Top Six Healthcare Executive Challenges in 2019

The pace of change in healthcare is not slowing down; in fact, it is accelerating. Healthcare organizations that are most successful in 2019 will know what challenges and changes are coming down the pipeline, and they will prepare accordingly.

To help ensure you don’t get left behind, we’ve assembled the top six challenges the industry will face in 2019.

1. Shifting the focus from payment reform to delivery reform. For the past few years, C-suite leaders at healthcare organizations have been focused on navigating healthcare payment reform—attempting to preserve, improve, and maintain revenue. Amidst those efforts, delivery reform has sometimes taken a back seat.

That will need to change in 2019. Organizations that are the most successful will focus more on patient care than revenue, and they will see improved outcomes and reduced costs as a result.

Many organizations are already exploring delivery reform with initiatives that focus on:

  • Remote health monitoring and telemedicine;
  • Population health management;
  • Patient engagement;
  • Social determinants of health; and
  • Primary care.

In 2019, however, they will need to bring all of these initiatives together to implement sustainable improvements in how healthcare is delivered.

An added bonus? Organizations that accomplish this will see enhanced revenue streams as value-based reimbursement accelerates.

2. Wrestling with the evolving healthcare consumer. Healthcare consumers are demanding more convenient and more affordable care options. They expect the same level of customer service they receive from other retailers—from cost-estimation tools and online appointment booking to personalized interactions and fast and easy communication options such as text messaging and live chats.

Organizations that don’t deliver on these expectations will have a difficult time retaining patients and attracting new ones.

That’s not the only consumer-related challenge healthcare organizations will face. In 2019, millennials (between the ages of 23 and 38), will make up nearly a quarter of the U.S. population.

This generation doesn’t value physician-patient relationships as highly as previous generations. In fact, nearly half of them  do not have a personal relationship with their physician, according to a 2015 report by Salesforce.

Finding ways to maintain or increase the level of humanity and interaction with millennials will be a key challenge in 2019. Patient navigator solutions and other engagement tools will be critical to an organization’s success.

3. Clinician shortages. Physician and nurse shortages will continue to intensify in 2019, creating significant operational and financial challenges for healthcare organizations.

The most recent numbers from the Association of American Medical Colleges predict a shortage of up to 120,000 physicians by 2030. On the nursing side, the Bureau of Labor Statistics projects a need for 649,100 replacement nurses by 2024.

The implications of the shortages, combined with the fact that healthcare organizations face a number of new challenges in the coming years, are many. Fewer clinicians can lead to burnout, medical errors, poorer quality, and lower patient satisfaction.

Healthcare organizations that thrive amidst the shortages will find new ways to scale and leverage technology to streamline work flows and improve efficiencies.

4. Living with EHR choices. Despite the hype and hopes surrounding EHRs, many organizations have found that they are failing to deliver on their expectations.

recent Sage Growth Partners survey found that 64 percent of healthcare executives say EHRs have failed to deliver better population health management tools, and a large majority of providers are seeking third-party solutions outside their EHR for value-based care.

The survey of 100 executives also found that less than 25% believe their EHRs can deliver on core KLAS criteria for value.

As we recently told Managed Healthcare Executive, that statistic is striking, considering how important value-based care is and will continue to be to the industry.

Despite the dissatisfaction surrounding EHRs, switching EHRs may be a big mistake for healthcare organizations. A recent Black Book survey found 47% of all health systems who replaced their EHRs are in the red over their replacements. A whopping 95% said they regret the decision to change systems.

Hospitals and physician may not be entirely happy with their EHR choices, but the best course may be to stick with their system. Highly successful hospitals and health systems will find ways to optimize workflow and patient care which may involve additional IT investments and best of breed investment approaches, rather than keeping all of the proverbial eggs in the EHR basket.

5. Dealing with nontraditional entrants and disruptors. In 2018, several new entrants entered and/or broadened their reach into healthcare.

Amazon acquired online pharmacy retailer PillPack, and partnered with JPMorgan Chase and Berkshire Hathaway to create a new healthcare partnership for their employees. Early in 2018, Apple announced it was integrating EHRs onto the iPhone and Apple watch, and recently, Google hired Geisinger Health CEO David Feinberg for a newly created role, head of the company’s many healthcare initiatives.

New partnerships have also arisen between traditional healthcare entities that could result in significant healthcare delivery changes. Cigna and Express Scripts received the go-ahead from the DOJ for their merger in September, and CVS and Aetna formally announced the completion of their $70 billion merger November 28.

Read more about the top two ways the CVS-Aetna merger could change healthcare.

