Evolving Healthcare Landscape Disruption Leaves

slide1. Evolving Healthcare Landscape Disruption Leaves footprints<br>
slide2. Phillip Ellis, MBA Senior Director, Network Director
Indiana Rural Health Association
President, National Cooperative of Health Networks
Advisory Board of Directors, Indianapolis Emergency Medical Services for Children
Education Liaison, IN-HFMA
Not a “Futurist”, maybe “Tomorrowist”<br>
slide3. AGENDA Happening Now in Healthcare
Helping our organizations thrive by recognizing the footprints of disruption  and connecting the dots
There is no crystal ball, so develop your VISION
An informed Vision, based on facts, not guesses.<br>
slide4. A lot of info Primary intent for today:
(spoiler alert… it’s not really about all of these fun facts that you are about to hear)
It’s about being informed
It’s about Connecting the Dots
Refine your vision of the next Perfect Storm(s) in healthcare<br>
slide5. Step 1: Know the differences Informed visions are based on identifying:
Fads, vs
Trends, vs
Game Changers, vs
Paradigm Shifts<br>
slide6. Preview of the vision elements Fads: Appear from nowhere, then fade away, good in theory, not so much in application.
Diet apps, CCM apps, Mental health apps, endless stream of “best ever” apps that fail to grasp the real world of healthcare… and flop
Trends: Better ideas, have merit, show continued acceptance.
Health Equity, Access to Care, recognition of SDoH<br>
slide7. Preview of the vision elements Game Changers: Widely proven and accepted as legit, healthcare community on board, new concept or alters/adds to an existing model.
Telehealth: evolved from simple “I have a booboo“ e-visit to Tele-ICU, Tele-Stroke, Tele-Cardio
Changed patient visit models, schedules, fees, reimbursement, staffing, volumes, RVUs, etc.
Paradigm Shifts: Radical change, unprecedented models, unassailable evidence of success with evidence of not going back to the way it was
Consumerism – Increases every day, some jump in, out, back, etc.
Social Demographics – The Boomers have left the house<br>
slide8. Buckle in….Happening now Issues that will Drive evolution in healthcare<br>
slide9. ICD-11 Launched Jan. 2022
ICD-10 is now 25 years old, 10 years in the US
ICD-11 Emphasis: Enable disease-specific epidemiological tracking of Morbidity and Mortality
Added benefits: Reimbursement, Quality & Safety, Health Services research
Example: Diabetes mellititus, type II, with Left diabetic cataract
ICD-10: E11.36
ICD-11: 9B10.21&XK8G/5A11<br>
slide10. Transition time in social demographics 2024: First year that Gen Z takes over Baby Boomers in the workplace
2030: First year that ALL boomers are >65….
NO LONGER paying into Medicare or Social Security “Largest base of taxable income in human history” (America Counts, 12/10/19)
But rather TAKING Medicare and Social Security
2024 Election: Won’t matter, neither party offering a valid solution<br>
slide11. Managing the staff Do we even know what an FTE is now?
Remember the 40hr / 2080hr model ?
Flex time
Gig work
Job share
Work from home
Traditional “staffing ratios” are not what they were
“How many FTEs work at your hospital?”<br>
slide12. What traditional work week? Corporate America’s 5-day club is not “working” (onsite)
JP Morgan/Chase, Boeing, UPS, others trying to reel them back in
But….82% of Fortune 500 companies offer remote working
Bill Gates sees a 3-Day work week thanks to AI (Business Insider)
Cleveland Clinic: Bare Minimum Mondays (Cleveland Clinic)
Didn’t we already have Casual Friday?
Meeting-Free Friday (Becker's 7/18/24)<br>
slide13. Evolving Leadership issues 100,000 critical healthcare workers shortage by 2030 (Mercer)
Anesthesiologists; 60% > age 55 and 2,800 left the field 2021-2022 (HFMA 5/24)
More outbound than inbound
Nurse Externships: Vanderbilt Univ. Med Center, Northwell Health (NY), ECU (Greenville, NC) 1st graduating class Nurse Externs.
Disruptive Footprints; What do they tell us?<br>
slide14. Evolving benefit options to be considered Walmart benefits expansion – Doula services reimbursed up to $1,000.
