Chinese investor Tianqiao Chen and his group of companies have a 7.1 percent stake in Franklin, Tenn.-based Community Health Systems after recently selling more than 1.7 million shares of the company, according to a Securities and Exchange Commission filing.
Mr. Chen and his Shanda Group company affiliates sold 1.73 million shares of CHS from March 4-5 for between $8.70 and $8.73 per share, bringing in a total of $15.1 million. The move comes after he sold more than 16 million shares of CHS between Nov. 10 and Jan. 15.
Mr. Chen, a pioneer in China’s online gaming industry, began buying up shares of CHS in 2016. The last public comment the investor made about CHS was in 2018, when Shanda Group said it had a “good relationship” with CHS and supported the company’s strategy and management team.
The COVID-19 pandemic has accelerated the pace of artificial intelligence adoption, and healthcare leaders are confident AI can help solve some of today’s toughest challenges, including COVID-19 tracking and vaccines.
The majority of healthcare and life sciences executives (82%) want to see their organizations more aggressively adopt AI technology, according to a new survey from KPMG, an audit, tax and advisory services firm.
Healthcare and life sciences (56%) business leaders report that AI initiatives have delivered more value than expected for their organizations. However, life sciences companies seem to be struggling to select the best AI technologies, according to 73% of executives.
As the U.S. continues to navigate the pandemic, life sciences business leaders are overwhelmingly confident in AI’s ability to monitor the spread of COVID-19 cases (94%), help with vaccine development (90%) and aid vaccine distribution (90%).
KPMG’s AI survey is based on feedback from 950 business or IT decision-makers across seven industries, with 100 respondents each from healthcare and life sciences companies.
Despite the optimism about the potential for AI, executives across industries believe more controls are needed and overwhelmingly believe the government has a role to play in regulating AI technology. The majority of life sciences (86%) and healthcare (84%) executives say the government should be involved in regulating AI technology.
And executives across industries are optimistic about the new administration in Washington, D.C., with the majority believing the Biden administration will do more to help advance the adoption of AI in the enterprise.
“We are seeing very high levels of support this year across all industries for more AI regulation. One reason for this may be that, as the technology advances very quickly, insiders want to avoid AI becoming the ‘Wild Wild West.’ Additionally, a more robust regulatory environment may help facilitate commerce. It can help remove unintended barriers that may be the result of other laws or regulations, or due to lack of maturity of legal and technical standards,” said Rob Dwyer, principal, advisory at KPMG, specializing in technology in government.
Healthcare and pharma companies seem to be more bullish on AI than other industries are.
The survey found half of business leaders in industrial manufacturing, retail and tech say AI is moving faster than it should in their industry. Concerns about the speed of AI adoption are particularly pronounced among small companies (63%), business leaders with high AI knowledge (51%) and Gen Z and millennial business leaders (51%).
“Leaders are experiencing COVID-19 whiplash, with AI adoption skyrocketing as a result of the pandemic. But many say it’s moving too fast. That’s probably because of current debate surrounding the ethics, governance and regulation of AI. Many business leaders do not have a view into what their organizations are doing to control and govern AI and may fear risks are developing,” Traci Gusher, principal of artificial intelligence at KPMG, said in a statement.
Future AI investment
Healthcare organizations are ramping up their investments in AI in response to the COVID-19 pandemic. In a Deloitte survey, nearly 3 in 4 healthcare organizations said they expect to increase their AI funding, with executives citing making processes more efficient as the top outcome they are trying to achieve with AI.
Healthcare executives say current AI investments at their organizations have focused on electronic health record (EHR) management and diagnosis.
To date, the technology has proved its value in reducing errors and improving medical outcomes for patients, according to executives. Around 40% of healthcare executives said AI technology has helped with patient engagement and also to improve clinical quality. About a third of executives said AI has improved administrative efficiency. Only 18% said the technology helped uncover new revenue opportunities.
But AI investments will shift over the next two years to prioritize telemedicine (38%), robotic tasks such as process automation (37%) and delivery of patient care (36%), the survey found. Clinical trials and diagnosis rounded out the top five investment areas.
At life sciences companies, AI is primarily deployed during the drug development process to improve record-keeping and the application process, the survey found. Companies also have leveraged AI to help with clinical trial site selection.
