In 2020, COVID-19 hit the nation’s healthcare systems like a 500-year flood. The effects of the coronavirus have deepened financial losses for providers across the United States and pushed human capital to the breaking point.
“For the first time since the Great Depression, crippling financial losses threaten the viability of substantial numbers of hospitals and office practices, especially those that were already financially vulnerable, including rural and safety-net providers and primary care practices,” said The New England Journal of Medicine. This, apart from what many are calling a fast-moving catastrophe for healthcare workers’ mental health needs.
As 2021 restarts the clock, the good news is that millions of people will be protected from the disease through vaccination, which will ease the strain on the country’s healthcare systems. As we noted in a previous article, most healthcare organizations were already improving systemic healthcare problems even before the pandemic.
Much of that progress has focused on how healthcare systems can leverage technology to improve the provider and patient experience; optimize telehealth, virtual care and remote care; and improve operational efficiencies in systems that span multiple hospitals and clinics.
Through our work with multiple healthcare systems, we’ve identified seven 2021 healthcare trends partially fueled by powerful technology and innovation that deliver indisputable value.
From artificial intelligence (AI) that improves call center efficiency to the rise of direct to consumer healthcare, explore how forward-thinking healthcare systems can anticipate these trends, and create technology strategies to improve patient care and ancillary operations.
- Artificial intelligence ascends
- Telehealth growth continues but with new rules
- The rise of home healthcare and direct primary care
- Retail healthcare goes mainstream
- Providers, payers and outsiders forge new partnerships
- Healthcare systems accelerate cloud adoption
- Amazon pharmacy becomes a competitive force
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Trend 1: artificial intelligence ascends
Until now, AI had been held at arm’s length in healthcare for various reasons. But with COVID having exposed significant operational gaps and manual bottlenecks, AI’s time for broader adoption may have arrived.
Throughout the ongoing COVID crisis, most healthcare systems experienced appointment reductions of 60%, which sparked deep employment declines in the form of layoffs and furloughs. Now, with a reduced workforce and continued pressure to produce value at scale, healthcare systems are looking more seriously at ways for AI and machine learning (ML) to create efficiencies.
In the recent past, many healthcare CEOs had recoiled at the seemingly high capital startup investment needed to add AI/ML to their core tech stack. But with more cost-accessible subscription options available nowadays, technology leaders can instantly shift capital expenses into operating expenses, which improves financial planning.
To prepare for AI/ML, leaders should work with cross-functional teams to carefully select where these tools can return maximum ROI based on actual costs vs. real value for different service lines.
Here are a few of the top AI and ML use cases in healthcare:
- AI can help administrators predict changes at the system level. For instance, managing bed capacity to balance patient volumes and to anticipate staffing needs on units like ICUs and emergent care across multiple locations. One Nerdery client noted they don’t have the technology to measure the revenue implications of shifting available resources from one hospital to another. But AI/ML helps leaders react more intelligently to system-level changes.
- Organizations are installing AI systems to automate processes previously done by people in call centers or service centers—paying bills, scheduling appointments and other tasks. These tools could include chatbots or other conversational interfaces, which reduce patient on-hold times.
- This year, we will also see the first instances of completely AI-driven diagnoses and treatments that may be just as good or better than human physicians. But in the near term, AI will assist human-run systems and processes.
Trend 2: telehealth growth continues but with new rules
Telehealth demand exploded through much of 2020 due to COVID-19. With the virus transmission risks associated with in-person care and the extreme need for online triage (often, for COVID-19 testing), digital channels were the only ways to access and manage care.
Despite this sustained boom, telehealth visits remained a fraction of overall visits by year-end, even in the most advanced healthcare systems. In many cases, online visits had already begun to decline compared to the 2020 peak.
The underlying reasons for this relatively low percentage of visit mix, as well as the latent downward trend, are threefold:
- Most patients still have a hard time accessing telehealth platforms and believing that digitally delivered healthcare visits are as good as (and sometimes better than) in-person care.
- Most providers haven’t refined the experience their platforms deliver, reinforcing consumer perceptions that the best care happens face-to-face.
- A third behavioral normalization possibility is that people have settled into a pandemic ‘rhythm’ where care-seeking urgency is not as intense as it was in March through July 2020.
Regardless of these explanations, in 2021, telehealth maturity will ultimately become a function of whether healthcare systems invest in how their platforms consider patient experience — something which digital startups excel in and brick-and-mortar providers must prioritize.