5.6 million women live is US counties with no access to maternity care (HR Dive)
Doula services reduce costly cesarean sections rates (Fierce Health Report)
60% of HR Professionals plan to increase family health benefits due to growing demand of employees (Maven’s 2023 State of Fertility & Family Benefits Report)
68% Surveyed prioritize flexibility over compensation (Korn Ferry/Becker's 7/18/24)
Salary & Wage disclosure laws, 1/3 of US states now require.<br>
slide15. Executive Staffing: More turbulence 66 CEO changes in first 6 months of 2024 (down from 2023)
2023: 51% Increase over 2022 (Challenger, Gray, & Christmas)
GIG Work
Intermountain Health Using Workday to establish Gig work for employees 
Yet Healthcare job cuts; 3rd highest among top 30 industries (Christmas…) 2023 Up 91% over 2022
A hospital CEO hired at 24 years of age…. & NO healthcare experience<br>
slide16. Hospital job reductions/ jobs cut White Rock (TX) 35%
Kaiser (continuous – hundreds in IT)
University Health (Cleveland) 300 (10% of total workforce)
Catholic Medical (NH) 142
Marshfield Clinic (WI) 3% workforce Oregon Health 500
Memorial Health (MN) 103
UMPC (PA) >1,000
North Shore (FL) 152
Tufts 174
Banner Health 45 etc., etc., etc.
(Becker’s Hospital Review 9/13/24)<br>
slide17. Evolving Models in care delivery Physician Owned hospitals – more complex cases, 8-15% less costs, in 20 most expensive DRGs (Physician’s Advocacy Institute)
Return of Micro hospitals, ChristianaCare in Delaware, 10 bed IP w/ ED
90,000 Physicians now employed by Optum (Becker’s Hospital Review)
BCBS acquired 55 FastMed Urgent Care facilities (HealthcareDive)
M&A: Increased 27% 2022 -2023
Behavioral Health, O/P Surgery, Post-acute Joint most common JVs
HCA acquiring Catholic Medical (NH) (Becker’s Hospital Review 7/5/24)<br>
slide18. Unique developments in models of care delivery “Social Prescribing” blowing up; Now 30 programs & growing (New York Times 4/17/24)
Patient Portals: Have to achieve “Techquity”; ease of use for all demographics
How do you test your “Patient Portal”
Who tests it for you?
All about Consumerism
Meet the patient/consumer needs WHERE they are
Meet the patient/consumer needs with AGE APPORORIATE services<br>
slide19. The Cuban missile crisis Mark Cuban fired a missile at Big Pharma
CVS, Cigna, UHC, Elevance (Anthem) all following suit
Partnering with providers: Intermountain Health (Becker's’ Payer Report)
Express Scripts (CIGNA) now following the same “cost plus” model
Amazon RxPass now eligible for Medicare beneficiaries<br>
slide20. Evolving Models Private Equity: acquires 220 hospitals in 36 states
Followed by service cuts, layoffs, and poor quality ratings (JAMA)
PE Growing: Increased x6 2012 -2021, continued through 2024
Yet, a new rural health system opens! Aspire Rural Health System (Michigan)
Hills & Dales Hospital, UnitedHealthcare Partners, Community Hospital, Marlette Regional Hospital, Heartlands Marlette Senior Living
Closings for some yet Opportunity for others <br>
slide21. Private equity: You bet your life (literally) Research reflects poor outcomes in PE acquired hospitals (2009 – 2019)
662,095 hospitalizations at 51 PE acquired hospitals
4,160,720 claims at 259 matched control hospitals
100% of cases used Medicare Claims Part A data
PE hospitals: 25.4% increase in hospital-acquired conditions
PE hospitals: 27.3% increase in patient falls
PE hospitals: 37.7% increase in central line associated infections
(Becker’s ASC Review (JAMA) Dec. 27, 2023)<br>
slide22. What will be different by 2026? Becker’s Healthcare survey of 65 Healthcare Executives
Most frequently anticipated:
22 – Radical new models of Care Delivery evolving
20 – Growth in Technology (AI, Telehealth)
15 – Consumerism
Major footprints: These are Game Changers and Paradigm shifters<br>
slide23. hospital executives forecast…(beckers) The patient will be the ultimate consumer
Meet consumers where they are,… incorporate “health” into people’s everyday lives”
Continued push from IP to OP, virtual, mobile care
“Omnichannel care” catering to patient-consumers
Partnering with Amazon and Costco.. (meaning… yes, Consumers)
Trying to survive the loss of 4.5 MILLION nurses by 2027
“Redefine operational models to hyper-focus on the patient experience”
Hospital at Home<br>
slide24. Some things evolve in circular form Stone Age through 1900s: born at home
1935: 50% at home (ScienceDirect)
1980s: Birthing “suites”
1990s: Natural birthing, pools, etc.