Moving forward, pharmaceutical companies will likely focus their AI investments on discovering new revenue opportunities in the next two years, a pivot from their current strategy focusing on increasing profitability of existing products, according to the survey. About half of life sciences executives say their organizations plan to leverage AI to reduce administrative costs, analyze patient data and accelerate clinical trials.
Industry stakeholders are taking steps to advance the use of AI and machine learning in healthcare.
The Consumer Technology Association (CTA) created a working group two years ago to develop some standardization on definitions and characteristics of healthcare AI. Last year, the CTA working group developed a standard that creates a common language so industry stakeholders can better understand AI technologies. A group also recently developed a new standard to advance trust in AI solutions.
On the regulatory front, the U.S. Food and Drug Administration (FDA) last month released its first AI and machine learning action plan, a multistep approach designed to advance the agency’s management of advanced medical software. The action plan aims to force manufacturers to be more rigorous in their evaluations, according to the FDA.
Even though signs point to a post-COVID spike in health system mergers, retailers, insurers, and other healthcare industry players already far exceed health system scale. Even the largest of the “mega health systems” pale in comparison to other healthcare companies up and down the value chain, as shown in the graphic above. And with the exception of pharma, these other industry players have seen revenues surge during the pandemic, while health system growth has stagnated.
According to a recent report from Kaufman Hall, hospitals saw a three percent reduction in annual total gross revenue in 2020.The majority of the decrease stemmed from a six percent decline in outpatient revenue, as volumes plummeted during the pandemic.
The largest companies listed here, including Walmart, Amazon, CVS, and UnitedHealth Group, continue to double down on vertical integration strategies, configuring an array of healthcare assets into platform businesses focused on delivering value to consumers.
To remain relevant, health systems will need to increase their focus on this strategy as well, assembling the right capabilities for a marketplace driven by value, at a scale that enables rapid innovation and sustainability.
We spend a lot of our time helping health system executives craft and communicate enterprise-level strategy: entering new markets or businesses, developing new services, responding to competitive threats, exploring partnership opportunities. Strategy is about the “what” and “when”—what moves are we going to make, and when is the right time to make them?Answering those questions requires an understanding of industry and market forces, organizational capabilities, and consumer needs. But there’s another important component that often goes missing in the rush to get to the “how” of strategy execution: the “why”.
Yet understanding why we’re pursuing one path and not another is critical for aligning stakeholders: physicians, operators, and (importantly) the board. Joan Didion famously wrote that “we tell ourselves stories in order to live”, and we’d agree; the “why” is about storytelling. What’s the strategic narrative, or story, that frames our intended actions? Making sure that everyone involved—including our patients and consumers—has a clear understanding of why we’re opening a new facility, or launching a new service, or entering into a new partnership, is a key to success.
It’s about sharing the vision of our desired role as a system, and the part we see ourselves playing in improving healthcare. We’re sometimes criticized for spending so much time on “framing” and drawing “pretty graphics”, but we’ve come to believe that the ability to succinctly and compellingly describe the “why” of strategy is as important as coming up with the vision in the first place.And then, of course, delivering on the “why”—a job made easier if all involved are clear on just what it is.
“I don’t think we have good enough information to show how we should be deploying telemedicine,” a physician leader recently told us. “If we can’t show that a virtual visit can adequately substitute for an in-person visit, then we should be focusing on making sure patients know it’s safe to come in.” It struck us that viewing telemedicine as a direct substitute for an office visit was a narrow and antiquated way to think about virtual care.
Moreover, the argument that telemedicine visits are potentially cost-increasing if they are “additive” to other care interactions, rather than “substitutive”, is rooted in fee-for-service payment: more patient-provider interactions equals more billable visits, and with more visits, we run the risk of increasing costs.
Telemedicine (both video and phone visits) likelytaps into pent-up demand for accessby patients who would otherwise not seek care. Some patients could be aided by more frequent, brief encounters; this is considered a failure only when viewed through the lens of fee-for-service payment. (Honestly, with primary care accounting for less than 6 percent of total healthcare spending, it’s hard to argue that additional telemedicine visits will be responsible for supercharging the cost of care.) Of course, there are many clinical situations in which in-person interaction—to perform a physical exam, measure vitals, observe a patient—is fundamental. Patients know this, and understand that sometimes they’ll need to be seen in person. But hopefully that next encounter will be more efficient, having already covered the basics.
