Visions of the Future of Healthcare

Customers to your hospital are the future kings and queens who, through their behaviors, actions, and choices, will impact every aspect of your operations. Consumer needs and demands will largely dictate which health care providers flourish, which merely remain viable, and which cling for survival.

Rather than become paralyzed by the notion that 10,000 years of streamlined medical dispensation is about to be turned on its head, there is another way to proceed: recognize that with great tumult comes great opportunity.

Forward Thinking Leadership Required
There has perhaps never been a time in which effective, forward-thinking leadership has become so vital. While much of the data you need to make publically available is a given, there is still wide leeway in terms of how else you can support the consumer. This can mean providing research data, meaningful comparisons, or up-to-the-minute information.

The role of information technology and the ubiquity of personal health records will ultimately help to streamline and remake operations, flow of information, availability of data, profitability, and, most importantly, quality of care. As consumer-driven health plans (CDHP) predominate in the health care marketplace, your patient constituencies’ health plan choices will serve as beacons as to what services to provide, which ones to accent in major ways, and which to merely have available.

Preferences Count – Paying attention to the preferences of consumers (stratified by generation or age) yields the potential for enjoying an extraordinary competitive edge. Knowing the propensity of younger consumers to embrace smartphone technology, social media, and all the disparate ways of gathering information – video, photo, audio, text, instant messages, real time conversation, etc. – virtually serves as a blueprint for meeting the needs of this huge patient segment.

Understand the retail medicine phenomenon: the rise of convenience care, boutique medicine, and other variations that are likely to develop. Embrace this movement as opposed to cringing at the thought of it. Doing so will yield a panoply of new ideas and opportunities. Since, in the end, your hospital’s longstanding reputation, brand, and specific services will represent the aces in the deck of medical care.

While the market for global tourism and its near cousin, regional tourism, continues to heat up, accenting the features and benefits of staying home for elaborate medical procedures and strategically establishing niches in those areas where distant competitors can not compete with you can secure your hospital’s position into the foreseeable future.

As with other developments in the quickly churning health care industry, meeting the challenge of globalization head on is far more adaptive and productive than throwing up one’s hands and lamenting, “What’s the use?”

Customers Have Choices – All of these developments point to the ever-present need to bolster existing direct-marketing efforts to consumers while establishing new approaches, new campaigns, and new channels to reach consumers in ways that are attractive, consistent with the times, ethical, appropriate, and ultimately compelling.

Patients are truly becoming customers, and customers of the health care industry, as in all other industries, quickly become aware that they have choices (most of the time, far too many choices). So, when an outstanding local option appears, why wouldn’t they capitulate?

Health care needs are not going to go away, but they are going to shift. As it has been done in the U.S. for the last decade or so, opportunities for you and your hospital will probably stay at the forefront of health care as it’s dispensed in your community.

A Five to Seven Year Outlook
Let’s take a near-term look at high-probability scenarios with an eye on identifying the opportunities that lie within.

Even with legislation and reform, health care costs, the ever-diminishing dollar, and increased consumer expectations as to what is possible and achievable will continue to keep expenses on an upward trajectory. Insurance reforms, in one manner or another, are likely to increase the pool of customers who are, at present, “priced out of the market” that would otherwise become long-term loyal patients of your facility. Efficiency in the use of information (as well as in personal technologies) will have somewhat of a counter-balancing effect in keeping costs in check or, at least, not rising quite as steeply as they have in the first decade of the 21st century.

Those who will prevail are the providers adept at harnessing technology and basking in the accrued benefits of doing so, unlike those competitors who are still trying to figure out where to put the plug into the wall. As Doctor David Blumenthal, national coordinator of Health Information Technology, remarks, “There’s no way to transform the health care system without information technology.” The corollary to that statement is there is no way to transform your hospital without information technology.

According to the Computer Science Corporation, integration of information technology will in essence mean “one database across clinical and financial, ambulatory and in-patient data [that] will ensure that care can be coordinated, standards met, and reporting and billing be a by-product of care.”

Perhaps the biggest visible shift apparent on a daily basis will be your hospital’s proactive efforts to meet the needs of consumers by employing what you know about them coupled with understanding the health care life cycle. You’ll want to keep them finely tuned, much as an auto-mechanic does with a car. Rather than responding in episodic fashion to singular health care needs, a holistic, systematic approach to customer care will rule the day.

Supply and Demand – It’s likely that the demand for high-quality health care will exceed the available supply, at least domestically. Impending reforms in health care insurance, in whatever form they take, will result in provider supply constraints that show up as delays in getting appointments, receiving care, and attaining followup visits. This might result in customers feeling as if appointments are being rationed.

HealthLeaders Media, in mid 2009, featured an article with the observation that “one year after Massachusetts mandated health insurance, the number of adults unable to find a primary care provider rose by 75% and waits for referral appointments increased to as long as 50 days.” This might not be the norm, but it is an indicator of the potential disruptions in supply.

Basic math indicates that with a decreasing ratio of primary care providers to customers, customer frustration is bound to boil over. This will fuel the growth of retail and boutique medicine and exacerbate the frustrations of hospital executives who will bemoan the Wal-Martization of bread and butter services.

Years Before Profitability Gains – In their report, “U.S. Healthcare in the Year 2015,” authors Jordan Battni and Walt Zywiak noted that acceleration of cost-cutting and reimbursement reform efforts will place continuing pressure on healthcare-delivering organizations to reduce waste and eliminate fraud as well as reform billing and recovery practices.

Still, it will be years before such measures will make a notable impact on a hospital’s profitability. The introduction of new systems, new procedures, and new models for administration virtually all go through an initial phase where it appears the massive effort of adopting such procedures was all for naught.

