training occurs in the hospital and therefore perpetuates yesterday’s care model
Ø Labor contract terms and regulations that seek to preserve jobs, limit labor market flexibility, and constrain efficiency-generating mergers and acquisitions
Ø Certificate-of-need and associated regulatory requirements that impede flexibility in care settings and facility dispositions
The article also noted, with regard to the shift towards value-based care, coordinated carre, and consumer engagement, “Many CEOs in our prior studies predicted that they would be much further along in adopting value-based payment models than they are today. They admit now that progress was much slower because efforts are much harder than they had anticipated. CEOs discussed how they are instead shifting their investments to focus on consumer engagement technologies and care coordination models, including virtual health.”
