Six Trends that are Transforming the Healthcare Sector

McKinley Advisors (McKinley) holds the philosophy that associations should have a data-driven strategy. We believe that in order for associations to serve their mission they need to understand their internal environment (member needs, values, challenges and changes to the field) and the ecosystem their members operate in (external forces impacting the direction of their field or industry).
 
The American College of Cardiology (ACC) recognizes the importance of making data-informed decisions and brought on McKinley as an outside and objective partner to assist in gathering critical information about their field. Our team conducted an environmental scan of the healthcare sector. This work supported ACC in their strategic planning and helped them discover how to best navigate the increasing pace of change and disruption.

Patient Consumerism, technology, ambulatory care models, non-traditional competitors, COVID-19 trends and healthcare payment model shifts emerged as healthcare sector trends that will transform the industry. 

Uncover the key drivers and the effects of these trends on the healthcare landscape: 

Patient Consumerism

A shift in healthcare towards an overwhelming focus on the needs and wants of consumers is occurring. As patients continue to pay more out of their pockets for healthcare, they are demanding more choice and better service. At the same time, the healthcare landscape has become increasingly competitive and providers are meeting this challenge by focusing on patient experience. Patient demand is driving a need for more convenience, access and transparency in healthcare services.

Key Drivers

General trend in consumers demanding greater choice and better experience	Massive shift in retail towards convenience and experience	Higher out-of-pocket costs for healthcare result in greater patient demands	Consolidation in healthcare

What does this mean for the healthcare landscape?

• Providers should evolve their management philosophy and practices to reflect a patient-first outlook, including new policies and training for staff.
• Practices will need to ensure economically-sound distribution of services — for example, through employing APPs (advanced practice providers such as a physician assistant or nurse practitioner).
• Providers will need to manage their brand reputation.
• Practices may hire staff outside of healthcare from industries that have played a leading role in providing consumer-centric services.

Technology

A combination of technology trends that started to take hold before COVID-19 are now poised to expand due to massive investments, advances in related sectors (such as artificial intelligence), increasing comfort with technology (mobile phones, telehealth), and greater demands for excellence in customer service.

Key Drivers

Existing challenges in healthcare that may be managed through technology solutions	Advancement in general technologies (e.g., AI) that have applications in healthcare	Push towards patient-driven consumerism and improving the “patient experience”	Societal changes through COVID-19 that have made patients, providers, payors, and others more comfortable with technologies

What does this mean for healthcare providers?

• Providers will need to make investments in IT systems and hire vendors to offer great, competitive patient experiences.
• They will need to assess their technological maturity against new and developing technologies and make appropriate investments.
• Providers will need to understand the landscape of new technologies and how to develop the right process for identifying, prioritizing and incorporating them into practices and business models.
• Providers will need to assess the application of technology across a wide range of functional areas, including the patient experience (marketing and intake to delivery and follow-up), public perceptions and image of the practice, administration and healthcare delivery.

Ambulatory care models

The ambulatory care models trend reflects a push to relocate healthcare delivery to the backyard of the patient, including moving many procedures to outpatient facilities, telehealth and even big-box retailers. With the large uptick in telehealth appointments fueled by COVID-19, providers, patients and payers have become more comfortable with telemedicine. Drivers of this trend include a comfort with telemedicine, along with patients’ desire for convenient care/patient consumerism, a movement of clients out of cities into suburbs and rural locations, and the need to contain healthcare costs. 

Key Drivers

Convenient care	Comfort with telemedicine	Movement of population
More procedures at outpatient facilities	Expansion of big-box retailers	Containing healthcare costs

What are the implications for the healthcare landscape?

• Hospitals may need to increasingly shift all but the most intensive services to the community (outpatient facilities, telemedicine).
• Providers will need to continue or start facilitating and synergizing telehealth and telemedicine.
• There may be implications on the distribution of services, such as increased use of APPs to deliver virtual services.
• There may be greater incentive to continue developing partnerships between big-box retailers and traditional providers of healthcare.

Non-Traditional Competitors

As related to previous trends covered, non-traditional competitors are impacting the healthcare landscape. Big-box retailers have identified healthcare as a successful part of their business model, providing convenient testing, clinics, refilling prescriptions and more. Healthcare provider consolidation has resulted in larger health systems with more economies of scale and leverage. Large technology companies are serving and expanding in the healthcare area. They provide wearable health trackers, health records tools, COVID-19 vaccine support and more.

Key Drivers

Big-box retailers identifying healthcare is a successful part of their business model	Technology companies recognize demand for efficient services to support healthcare	Consolidation resulting in larger systems, payors and corporations with their own plans

What are the implications for the healthcare landscape?

• Disruptions to healthcare business models (the way services are purchased and priced), practice management and delivery.
• It may result in increased pressure to offer competitive and lower-cost options as transparency of pricing increases.
• This may result in increased opportunities for partnerships and the ability to support the healthcare workforce with advanced technologies and services.

COVID-19 Trends

Key healthcare trends related to the pandemic were two-fold: those related to advances in medicine and those related to workforce and labor. Massive infrastructure built around testing, rapid and repeated sequencing of the COVID-19 virus, genetics/genomics advances, public health infrastructure, and a blueprint for managing pandemics will result in many advances throughout medicine. 

In regard to the workforce and labor shortage trend, COVID-19 revealed inadequacies already inherent in healthcare, including too little focus on physical health, mental health, and burnout among staff, along with operations that run too lean with too little preparedness planning. There will be interest from both the preparedness perspective as well as the workforce recruitment/retention perspective on making human resources and operations more sustainable.

Key Drivers

Medical advancements delivery, healthcare management and administration	Workforce burnout and shortages	Shifting power to the workforce

What are the implications for the healthcare landscape?

• Adapting business models to place greater emphasis on:
  Workforce efficiency.
• Staff’s physical health, mental health, wellness and employee experience.
• Preparedness and the ability to onboard quickly.
• Relationships with the staffing pipeline, including fellowships and tech schools.
• Relationships with governments, such as how to respond quickly in a crisis when laws and regulations are restrictive.
• Advancement in medicine due to COVID-19 response, particularly in vaccine development and genomic sequencing.

Healthcare Payment Model Shift
 
Historical interest in value-based care models combined with rising healthcare costs, physician burn-out and increased access to care (such as through the ACA) all place increasing pressure on the movement towards value-based care models. 

The positive impacts could include a reduction in the overall cost of healthcare delivery, a greater focus on wellness, and a shift toward population-based care. A challenge may be the complexity of administering evolving delivery models. 

Key Drivers

Rising costs of healthcare in the U.S.	Growing interest in preventative medicine	Value-based care models

What are the implications for the healthcare landscape?

• Value-based models will continue to expand but may do so at an incremental pace.
• Over time, providers will be asked to shift the management of their services in unfamiliar ways, including potentially considering issues that are not typically in their scope.
• Value-based models bring a shift in how physicians are compensated, including meaningful incentives for the delivery of healthcare. A Deloitte publication suggests this may in turn lead to more flexibility in determining schedules.

Final Thoughts

Examining these key trends helps align ACC with the needs of its members and health system partners and positions the organization to continue supporting its members with meaningful resources.  This work will inform its ongoing strategic planning efforts to help refine and refresh its next set of goals. 

Learn More

Find out how your association could use an exploration of its industry’s macro trends to inform new possibilities in strategic decision-making during challenging times. Get in touch with our expert advisors.