Consider the rise of the PC in the early 1990s. There was a swing economic analysis that showed no increases in worker productivity for many years thereafter. Eventually, a break-even point of sorts was reached, and the intended benefits began to accrue. The decade after, and certainly two decades after, the productivity gains are widely visible.

The real gains in profitability that hospitals may collect over the next five to seven years are likely to come as a result of eliminating waste, redundancy, and misdirected efforts. Doing more with less, in the near term, is likely to yield quicker, more discernable results than the industry-pervasive, system-wide measures being adopted and applied during this time.

One way or the other, health reform is going to impact the industry in unprecedented ways. While no one can say exactly how this will all shake out by the middle of the coming decade, it is safe to say that leaner, more efficient hospital systems will have strategic advantages while lesser providers everywhere have to cope with tidal wave-sized challenges.

Population Shifts
Along with consumers taking greater control and management of their personal health (and that of their families), the increased expectations as to what health care can provide, and perhaps a propensity to opt for select procedures, another trend by mid-decade has become highly observable and irrefutable: the aging of the population.

By 2015 or so, those 65 and over will account for nearly 1/5 of the U.S. population (18%). It is known that this segment employs double the number of physician resources compared to those under age 65. While the demographics for your local area may vary from the norm, one can predict that virtually across the board, the median age of the U.S. will continue to increase.

Accompanying this shift in demographics comes the onset of customers seeking care for chronic conditions. By some estimates, 70% of all doctor visits will be for treatments of chronic or recurring conditions, and it is not only because of the aging of the population. For the foreseeable future, health issues related to an overweight and obese population, despite massive public awareness campaigns, will continue to ratchet upwards.

A Public Health Paradox – On a parallel track, more people than ever are maintaining highly active lifestyles far into their senior years. The development will require demands for unprecedented levels of specific care. For example, knee and hip replacements and various orthopaedic surgeries will see a marked increase before the decade is over, and they will increase manyfold in the decade thereafter.

At the same time, the supply of general practitioners throughout the U.S. is holding steady, not increasing with the population. More doctors are specializing. Fewer see primary care as an attractive career choice. The availability of qualified nurses, an issue for several years running, will continue to be a challenge. This may be offset by the immigration of doctors and nurses from other countries to the U.S. as the globalization of medicine prompts shifts in perceptions, aspirations, and choices of the human resources that populate the health care industry.

It is difficult to determine how harshly near-term developments are likely to impact hospitals across the broad spectrum of services they provide, but this much is known: as in the past, the consuming public will be stratified. Some will take full charge of their personal health, aided and abetted by personal health records and information technology. At the other end of the spectrum, some will continue to play a passive role, preferring to follow the old model characterized by the questions, “Doctor, what’s wrong with me?” And, “Can you fix me?”

The middle ground will further stratify, with some taking charge of their health care periodically as illnesses, accidents, and personal wake-up calls prompt them to do so. Some will dutifully climb out for their annual checkup, flu shots, or whatever the issue “de jour” prompts them to do. Some, not quite in the “Help Doctor, tell me what to do!” camp will haphazardly apply wellness measures as the spirit moves them, or they perceive it is an element of “getting with the times.”

As the population ages on the political front, congressional representatives, especially those representing high median age populations, are likely to push for greater and greater measures of governmental control (or at least government meddling) despite the push-back from other legislators who are predisposed to maintain a laissez-faire approach to the nation’s health care.

IT is the Holy Grail
As with the introduction and installation of new systems in business and industry, the liability of reporting patient safety, security, and privacy issues are likely to loom large. Federal concern, especially about patient privacy, will prompt a new wave of regulation and compliance for the foreseeable future, adding to the cost of the widespread implementation of information technology, and not contributing to the holy grail of IT results: low costs.

The long-term future of hospital IT and its corroborated cousin, the electronic health record, is clear: it will predominate. Yet, over the next five to seven years, the picture is cloudy. John Glaser, CEO at Partners Healthcare in Boston, says that the adoption of electronic health records could be as high as 75% or as low as 25%.

Taking the midpoint of his prediction, 50%, equates to a still fragmented industry in which some hospitals have fully integrated electronically, most are striving to attain that practice, and some continue to straddle the fence with less vigorous adoption schedules. From a competitive and strategic standpoint, it makes no sense to be in either of the trailing groups, but the road to full integration is going to be rocky.

Over the next few years, as odd as it may be to witness, doctors still sporting pens and clipboards will make the same halls as those who wouldn’t think of proceeding without a smartphone, iPad, or whatever global, technological wonder will be available five to seven years hence.

In any case, information technology will likely be the make-or-break factor separating competitive providers from those who merely hang on. IT makes all other industry-wide developments possible: faster, more widespread adoption of electronic or personal health records and keeping the customer king, among the vital ones.

IT is not the cure-all or the end-all, but ,unquestionably, it will be the foundation upon which the future of health care and hospitals sit. The coming few years in U.S. health care will prove to be a time of innovation and experimentation matched by frustration and exasperation, ultimately leading to transformation. Progress is likely to be spotty because of the enormity of the task.

Two steps forward, one step back will be the norm rather than any uninterrupted progression. Trial and tribulation leading to resolution and exaltation is predictable.

Article Perspectives and Insights

  • Forward-thinking leadership is vital to meet the challenges of the consumer driven health care; Nothing less will do.
  • Paying attention to the consumers preferences, stratified by generation or age serves as a blueprint for meeting the needs of large patient segments.
  • It will be years before vital measures such as accelerated cost-cutting and operational reform make a notable impact on a hospital’s profitability.
  • The aging of the population along increased expectations across-the-board as to what health care can provide will profoundly impact the industry.
  • IT and how you employ will be the make-or-break factor for your hospital in the coming decade.


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