The ideal care model will look different for different patients, and different kinds of clinical problems—but will likely be a blend of both virtual and in-person interactions, maximizing communication, information-gathering, and patient convenience.
As “consumerism” becomes an ever-greater focus of health system strategy, we’ve begun to field a number of questions from leaders looking to develop a better understanding of consumers in their market.
In particular, there’s a growing desire for more sophistication around consumer segmentation—understanding how preferences and behavior differ among various kinds of patients.
Traditional segmentation has largely been marketing-driven, helping to target advertising and patient recruitment messages to key groups. For that, the old-school marketing segments were good enough: busy professionals, the worried well, the growing family, and so forth.
But as systems begin to develop product offerings (telemedicine or home-based services, for example) for target populations, those advertising-based segments need to be supplemented with a more advanced understanding of care consumption patterns over time. Segmentation needs to be dynamic, not static—how does a person move through life stages, and across care events, over time?
A single consumer might be in different segments depending on the type of care they need: if I have a new cancer diagnosis, that matters more than whether I’m a “busy professional”, and my relevant segment might be different still if I’m just looking for a quick virtual visit.
Layered on top of demographic and clinical segments is the additional complexity of payer category—am I a Medicare Advantage enrollee or do I have a high-deductible exchange plan?
With consumers exercising ever greater choice over where, when, and how much care to receive, understanding the interplay of these different kinds of segments is fast becoming a key skill for health systems—one that many don’t currently have.
Humana, the nation’s second-largest Medicare Advantage (MA) insurer, is pushing further into home-based care, partnering with Denver-based startup DispatchHealthto offer its members—especially those with conditions like heart failure, chronic obstructive pulmonary disease, and chronic cellulitis—access tohospital-level care at home.
The service will initially be available in the Denver and Tacoma, WA markets, with plans to expand to Arizona, Nevada, and Texas across 2021. Humana members who meet hospital admission criteria will receive daily home visits from an on-call, dedicated DispatchHealth medical team, as well as 24/7 physician coverage enabled by remote monitoring and an emergency call button.
DispatchHealth will also coordinate other patient care and wraparound services in the home as needed, including pharmacy, imaging, physical therapy, durable medical equipment, and meal delivery. Dispatch’s earlier offerings centered around home-based, on-demand urgent and emergency care services, now available in at least 29 cities nationwide.
Humana’s partnership with DispatchHealth could deliver a full care continuum of home-based services to its Medicare Advantage enrollees and has the potential to displace hospitals from at least a portion of acute care services.
Post-COVID, it’s becoming increasingly clear that the nexus of care delivery has shifted even more rapidly to consumers’ homes—and traditional providers will need to rethink service strategies accordingly.
Hardly one month into 2021, the pressing priorities facing healthcare leaders are abundantly clear.
First, we will be living in a world preoccupied by COVID-19 and vaccination for many months to come. Remember: this is a marathon, not a sprint. And the stark reality is that the vaccination rollout will continue well into the summer, if not longer, while at the same time we continue to care for hundreds of thousands of Americans sickened by the virus. Despite the challenges we face now and in the coming months in treating the disease and vaccinating a U.S. population of 330 million, none of us should doubt that we will prevail. Despite the federal government’s missteps over the past year in managing and responding to this unprecedented public health crisis, historians will recognize the critical role of the nation’s healthcare community in enabling us to conquer this once-in-a-generation pandemic.
While there has been an overwhelming public demand for the vaccine during the past couple of weeks, there remains some skepticism within the communities we serve, including some of the most-vulnerable populations, so healthcare leaders will find themselves spending time and energy communicating the safety and efficacy of vaccines to those who may be hesitant. This is a good thing. It is our responsibility to share facts, further public education and influence public policy.COVID-19 has enhanced public trust in healthcare professionals, and we can maintain that trust if we keep our focus on the right things — namely, how we improve the health of our communities.