All of these new industry disruptors and mergers will impact healthcare organizations, likely creating new competition, disrupting traditional healthcare delivery mechanisms, creating price transparency and pressures, and fostering higher expectations from consumers in 2019. Keeping an eye on these potential disrupters will be important to ensuring sustained success in the long term.

6. Turning innovation into an opportunity. From new diagnostic tests and machines to new devices and drug therapies—the past few years in healthcare have seen exciting and lifesaving developments for many patients. But these new devices and treatment approaches come with a cost.

One of biggest 2018 developments that best exemplifies the challenge between innovation and cost is CAR T-cell therapy. This new cancer treatment is already saving lives, but it racks up to between $373,000 and $475,000 per treatment. When potential side effects and adverse events are accounted for, costs can reach more than $1 million per patient.

Finding the best way to incorporate new treatments like this one, while balancing outcomes, cost, and healthcare consumer demands, will be a top challenge for healthcare organizations in 2019.




Healthcare execs say EHRs don’t do enough to manage value-based contracts

Dive Brief:

  • A survey of 100 healthcare executives found that most of them are seeing ROI on value-based contracts, but investments in EHRs are not sufficient to manage those contracts.
  • The Sage Growth Partners study found most respondents were not satisfied with their EHRs’ “ability to help them manage core functions necessary to succeed in (value-based care) — such as care coordination, risk stratification, decision support and patient engagement.”
  • About two-thirds of respondents said EHRs are not delivering promises concerning lower costs, better population health management and improved patient and physician satisfaction.

Healthcare providers are increasingly looking to EHRs and third-party population health management solutions to help them with value-based care.

A recent Healthcare Financial Management Association (HFMA) survey found that value-based payment programs doubled since 2015. Nearly three-quarters of executives in the HFMA survey said their organizations achieved positive financial results, including return on investment, from value-based payment programs.

Although providers expect value-based programs to continue to increase, the new Sage Growth Partners survey found dissatisfaction with EHRs and concern they are not helping enough in value-based care. The report found 64% of respondents said EHRs haven’t delivered many critical value-based tools. At least 60% of respondents said they are looking for value-based solutions beyond EHRs.

The survey included a finding that will likely get the attention of EHR and population health management vendors — half of respondents said they are somewhat or highly likely to switch population health management vendors over the next three years.

Nearly three-quarters of survey respondents have had an EHR for at least three years. About half also have third-party population health management solutions. These findings offer a glimpse into the dissatisfaction as well as opportunity in population health management.

The executives surveyed said there are issues with interoperability, addressing social determinants of health, patient engagement, stakeholder coordination and risk analytics. They also spoke of health systems having trouble aggregating and using data from numerous EHR systems and other data sources.

These issues have led half to two-thirds of healthcare executives turning to population health management or do-it-yourself solutions beyond EHRs “to compensate for the lack of these capabilities within their EHRs.” Many of those executives said population health management solutions enabled their value-based success. Those successes are also coming at a lower cost than the investments in EHRs.

The study authors predicted more healthcare executives will look beyond EHRs in the coming years to help with value-based contracting. They said “suboptimal tools” that manage care and costs for populations won’t be enough in coming years.

“As (value-based care) reaches the tipping point, and as they take on programs with greater risk and greater complexity, they will need to continue looking beyond their EHRs to get the functionality they need,” the authors wrote.


Will Getting Bigger Make Hospitals Get Better?

Image result for Will Getting Bigger Make Hospitals Get Better?


This month, two hospital mega-mergers were announced between Ascension and Providence, two of the nation’s largest hospital groups; and, between CHI and Dignity Health.

In terms of size, the CHI and Dignity combination would create a larger company than McDonald’s or Macy’s in terms of projected $28 bn of revenue. (Use the chart of America’s top systems to do the math).

For context, other hospital stories this week discuss layoffs at Virtua Health System in southern New Jersey. And this week, the New Jersey Hospital Association annual report called the hospital industry the “$23.4 billion economic bedrock” of the state.

Add a third important item to paint the state-of-the-U.S. hospital-industry picture: Moody’s negative ratings outlook for non-profit hospital finances for 2018.

So will getting bigger through merger and consolidation make the hospital business better?

In the wake of the CVS-Aetna plan to join together, the rationale to go big seems rational. Scale matters when it comes to contracting with health insurance plans at the front-end of pricing and financial planning for the CFO’s office, and to managing population health by controlling more of provider elements of care from several lenses: influencing physician care; crafting inpatient hospital care; doing smarter, cheaper supply purchasing; and leaning out overhead budgets for things like marketing and general management.

But the Wall Street Journal warned today the “serious condition” of U.S. hospitals, despite these big system mergers.

Health Populi’s Hot Points: In the past two years, I’ve had the amazing opportunity of speaking about new consumers and patients growing into healthcare payors with leadership from hospitals in over 20 states, some more rural, some more urban, and all in some level of financial crisis mode.