2010: Turing back to midwives
Today, back to home deliveries & payers allowing Doulas 
Circular footprints! Always consider the direction disruption pushes us<br>
slide25. Consolidation & Market share Hospitals not the only one
Payer Consolidation:
Top 3 Insurers have 82.2% of market share in each state
Largest health systems have 43.1% of market share in each state
(American Colleges Research and Action Institute.  May 1, 2024)<br>
slide26. Closings & Terminating services 8 More closures in 2023
700 at Risk of Closing 300 at Immediate Risk
Center for Healthcare Quality and Payment Reform
166 Rural Hospitals closed since 2010
25 closures/conversions to REH in 2023 (AHA)
>200 rural hospitals have terminated L & D services in past 10 years
70% of patients in rural areas drive > than 30 minutes to a hospital offering L & D
Healthcare bankruptcies hit 5-year high
12 hospitals filed for bankruptcy in 2023 (11 in three prior years combined! )<br>
slide27. Why? …..Well duuuhhh 75/75 Conundrum:
75% revenue fixed or declining (Mcare/Mcaid/PP)
75% expenses skyrocketing (labor, benefits, drugs, supplies) (Andrew Donahue; HFMA)
Admin costs now at 31% of total healthcare spending (82% is Revenue Cycle)
These two are HUGE FOOTPRINTS of DiSruPtiOn<br>
slide28. Ratings & expectations AON Risk: Top 10 Risks for 2024: #6 Damage to…..
Brand Reputation !<br>
slide29. Reputation Top 3 Factors in Choosing a Provider:
#3: Online Ratings & Reviews
65% of Patients selecting a provider based on reviews: increased 80% from 2021
45% Consumers start their search with Google, etc.
86% Read online reviews, up 72% from 2021
60% Read at least 5 reviews
73% Trust online reviews
Healthcare Reputation Trends to watch in 2023<br>
slide30. Customers who have a bad experience are twice to three times more likely to write an angry review than customers who had a great experience are to post a happy review.
88 percent of people trust online reviews as much as they trust their best friends’ recommendations.
80 percent of people will to go elsewhere if they read bad reviews of a business online.
It takes 12 positive reviews to cancel out the nasty side effects of just one negative review. (Reputation Builder)
These points are Disruptors in healthcare and leave huge footprints<br>
slide31. Employment trends Cost of Health Insurance: 9% increase 2024-2023
“Magic Trifecta”: Medical, Maternity, & Mental Health most popular (Perceptyx 3/11/24)
Growth of labor unions in healthcare
75,000 strike at Kaiser Permanente
3,000 Providence Health (Portland) (Becker's Hospital Review 8/13/24)
1,100 Kadlec Regional Med Center (WA)
Work Stoppages of >1,000: 1992-2021; once every 4.1 Months
2022-2023; one every 1.4 months. (US Bureau of Labor Statistics) <br>
slide32. Evolving societal issues Gen Z overtakes Boomers in 2024, Millennials & Gen X rule
Gen Z drives game changers: Priorities: Community, being heard, transparency, diversity, inclusion, responsive leadership
Return to Office, sounds logical but not working, need a hybrid
79% increased productivity, 75% less burnout (Guardian 6/16/24)
Decreasing traditional benefits: 401k, dental, tuition, commuter assistance, gym memberships, mobile phone discounts, vision, all declining
Areas of growing benefits: Fertility, adoption, parental leave, mental health… and yes….. pet insurance. (Glassdoor)<br>
slide33. Culture shifts But much of Gen Z is struggling! Highest debt levels, more delinquencies (WST 5/7/24)
“DEI Programs” fading in popularity (“Wellbeing & Inclusion”)
Still a high priority with Millennials, Gen Z…. Don’t neglect, its still very real
Political dynamite, FL, TX laws to limit programs
Environmental, Social, Governance Principals: Ditto above…
Just as much about pleasing investors as Millennials or Gen Z (Nick Hut, HFMA)
We MUST consider the impact of evolving priorities of evolving generations<br>
slide34. Internal issues for providers Huge shift toward outsourcing functions
Revenue Cycle (82% of admin costs is Rev Cycle)
Ascension, Novant Health, Tenet Healthcare, ProHealth Care, Adena Health, Bay Care Health, Regional health System (Norman), Owensboro Health, Northern Light…