For the latter, we’ll see some hospital and clinic systems artfully stitch together myriad point solutions focused on well-integrated handoffs between technologies. What’s more, others will invest in deeply building out proprietary system-wide platforms. For systems that had already started before the pandemic, like Mayo Clinic, the strategy is to double-down and stay the course. For those more recently engaged in digital experience innovation, the opportunity for massive improvement is high.
Most digital primary care startups have done well figuring out the limited symptom, basic primary care visit. Larger health systems can leapfrog these digital point solutions to quickly and methodically design and implement virtualized care pathways that involve more complex care scenarios. M Health Fairview in Minnesota is a standout example of this. It rapidly enabled a number of more advanced virtual care options and quietly enabled them throughout the pandemic’s course.
Providers that succeed in bringing more advanced telehealth use cases to market will do so as a team effort. We’ve seen proactive leaders form mixed teams consisting of operational, clinical, technical and experiential leaders to effectively consider all facets of care pathways that are candidates for rapid virtualization.
But not every kind of care can be virtualized, and that’s where outfitting the home environment to support care delivery comes into play in the next trend.
Trend 3: the rise of home healthcare and direct primary care
COVID is just one factor that’s been motivating entrepreneurs to launch disruptive healthcare delivery businesses in 2020. The pursuit of value and digital ease has been pushing innovation for a half-decade.
Well before the pandemic, Nice Healthcare, a Minneapolis-based digital healthcare startup, was already leveraging an app to enable their users to summon clinicians in Priuses to their homes to provide a shockingly wide array of basic healthcare services. Think of this as a modern-day adaptation of the “house call.”
Uniquely, the business model is structured as an employee benefit. This means that with thousands of consumers who are employees of their B2B customers, Nice has laid the groundwork to entirely supplant traditional primary care access needs typically served through brick-and-mortar physicians. This model provides workers with alternative primary care that avoids expensive healthcare systems; employers can reduce overall employee healthcare costs by 20% and employees get unheard of concierge service.
With the home becoming a major nexus of opportunity in a post COVID economy, healthcare systems are also seriously rethinking what can be delivered at home. Here, again, M Health Fairview became the first system in the nation to deliver at-home chemotherapy.
But even as virtual and at-home options meet consumers comfortably where they are, healthcare retailization looms in commercial, non-clinical consumer spaces, creating new alternatives to comprehensive primary care.
Trend 4: retail healthcare goes mainstream
In the recent past, retail pharmacies like CVS and Walgreens have been steadily eroding (mostly) urgent care market share from regional healthcare systems by adding in-store clinics. These trends spawned standalone retail walk-in clinics like MedExpress and Urgency Room, which, in turn, saw CVS and Walgreens recast their urgent care option as a more holistic primary care offering. Housed within Target locations, in CVS’ case, means plenty of opportunities to test consumer inclinations, but moving into being viewed as viable, routine primary care is a tough sell.
Fast forward to 2020, however, and Walmart emerged like a bullet train launching retail adjacent/embedded healthcare supercenters that immediately hit capacity. What began as limited locations for primary care, quickly increased in number, volume usage and in complexity to add dental and vision to round out existing pharmacies, as well. Suddenly, Walmart began to offer a wrap-around health plan in conjunction with Clover Health, and if that wasn’t enough, they announced two new health supercenters in Chicago.
The implications are seismic for existing healthcare systems. Prominently, the need to bridge the gap between retail, primary care and complex higher-order medical services like oncology and orthopedics has never been higher.
In response to retail healthcare trends, we’ll start to see two types of movement in 2021:
- Legacy hospitals and clinics will try their own hand at “retailization.” Many systems have been forced to deprecate multiple clinics throughout service regions. Several will re-form these clinics as specialized health hubs that mirror retail trends.
- Simultaneously, we’ll also begin to see partnerships formed between retail, primary care and higher-order traditional clinics and hospital systems. A patient may leverage Walmart or CVS or Doctor On Demand for the majority of their needs, but the second they need a major surgery or develop cancer, the question of retail-to-legacy care continuity will become an instantaneous gap. That’s where these partnerships will seek to ensure data continuity and a constant flow of patients going from retail primary care into higher-order traditional care settings.
Amid this backdrop, there’s opportunity for the dominant EMR platforms to provide plug-and-play solutions that create care continuity not only within the fragmented retail+legacy primary care space, but in bridging toward higher-order care.
To prepare for this reality, healthcare systems should consider creating provisional data sharing agreements to allow seamless communication between retail and traditional clinics. These data flows may be as simple as two parties agreeing to turn on the same switch between their systems, or as complex as developing custom APIs using HL7 FHIR protocols.