And as healthcare leaders diligently balance this work, we also have a great opportunity to reimagine what our hospitals and health systems can be as we emerge from the most trying year of our professional lifetimes. How do you want your hospital or system organized? What kind of structural changes are needed to achieve the desired results? What do you really want to focus on? Amid the pressing priorities and urgent decision-making needed to survive, it is easy to overlook the great reimagination period in front of us. The key is to forget what we were like before COVID-19 and reflect upon what we want to be after.
These changes won’t occur overnight. We’ll need patience, but here are my thoughts on five key questions we need to answer to get the right results.
1. How do you enhance productivity and become more efficient? Throughout 2021, most systems will be in recovery mode from COVID’s financial bruises. Hospitals saw double-digit declines in inpatient and outpatient volumes in 2020, and total losses for hospitals and health systems nationwide were estimated to total at least $323 billion. While federal relief offset some of our losses, most of us still took a major financial hit. As we move forward, we must reorganize to operate as efficiently as possible. Does reorganization sound daunting? If so, remember the amount of reorganization we mustered to work effectively in the early days of the pandemic. When faced with no alternative, healthcare moved heaven and earth to fulfill its mission. Crises bring with them great clarity. It’s up to leaders to keep that clarity as this tragic, exhausting and frustrating crisis gradually fades.
2. How do you accelerate digital care? COVID-19 changed our relationship with technology, personally and professionally. Look at what we accomplished and how connected we remain. We were reminded of how high-quality healthcare can go unhindered by distance, commutes and travel constraints with the right technology and telehealth programs in place. Health system leaders must decide how much of their business can be accommodated through virtual care so their organizations can best offer convenience while increasing access. Oftentimes, these conversations don’t get far before confronting doubts about reimbursement. Remember, policy change must happen before reimbursement catches up. If you wait for reimbursement before implementing progressive telehealth initiatives, you’ll fall behind.
3. How will your organization confront healthcare inequities? In 2020, I pledged that Northwell would redouble its efforts and remain a leader in diversity and inclusion. I am taking this commitment further this year and, with the strength of our diverse workforce, will address healthcare inequities in our surrounding communities head-on. This requires new partnerships, operational changes and renewed commitments from our workforce. We need to look upstream and strengthen our reach into communities that have disparate access to healthcare, education and resources. We must push harder to transcend language barriers, and we need our physicians and medical professionals of color reinforcing key healthcare messages to the diverse communities we serve. COVID-19’s devastating effect on communities of color laid bare long-standing healthcare inequalities. They are no longer an ugly backdrop of American healthcare, but the central plot point that we can change. If more equitable healthcare is not a top priority, you may want to reconsider your mission. We need leaders whose vision, commitment and courage match this moment and the unmistakable challenge in front of us.
4. How will you accommodate the growing portion of your workforce that will be remote?Ten to 15 percent of Northwell’s workforce will continue to work remotely this year. In the past, some managers may have correlated remote work and teams with a decline in productivity. The past year defied that assumption. Leaders now face decisions about what groups can function remotely, what groups must return on-site, and how those who continue to work from afar are overseen and managed. These decisions will affect your organizations’ culture, communications, real estate strategy and more.
5. How do you vigorously hold onto your cultural values amid all of this change? This will remain a test through 2021 and beyond. Culture is the personality of your organization. Like many health systems and hospitals, much of Northwell’s culture of connectedness, awareness, respect and empathy was built through face-to-face interaction and relationships where we continually reinforced the organization’s mission, vision and values. With so many employees now working remotely, how can we continue to bring out the best in all of our people? We will work to answer that question every day. The work you put in to restore, strengthen and revitalize your culture this year will go a long way toward cementing how your employees, patients and community come to see your organization for years to come. Don’t underestimate the power of these seemingly simple decisions.
While we’ve been through hell and back over the past year, I’m convinced that the healthcare community can continue to strengthen the public trust and admiration we’ve built during this pandemic. However, as we slowly round the corner on COVID-19, our future success will hinge on what we as healthcare organizations do now to confront the questions above and others head-on. It won’t be quick or easy and progress will be a jagged line. Let’s resist the temptation to return to what healthcare was and instead work toward building what healthcare can be. After the crisis of a lifetime, here’s our opportunity of a lifetime. We can all be part of it.
HENRY KOTULA 