Return to Office…. That pandemic thing is not totally behind us…
Nearly 50% respondents to survey would resign before returning (Integrated Benefits Institute) <br>
slide35. And External pressures Bipaartisan group (Warren, Grassley, Cassidy, Warnlock) demanding information from IRS on hospitals providing community benefit
Threatening Revocation of Tax-exempt status…. This one is serious folks
ID hospitals “at Risk” for non-compliance
ID hospitals with rejected 990 by IRS for failing to report community benefits
Hospitals received $28 Billion in tax breaks in 2020… what did they do to earn that?<br>
slide36. External pressures 3/4 hospitals spend less in charity care than they gain from tax-exempt status. (Chief Healthcare Executive) 
Report: Public, not Non-profit hospitals use 340B funds to expand services (JAMA Health Forum May 9, 2024)
Legislators use these facts to Bludgeon hospital lobbyists who plead for support.<br>
slide37. Hospital at home: Why so much in need 68% of all hospital-based healthcare costs are brick-and-mortar overhead
Avg. cost of a hospital admit in the US : $11,700, the highest of all utilizations
Cost of Hospital at Home care: 52% less than hospitalization
1 in 31 hospital inpatients has at least one healthcare-associated infection
Consider the impact of these Footprints on Budget discussions <br>
slide38. Medicare advantage (or dis) Challenges for MA Plans
Higher scrutiny from Feds, reduced base pay,
Growing number of hospitals terminating Medicare Advantage contracts (14 systems and counting)
Mayo Clinic in AZ – no longer taking Medicare Advantage
Christiana Care (Delaware) 4 hospitals
Med Health (Albany, NY (Daily Gazette 6/2024)
15 other hospitals systems since Sept. (Becker's Payer)
But still growing, estimated by 2030: 62% (AHA)<br>
slide39. Medicare advantage (or dis) The bad news (for us): 95% satisfaction rating from patients and saves Feds $
But… premiums increasing & deductibles increased in 2024
MA bonuses paid to MA plans decreasing for first time since 2015 (KFF)
AND.. Plans pulling out…
Humana dropped 13 MA Markets
Centene pulls out of 6 states MA (Fierce Health 9/4/24)
22 States with decreasing number of MA plans (Becker’s Payer Issues 10/1/24)
Regardless, Medicare solvency would be extended by 17 years if all MA (AHIP/Avalere study)  
Medicare solvency ends in 2036 (Medicare Trustees Report)<br>
slide40. Medicare (dis)advantage CMS Star Ratings declined for 3rd consecutive year down to 3.92 for 2025 ratings
Only 7 plans received a 5-Star rating, down from 38 for 2024
UHC, Humana, CVS all with excessive denials of PA requests
Senate Permanent Subcommittee on Investigations: MA Plans use Prior Auth to boost profits. Becker’s Revenue Cycle 10/21/2024)<br>
slide41. Those poor payers UnitedHealth Group: $22.4 Billion NET INCOME in 2023
Optum: $15.9 NET INCOME in 2023
Elevance (aka Anthem) $6.6 Billion net income 2023 (and laying off 10k employees)<br>
slide42. More payer disruption Payers cutting jobs
Landmark Health (Otpum) nationwide layoffs (FierceHealth 7/18/24)
Molina Health, Optum, Highmark, Elevance, Humana, Kaiser, others cutting jobs (BeckersPayerReview 5/14/2024)
Payers cutting services: Walgreens, SOLD 60 Village MD Clinics, Walmart closing 51 Clinics and Telehealth, – be profitable or be gone… (HealthcareDive) (Becker's Hospital Review)
CVS Lays off 2600 employees (Becker’s Payer Issues 10/8/2024)
Anthem acquires CareBridge (home and community-based care provider for patients with chronic and complex needs.) Becker's 10/21/2024<br>
slide43. Artificial intelligence  Sorry, it had to come up
42% of all Health organizations will increase AI spending over next 3 years, mostly in revenue cycle. (Healthcare IT Leaders, The state of AI adoption in healthcare 2023)
AI will offset workforce shortages, improve productivity
AI weaponized by Payers
Initial denial rates increased from 10.15% to 14.07% 2020-23 (Kodiak Solutions, 12/23)
AR > days increased from 27% 2021 to 36% 2023 (AHA 11/2022)
Improved patient communications? Tried “chatting” with a bot recently?