After describing the state of this consumer in health and healthcare, and how she/he got here, I have challenged hospital leadership to think more like marketers with a fierce lens on consumer experience and values. That equal proportions of U.S. consumers trust large retail and digital companies to help them manage their health is a jarring statistic to these hospital executives. The tie-up between CVS and Aetna marries the retail health/healthcare segments and responds to this consumer trust issue.

But then, I remind them that nurses, pharmacists, and doctors are the three most-trusted professions in America.

These three professional clinicians are the human capital that comprise the heart of a hospital in a community.

Hospitals should be mindful that trust is necessary for patient/health engagement. And the trust is with hospitals if the organization chooses to leverage that goodwill for a value-exchange. Hospitals are economic engines in their local communities — often, the largest employer in town. “Everyone” in most communities knows someone who works in a hospital.

And hospital employees spend money in communities, bolstering local employment and tax bases.

Partnering with patients means empathizing with them as both clinical subjects and consumers. For the latter, refer to the sage column from JAMA which recommends that Value-Based Healthcare Means Valuing What Matters to Patients. This means thinking about the value-chain of the patient journey, from keeping people well in their communities through to managing sticker-shock in the financial office. The financial toxicity of healthcare is one risk factor threatening the hospital-patient relationship with the patient-as-payor.

As Mufasa told Simba in The Lion King, “You are more than what you have become. Remember who you are.”



Relevance is King, and “The Top of the Funnel” is Most Relevant to The Most People


CVS’ recent announcement that the company is expanding its reach in chronic care management is the latest sign that the market has never been more competitive or complicated. (Are you asking yourself, “which market?”) CVS isn’t just protecting its PBM business and driving sales for its retail business. The company has plans to provide one-on-one support and coaching — in a store, via phone, or video — to people who have diabetes, asthma, hypertension, hypercholesterolemia, or high cholesterol, and depression.

This, of course, follows in the footsteps of other companies encroaching on traditional provider-territory, like Optum. OptumCare, the care delivery arm of the company, has 22,000 physicians in 30 markets and 200 surgery centers in 33 states. The combination of the two presents a formidable continuum that could provide consumers with most of the outpatient services they’ll ever need. In other words, the health system brand defined by superior service lines will continue to be less and less relevant as the “top of the funnel” becomes more competitive and more important.

Despite the fierce competition, many health systems continue to focus a large majority of marketing dollars on down-funnel service line care, such as chronic disease treatments and surgeries. There’s logic to that strategy: market and differentiate the services that are most profitable and keep you in business. The problem is that logic doesn’t work in a digital age when consumers have more choices and less patience. Their healthcare mindshare is occupied by a host of companies — like CVS Health and OptumCare — that are more relevant to their daily life than heart surgery or cancer care.


Therein lies the problem for health systems. When Joe Public interacts with your brand, relevance is king. And as we all know, specialty care isn’t relevant to the vast majority of people most of the time. When the competitive field wasn’t as crowded and consumers weren’t showered with more than 5,000 ads every day, it was easier to make an impression that might not be relevant in the moment but could be recalled later when it mattered. That day has passed. The emphasis must shift from awareness and impressions to real engagement.

Health systems — just like any other brands — must be relevant and provide value as often as possible to stay engaged with consumers. Think about your continuum of services as a funnel (Figure 1). Primary care, urgent care, ER, and health & wellness programs sit at the top as these are the services most often used, and represent the most common entry point into your system.

They are also more subject to cost and convenience scrutiny. To maximize the path to specialty and surgical care in the middle of the funnel, health systems can’t just rely on people who go through the side of the funnel – those who did their research to determine which hospital had the best cardiovascular outcomes in the region. For most health systems, the vast majority of their down-funnel, inpatient service line volume — more than 75% — comes from prior top of the funnel activity, not from out of the blue. Health systems need to get as many people in the top of the funnel to build brand, build engagement, and feed all service lines.

Why? Because this is the best way to engage consumers and build brand loyalty. Brand loyalty develops as consumers repeatedly engage with a service over time, and they become repeat customers if they are satisfied. A good experience at the top of the funnel can lead to more profitable business in the middle of the funnel. In fact, our research and work with hundreds of health systems across the country reveals that most people who receive specialty care at a health system had at least one prior experience. And where does most engagement with the healthcare system occur? At the top of the funnel.

Back to CVS. Health systems run the risk of being expensive specialty factories if they cede control of the top of the funnel to competitors — especially competitors who are not other hospitals. The strongest relevance is at the top of the funnel, which is where prescriptions and chronic care management live along with a host of other more frequently used services. CVS Health, Optum, Walgreens, Amazon, and even Google present formidable, well-resourced companies vying for the top of the funnel in some capacity.