For companies that already know how they want to leverage data between systems, Nerdery can help strategize and build APIs; for those unsure how to maximize their existing system functionalities, Nerdery can audit whether these technologies are prepared for planned digital transformation.
Trend 5: providers, payers and outsiders forge new partnerships
Retailization aside, 2021 will see the accelerated pursuit of value through partnerships of both traditional and non-traditional players. These will take on three primary flavors, but will ultimately be a mixture of multiple:
- Provider-provider partnerships — and outright acquisitions — that seek to gain more regional scale and diversified services while, ideally, controlling costs.
- The continued proliferation of provider-payer partnerships that seek to create closed systems to increase the scope of member/patient data visibility and health maintenance. These are already common, but more of these are involving startups and born-digital providers that leverage consumer digital technologies.
- More non-traditional entrants and partnerships (think Best Buy, Lyft, Apple, Google, etc.) looking to fundamentally attack population health questions around social determinants and prevention at scale — with a particular rising interest in leveraging digital to combat loneliness and isolation.
Trend 6: healthcare systems accelerate cloud adoption
Perhaps most predictable, but no less of a paradigm shift, healthcare will accelerate on cloud adoption aggressively. Many healthcare CIOs view the cloud as a game-changer, especially when protecting patient data. Beyond that, however, CIOs embrace the cloud for its infinite scalability and flexibility, as well as its natural role in housing AI/ML solutions.
HeathTech says the implementation of cloud storage for electronic health records has helped streamline collaborative patient care, making it easier for clinicians to access patient information. As healthcare systems continue the trend of collaborating with providers at retail locations and other out-of-network specialists, it’s essential to have accessible data that’s not locked up in a private data center.
We’ve also found that an agile methodology that supports experimentation and rapid learning, coupled with a company culture that does not punish failure, will accelerate the execution of your cloud strategy.
Trend 7: Amazon Pharmacy becomes a competitive force
While news of Amazon, Berkshire Hathaway, and JP Morgan’s joint venture, Haven, shuttering has dominated the news, the quiet and decisive launch of Amazon Pharmacy will prove to be the long-term reason that retail pharmacy will be put on its heels.
Amazon is exceedingly good at simplifying complex processes and delivering goods quickly. Most agree this is the antithesis of how we get our medication today: we’re in a drive-through where we’re asked the same questions (with the same answers) that we’ve been asked scores of times. If we’re lucky, we know what it will cost. Sometimes, however, the pharmacy must make two or three phone calls and search multiple databases to solve the copay puzzle.
Amazon will change all of that.
They’ll remove the guesswork, revitalize the process, and have you tracking your Rx just like you follow your package. No more, “could you please come back in 20 minutes?” Efficient processes like this will undercut Walgreens’ and CVS’s core pharmacy business and force them to more aggressively repackage their clinic and retail business to add greater consumer value. Drone pilots by retail pharmacies this past year may need to expand — or be tabled — depending on how fast Amazon moves.
Soon, Amazon’s much-anticipated pharmacy business will be competing against the nation’s entrenched leaders. We also predict that with technology, Amazon could help solve the industry’s challenge with medication adherence. Expect Amazon to experiment with very smooth refilling protocols that will trigger specific dates or even involve an NFC sensor that detects total numbers of pills. The sensor could communicate with your phone or prompt a question from your Alexa device if you want to refill your prescription. All of this will produce petabytes of data that insurance companies will clamor to analyze.
Adopt emerging technologies; prepare to pivot
Irrespective of the trend, the central message for the year ahead is a clear one: digital investments can no longer be shelved for the next budgetary cycle. Whether it’s the core technology stack or consumer digital, the current moment will be unforgiving to digital laggards.
As 2021 unfolds, we’ll undoubtedly experience surprises that didn’t appear on any organization’s trends list. And, of course, there’s no guarantee the trends we’ve cited here will evolve as predicted. For healthcare system CEOs and technology leaders, however, the key is to be aware of how you can adopt emerging technologies to know your consumer, advance your business goals and improve healthcare value delivery.
At the same time, it’s essential to be aware of how disruptors in the industry could affect your organization’s strategic plans, and be ready to pivot quickly. In this digital age of uncertainty and fast-moving businesses, the best corporate strategies are digitally-centric, inherently flexible and adaptive — not locked into three- and five-year refresh cycles.
Effective partnership in this landscape has moved from consulting to become more of a team sport — one that requires trust, mutual skin-in-the-game, experience, and shared wins. Looking for a strategic business and technology partner? Nerdery works with healthcare leaders to link business value creation with patient needs.