Game changer and will become a Paradigm shift… watch the footprints!<br>
slide44. And government payer changes House passed Lower Costs, More Transparency Act
Red Alert Code 3: This includes Site Neutral payments for drug administration!
More Bundled Billing coming in 2025
House subcommittee already looking at Site-Neutral on ambulatory services in 2026 (Nick Hut, HFMA 2/15/2024)
How long before this spreads further? Note the Footprints of Disruption of ALL payers<br>
slide45. Public perception disruption Brand loyalty is fading
“The days of putting up your quality scores or your US News & World Report Ranking on a billboard saying “We have the greatest services” are over, that is not enough anymore” (Jon Barlow, VP Vizient)
Increasingly sophisticated consumers demand focused accessibility, affordability, and experience
And demanding a better Patient/Consumer Experience<br>
slide46. Did I mention consumerism? Amazon discounting One Medical members (Prime only) to $9.00 per month;
Establishing referral partners
Cleveland Clinic (10/21/2024) ..hybrid model.. Brick & Mortar w/ Telehealth ???
Hackensack - Meridian Health
Houston Methodist
UC Davis Health partnering with Best Buy for CCM program (Becker’s Hospital Review 7/1/24)
Walgreens partnering with hospitals, Hartford Healthcare (23,000 patients per day in system)  
Exploding landscape of Healthcare apps
“consumerism is propelling a paradigm shift in healthcare service provisions. Consumer engagement is the essential ingredient reshaping a complex healthcare ecosystem.” (David Johnson 4insight Health)<br>
slide47. But Are patients using retail titans? Claims from Retail clinics volume increased 200% from 2017 to 2022
Claims from PCP offices volume decreased 13% in the same period (AHA)
WHY?
43% working age adults inadequately insured
11% had a gap in coverage
9% NO insurance
4 in 10 adults skipped medical care due to costs
1 in 6 Insured adults could not pay their medical bills (AHA)<br>
slide48. I know, I know.. But…… Yes, Walmart dropped healthcare
Yes, Walgreens & CVS backing off healthcare
Amazon NOT getting out.
And who is the winner from this shift?
What is the impact on traditional healthcare providers?
Consumerism is an organizational culture, not the presence of “retailers”<br>
slide49. Back to walmart Walmart’s stated reasons for leaving healthcare
A challenging reimbursement model
Escalating operating costs
Lack of profitability
Staffing challenges<br>
slide50. The end of titan brands in healthcare? Don’t bet on it
“There is a lot of money in healthcare, so there will be other brands trying this out. I don’t think we’ve seen the last of consumer brands coming in.
For low acuity care, patients have a lot more choice… traditional healthcare systems need to change, innovate and embrace a more consumer-driven industry to reverse these trends
The concept of consumerism in healt5hare is here to stay. Healthcare systems must find a way to better meet patient needs or adjust heir business models.”
Jared Johnson, MDRG 07/24<br>
slide51. The times, they are a changing Titan brands invaded healthcare, some with success…
Amazon
Mark Cuban
Others, not so much
Regardless, they altered the EXPECTATION of the Patient/Consumer Experience… Not it is on us….<br>
slide52. There’s your update on trends Trust me there is much more….But ignore those ….for now
For now….
