In this episode, we are joined by Ferris Taylor, Executive Director of Healthcare Executive Group, to discuss their study of the top 10 challenges facing healthcare organizations in 2020.
Highlights of this episode include:
- Background on HCEG and their mission to provide a platform that promotes healthcare innovation.
- Why costs and transparency took the top spot in HCEG’s top 10 list.
- Why customer experience became a top issue and how technology is addressing the consumer’s journey in healthcare.
- How data and analytics have become important in facilitating the delivery care system transformation and other issues on the top 10 list.
- And more…
Mike Passanante: Hi, this is Mike Passanante. And welcome back to the award-winning Hospital Finance Podcast®. During the latest form of the Healthcare Executive Group, healthcare executives from payer-provider and healthcare technology organizations ranked the top 10 challenges and opportunities that they believe healthcare organizations will face in 2020. To talk us through these issues, I’m joined by Ferris Taylor, Executive Director of the Healthcare Executive Group. Ferris, welcome to the show.
Ferris Taylor: Well, thank you, Michael, and thanks to everyone that’s listening at this time. It’s always a challenge to look at the future and what’s coming. I love one of Yogi Berra’s quotes, it’s tough to make predictions, especially about the future, so this will be a good conversation, Michael.
Mike: Absolutely. I’m looking forward to it. And we’ll mention for the audience, this is the second time you’ve been on the show. We looked at the top 10 issues last year. And it was it was one of our best episodes. And so we’re happy. We’re happy to have you back on the show. Ferris, briefly for those who may not be familiar with your group, can you start out just tell us a little bit about your organization.
Ferris: I will and I’ll be brief. Anyone can find out more by going to hceg.org. But we’re in our 32nd year, going into our 32nd year. We were founded when a technology company, digital equipment, and many hospitals were running on their many computers and like that. They disbanded their healthcare users group. And basically that group of users said, “Wait a minute, we find value independent of the sponsor in networking, stepping back, being able to share perspectives on the issues and the challenges and the opportunities across the whole healthcare spectrum.” And so the organization really exists to facilitate that, that kind of exchange and dialogue and networking. We do a lot of webinars, have roundtable discussions and like that. But we exist to help bring action to critical issues across the healthcare ecosystem.
Mike: Thanks for that, Ferris. And as I mentioned, your group identifies the top 10 issues each year. And really just for sake of time, we’re going to focus on the top five here and at the end of the podcast we’ll give out the URL where our listeners can go and look at the entire list on your website. So why don’t we start out with issue number one, and that’s costs and transparency. What did the group had to say about that?
Ferris: Well, and I would love to have this be a live exchange with everybody that’s on the podcast. Because I think every one of us have a different perspective and yet recognize every single one of us that it isn’t a surprise that over the years this cost and transparency topic has come to the top of the list. And over the year or two years leading up to this, I go back to 2018, and costs and transparency was at the bottom moving up to the top. But I think we just recognize that the consumers, the employers are finding it more and more difficult to financially support the cost structure that we have in healthcare, but more importantly, what our group has been talking about or what are the strategies and the tactics that are needed to address to bring the synergies in the health care that have come into other segments in some of our lives, which delivers high-quality products and services at a reasonable cost or declining cost. And I don’t know if we’ll ever get in health care to declining costs, but we have to recognize across the medical and pharmaceutical side of our business and the administrative side of our business, that every stakeholder has a role that they have to play. Now, at the same time, because costs have continued to escalate, then it’s become a political issue. And we’re seeing regulations or discussions of regulations. Luckily, there’s a delay in some of the transparency requirements that are out there right now, but it doesn’t matter whether you’re a hospital, a provider, a physician, or a health plan. The overhead to be able to comply with what may not really solve the problem on cost and transparency.
Really, at the heart of this is – number two on that list as well – which is the consumer is becoming more and more active every year. And they want to understand. They want to have confidence. I heard stated by a colleague, the consumer just doesn’t really want to get screwed in this whole process. And yet, when you see media reports of surprise billings and you personally see it, every one of us would have some experience with getting a bill or seeing the billed rates or the billed charge for a medical condition and saying, “Oh my gosh. I think that cost and transparency is at the top of the list because all of our stakeholders, at least at the HealthCare Executive Group, if we don’t address cost and transparency, it really is going to be difficult to get to any of the other issues in the top five here on the HCEG list, or the top 10 or the top 15. Whatever you want to consider it, it becomes fundamental to everything that we’re doing.
Mike: Absolutely. And as you mentioned, number two on the list is consumer experience, closely related with cost and transparency. Because we’re looking at every interaction that a consumer has, whether it’s calling up to make an appointment or maybe making one online or on an app. Or maybe it’s how your bill is presented to you, ultimately. So it’s not confined to any one part of a hospital or a physician practice. It’s really throughout the entire continuum, right?
Ferris: Exactly. And you said it very, very well. And the label on each of these top 10 or top 5 is always a struggle. Because it’s consumerism, it’s a consumer experience. It’s really the consumer’s journey, as you described it, from the point that, “I need to see a doctor. How do I find the right doctor? How do I get an appointment with the doctor that’s appropriate for me? How do I get the information to that doctor or hospital that might need that information? And then as I engage and go to the appointments or have the surgery, how do I follow up?” How can it be easy, convenient, timely, streamlined, cohesive? I can put a lot of words around that. Personally, Michael – I step back at this. And speaking to your listeners, we know that we have done a lot of things that have made it very difficult for the physicians and the healthcare providers. If you don’t fit into their workflow, it just isn’t going to happen, or it’s going to happen at a huge cost with a lot of disruption. And I think we need to, each one of us, step back because we’re all consumers of health and care in some way and think about what would naturally fit into the life flow of an individual. And whether you’re a diabetic, so the healthcare system is great at jumping on top of the fact that you have diabetes and you need to engage with me, and this is what you need to do and that’s what you need to do. And suddenly, diabetes takes over the life of that individual when in fact, that individual is a parent, they’re a neighbor, they’re a son or daughter to their parents and maybe a grandparent. They have a life. They have a social life. They have a work life and they have a medical condition.
