New PwC Report Examines Digitization Challenges Underlying the Shift from Volume to Value

Dec. 11, 2019
A new report published by the PwC Health Research Institute looks at some of the challenges around digitization in provider and payer organizations, in the context of the shift to value in U.S. healthcare

Looking broadly at U.S. healthcare, 2020 is the year of digitalization. Digital is no longer an added bonus; it is now at the core of the health industry. The healthcare industry is full of data and in 2020, consumers will begin to enjoy the benefits of their own health data; digitization, and the issues around it, make up one of the major themes of the PwC Health Research Institute’s annual “Top Health Industry Issues” report, published on Dec. 11 by Pricewaterhouse Coopers.

In their introduction, the authors of the report write, “In 2020, US healthcare, and especially how itis delivered and how much we pay for it, will be top of mind. Politicians will float many bold plans for transforming the industry. Health system leaders will tout their investments in technology and transformation, as the US health industry works to catch up to the rest of the digital economy. The question for 2020 will be whether this digital transformation will benefit consumers—marking a new dawn for the US health industry and for the people whose lives depend on it. There are a lot of questions to be answered in 2020. How much will consumer experience change as receptionists no longer hand them clipboards of forms to fill out? Will physicians, now aided by data-driven insights, make better diagnoses and write better prescriptions? Will the stream of new drugs coming to market swell thanks to faster, more efficient clinical trials and regulatory reviews? Will insurers provide consumers with choices that are better for their wallets and good for their health?”

Meanwhile, the report’s authors state, “The health industry is betting that digital transformation will make the difference in delivery and cost. The health industry’s appetite for data has grown beyond medical histories. It is collecting genetic information, consumer purchasing habits and financial histories. It is digesting claims. It is consuming tweets and message board posts. It is counting calories, steps, fertility cycles and how often we toss and turn at night. The US health industry is binging on data. Digital health apps are multiplying, but what to do with the data they are generating? Many health organizations have yet to truly benefit from their digital investments. Thirty-eight percent of payer and provider executives surveyed by PwC in 2018 said their organizations have not incorporated digital into their corporate strategies. Many told PwC that they still do not see digital efforts paying off in a meaningful way.”

What’s more, the report’s authors state, “For this report, HRI surveyed 3,500 American consumers, 300 provider executives, 100 payer executives and 100 executives from pharmaceutical and life sciences companies. HRI also interviewed numerous thought leaders working at top organizations in the industry. Time and time again, digital opportunities and concerns emerged as critical aspects of the issues identified as most pressing for 2020. Healthcare executives told HRI they are asking tough questions about generating returns on their organizations’ significant investments in digital technology and data.

Progress is being made, they said, but will it be enough to justify these investments in time and money? How will the upcoming year's economic, political and regulatory uncertainty impact their organizations' efforts? Healthcare, once again, is a pressing concern for likely voters in the 2020 elections. While versions of “Medicare for All” proposals make headlines, the most likely outcome of the election—a divided government—may not produce seismic legislative change. Instead, the election will determine the fate of issues such as drug prices, surprise billing and CMS’ long push toward paying for value and not volume. This shift toward value-based payments is enabled by the now-ubiquitous electronic health records (EHR) systems and the industry’s growing ability to analyze the data within them, along with the ballooning amount of information collected outside the examination room. In 2020, the US health system will continue its long journey toward digitalization amid calls for bold changes from the presidential campaign trail and warnings of a recession, both in the US and abroad.”

And, the authors note, “Economic downturns historically hit the US health industry later than other parts of the economy, according to an analysis by HRI, giving healthcare organizations time to prepare. The industry’s work on weaving data into its operations, business models and approaches to consumers will help it ride out the year’s economic, and political, uncertainty. But the understanding of how these investments will lower costs and improve care delivery is still unclear.

Working with technology in a variety of ways is absolutely top of mind for both payer and provider executives, PwC researchers found. Asked, “Which workforce strategy is your top priority for 2020?”, the following were the top answers:

Ø Digital upskilling the existing workforce (33 percent of provider executives, 26 percent of payer executives)

Ø  Using technology for tasks previously performed by employees (23 percent of provider executives, 12 percent of payer executives)

Ø  Hiring employees with skills to support new capabilities, products, or services (14 percent of provider executives, 27 percent of payer executives)

Ø  Offering more flexible work arrangements (10 percent of provider executives, 9 percent of payer executives)

Ø  Digital upskilling by hiring of new employees (7 percent of provider executives, 11 percent of payer executives)

Numerous barriers to digitization success remain. Asked, “Which of the following are barriers to your organization’s digital strategies?” the following elements were cited:

Ø  Ensuring cybersecurity/privacy: 85 percent of provider executives, 94 percent of payer executives

Ø  Cost: 53 percent of both provider and payer executives

Ø  Having the right talent: 49 percent of provider executives, 45 percent of payer executives

Ø  Having the right partners: 31 percent of provider executives, 37 percent of payer executives

Ø  Ability to scale: 34 percent of provider executives, 31 percent of payer executives

Much remains unsettled about the current policy, payment, and operational landscape. The reports authors conclude their comprehensive report by stating that “2020 will be marked by some wild cards.

The presidential election, which features once again a debate over healthcare, will be a decision between two starkly different viewpoints on the role of the federal government in the industry. A recession likely would hit consumers’ wallets before healthcare organizations’ P&Ls, but a downturn still could shape the year’s priorities for organizations large and small. The percentage of uninsured Americans is creeping up once again. Many insured Americans say they are having trouble affording healthcare, despite coverage. The industry has the opportunity, with its vast investments in technology and data, to address these issues, creating a more sustainable, efficient and affordable system for all.”