Get Comfortable with what makes you UNCOMFORTABLE!
Start connecting the dots, follow the footprints of disruption…
And Reimagine!<br>
slide53. High Risk job we have here We need to identify the Trends, Game Changers and Paradigm Shifts 
We need to understand the Disruption
30% of all rural hospitals in the U.S. — are at risk of closing in the near future, according to the Center for Healthcare Quality and Payment Reform. 
We need to DEFINE our Vision
And Reimagine how we can deliver healthcare services…
Well, some of them<br>
slide54. How? Where do we start?
In a word… Environmental Scanning
"Environmental scanning helps to focus the organization’s strategic and tactical plans on those external forces that may threaten its stability and turn those potential problems to its advantage". (Kendra Albright, 2004)<br>
slide55. Creating our own vision What external forces clarify our VISION?
Legal
Social Demographic
Political/Legislative
Technology
Economics/Financial/Consumer Focus
Globalization<br>
slide56. The best info you can find And after considering those elements…..
Listen to your community
Community Health Needs Assessments..<br>
slide57. How do we improve our environment scanning? BE CURIOUS about EVERYTHING<br>
slide58. Be Curious Curiosity sparks Questions
Questions lead to Information
Information leads to CLARITY
CLARITY enables VISION<br>
slide59. example: The most telling demographic warning for us to consider 100 years ago, the proportion of Americans aged 65 years and older was about 1 in 20. This year, the proportion of Americans aged 65 years and older will have risen to above 1 in 6.

“2024 will mark the first year in which the long tentacles of demographic change will come into plain view: from shifting consumption and utilization patterns among American generations, to payer-mix erosion as seniors retire from service, to a shortage of post-acute and long-term care solutions.”  
Andrew Donahue, FHFMA, CPA, is director of healthcare finance policy, HFMA’s Washington, D.C.<br>
slide60. Facts, not just information Working Boomers were PAYING INTO Medicare and Social Security
Retired Boomers NO LONGER PAY big $$ into Medicare and Social Security
Retired Boomers USE MEDICARE
Retired Boomers DRAW SOCIAL SECURITY<br>
slide61. Application of environmental scanning: Demographics Legal: Laws will have to catch up to technology, telehealth, Provider requirements, places of service, etc.
Social Demographic: Boomers retired, but not going away.
Your fault, you made us be healthy, now you are stuck with us
Political/Legislative: Policies will have to catch up, access, services, audio, dental, Rx, transportation. Retirees vote & have time<br>
slide62. Application of environmental scanning Technology: Senior friendly tools, technology at home, devices
Economics/Financial: Do you have 3 hours for me?
Globalization: Seniors vacating the workplace open doors to more diversified workforce with their own cultures<br>
slide63. Understanding the footprints of disruption Study the impact of the new needs of retired Boomers
Study the impact of things no longer needed by Boomers
Study the impact of Gen X, Y, Millennials, and Gen Z
They will all need healthcare
But where? When? By what model of delivery? By whom?
Who will pay for it? How?
THIS is Environmental Scanning<br>
slide64. Next steps Now you must commit to identifying the relevant issues
The Fads
The Trends
The Game Changers
The Paradigm Changers
Then.. Connect the dots
Finally, identify the potential for the next “perfect storm” of tomorrow and beyond<br>
slide65. Closing thoughts Ernest McSorley<br>
slide66. The Edmund Fitzgerald<br>
slide67. Greatest quote of all time “The greatest danger for most of us is not in setting our aim too high and falling short… but in setting our aim too low and achieving our mark.” – Michelangelo.<br>
slide68. Questions, boos, hisses and Suggested reading Environmental Scanning: Radar For Success
Dr. Kendra Albright, PH.D, Kent State University
Reputation – Report Healthcare Industry 2023
Reimagine! Tom Peters
https://reputation.com/healthcare-report/<br>
slide69. Questions and Suggested reading Environmental Scanning: Radar For Success
Dr. Kendra Albright, PH.D, Kent State University
Reputation – Report Healthcare Industry 2023
https://reputation.com/healthcare-report/<br>