What’s your strategy?

True value-based care is a trillion-dollar unicorn for the health care industry

True value-based care is a trillion-dollar unicorn for the health care industry

In Silicon Valley, Kendall Square, and points in between, unicorns are more than mythical creatures that adorn software engineers’ ironic T-shirts. They’re disruptive technology behemoths with billion-dollar-plus valuations. These beasts have largely shied away from the health technology sphere over the last decade, despite many promising upstarts. Maybe we’ve been hunting for the wrong kind.

Get ready for the uber-unicorn. It won’t be a single, enormous company with a trillion-dollar valuation. Instead, it’s a movement called value-based care.

Value-based care isn’t a new concept. But it’s been used a bit bashfully, traditionally referring to carrot-and-stick-based incentive payments and penalties for physicians. Today these pale in comparison to the fee-for-service care that rewards reactive, episodic, paternalistic care — and lots of it.

Here’s what I mean by true value-based care: fully capitated payment contracts in which a lump sum of money is available to treat a patient over the course of a year. No penalties or incentives, simply ownership of the total cost of care and the total cost of outcomes. The better the care, the more money the organization bearing the risk receives. This is how to best reward exceedingly efficient, effective health care.



7 quotes from Geisinger’s Greg Burke on engaging patients and improving clinical hospitality

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At Danville, Pa.-based Geisinger Health System, Greg Burke, MD, an internal medicine physician and chief patient experience officer, aims to ensure the system’s patients are treated with the same type of respect and attention comparable to that delivered to guests at upscale hotels.

In November 2015, Geisenger made national headlines when the system’s CEO David Feinberg, MD, announced patients dissatisfied with their care experience could request refunds for out-of-pocket costs. To date, the system has issued $400,000 in refunds to patients.

Recently, Dr. Burke spoke with U.S. News & World Report on issues surrounding the patient experience, as well as Geisenger’s patient refund program.

Here are seven quotes from Dr. Burke’s interview in U.S. News & World Report.

The Opportunities and Challenges of the MSSP ACO Program: A Report From the Field

New Journal Article: A Report From the Field


The trillion dollar shift in healthcare payment “from volume to value” is well underway with both public and private payers and purchasers pushing provider organizations to participate in outcome-based risk contracts, stepping up from pay-for-performance and medical home models to a variety of accountable care and bundled payment programs.

But what are we to take away from the mixed results of these programs — from the lack of savings in the Comprehensive Primary Care demonstration, to the dropouts from the Pioneer program, the recently released underwhelming results from the first year of the Bundled Payment for Care Improvement Initiative, or the 2015 results from the Medicare Shared Savings Program?

One approach would be for partisans for each of these approaches to search for positive nuggets in the results from their preferred program, while heaping scorn on the other “competing” reforms.

Another would be to retreat altogether from the aspirations of achieving better care at lower cost, towards either resignation towards ever-escalating health care costs or more likely to (altogether regretful!) rationing of access to good healthcare for the most vulnerable in our society.

A third path would be to acknowledge that there is no magic bullet for “transforming healthcare” overnight, and that the work of redesigning our delivery systems to meet the expectations of the outcome-based payment models will be slow, hard, and uneven. We would accept that there are likely multiple payment reforms that will need to be implemented alongside each other, targeting different healthcare markets and different participants. (Capitated payments for truly integrated delivery networks. Mandatory bundled payments for proceduralists and hospitals. Accountable care for independent physician networks). And each model will need to be iterated and tweaked and incrementally improved.

That is what I choose to believe.

We are publishing today in the new issue of the American Journal of Managed Care, “A Report From the Field,” the detailed description of what our two ACO “freshman” accomplished in 2015, and openly discussing the challenges we faced, what we are doing differently now, and some policy changes that can put more wind to the backs of those in these trenches.

Here are a few of the key findings:


We have learned that, given the right support and incentives, independent primary care practices can embrace population health and practice redesign. These efforts can begin to bear fruit in improved patient access, quality of care, and appropriate utilization in the short term. We strongly believe that the benefits of the program to patients and the taxpayer are not limited to those ACOs that received shared savings distributions. However, lack of recognition of these contributions may stifle continued innovation and physician engagement with alternative payment models. Aledade is committed to navigating these challenges and we are committed to sharing our learning so that more independent physician-led ACOs can succeed in their mission to profitably deliver better care at lower cost. We also hope that policy makers and commercial payers continue to work to remove the unintended policy headwinds ACOs must presently overcome. – See more at:


Emerging role: How a CHIO harnesses data for population health

John Showalter, MD

‘The CHIO role is much more about the data—the data integration, the data analytics and looking at how we can use insights to improve care’