But the discussion around the consumer experience really came to head as these top 10 issues over the years have started fitting together into– we’ve got technology out there. We’ve now got a resource of data that we didn’t have before. We’ve broadened the definition of data from just the medical data to include what I call the barriers to health, which are social determinants of health. But it’s really the barriers to health in terms of transportation and housing and food and heat in the home and like that. We have to look at the total consumer experience with healthcare. And I will say even though it’s not a top 10 issue this year. If we don’t look at that as the incumbents in healthcare, there’s a lot of technology companies and organizations outside of healthcare. They’re looking at a $3.6 trillion industry and saying, “You know what, we have high consumer satisfaction. We’re easy to work with. Our consumers love us, and we can do healthcare.”
So I think it’s good to have the Amazons and the Apples and the Googles in the technology world looking at healthcare because it will make us be better. And one of the places that we will be better and need to be better is in understanding and addressing and assuring that every consumer interaction is the type of interaction that we personally would want to have. That’s our measuring stick number 2 on the top 10, I think.
Mike: I could not agree more, Ferris. Very comprehensive thoughts on that topic. Why don’t we move on to number three? And while it seems a little bit different than maybe the first two, it’s still is tied in, and that’s delivery system transformation.
Ferris: And it’s a big topic. And actually, Michael, if you look back – and listeners can do that at their own over the 10 or 15 years of top 10 lists that we’ve been putting out there as HCEG – this is a combination of issues that are coming to a head. You don’t see here directly value-based reimbursement. Also, although further down in the list is, what is the payment model that needs to be there? But the payment model is going to require us to do business differently. It is operationalizing and scaling the integration of the silos that we have in healthcare. I know when I moved after a dozen years of being an executive in a health plan and moved to the hospital side for a couple years as a C-Suite executive on the hospital side. It stunned me at how different the problems looked when I was sitting in the hospital board room with my friends and colleagues that I’d worked with, and trying to have a conversation about solutions, as opposed to negotiating another dime out of a CPT code or something like that. We need to think about– we can go back to where I started in healthcare, I was fortunate to start in the mid-80s in a staff model HMO at Harvard Community Health Plan. And the doctors were all part of the organization, as was I. We were closed network. It was fully integrated, everything was smooth, we worked as a team. I think this delivery transformation discussion is really about bringing the medical, the non-medical, the collaborations, the partnerships that are needed across the spectrum of what we traditionally have called healthcare, and what we, in the past, have considered outside of healthcare. But bringing that all into an integrated, seamless solution that works for all the stakeholders. And, as I said when we were talking about number two, Michael, it’s becoming critical that we have this transformation be focused on the consumer. And we all know that in the past, it was primarily the employer that paid the premiums, the consumers disengaged, it was the government with Medicaid and Medicare.
My thesis and my summary on this one is that that is changing. And I have a quote that I use from Michael Crichton’s Lost World book; extinction’s an inevitable result of one of two things, too much change or not enough change. And this issue was on the top five list, Michael, because if we’re not changing, we’re not going to be here in five years. So the whole structure of the system needs to be re-looked at, not necessarily rebuilt, but I think we need to behave differently as stakeholders in healthcare and how we coordinate and cooperate a partner for the benefit of the consumer and the employer and the member themselves, or the patient.
Mike: And speaking of behaving differently, I think number four on the list really speaks to that, and that’s data and analytics, kind of a behemoth topic when you think about it. But something that’s just becoming critically important in order to be able to facilitate the delivery care system transformation and really all the other items on the list.
Ferris: Couldn’t have said it better in terms of its importance. If I could diagram these top ten, Michael, I think this data and analytics is an all-encompassing as a circle that covers all of them because there isn’t a single issue that we’re trying to address. We’re sitting here today – just think about it, versus five years ago or ten years ago. Ten years ago, most all of our health data was right behind that reception’s desk in the physician’s office in those manila folders. And it was just a wall of folders. Now, the ARA funding, the stimulus package, and the HITECH Act, and the Affordable Care Act –has moved the data into a more accessible and usable format, and at the same time when you think about the computer power of– we’re talking here on a phone. I don’t know about you but I’m actually on a cell phone, and I have more computer power on this cell phone than Apollo 11 had when they went to the moon. That data set and the technology, the analytics, the augmented analytics, the augmented intelligence, I try to stay away from artificial intelligence because it’s really not artificial, it’s just leveraging advanced analytics in the new sources of data. Not just structured data, claims data, but clinical data and non-standard text data, unstructured labs and prescriptions and we’ve got consumers now that have mobile devices, they have Fitbits and like that, that– all of that data along with social demographic data and genomics is coming together to improve the health outcomes and to reduce the administrative burdens that all of us are suffering from in health care. But especially your audience in the hospitals and in the health plans. We’ve got to support that transition from volume to value and facilitate individual suppliers and payers in being effective at solving and contributing to improved life and well-being with the communities we interact with. So I really do put this data and analytics– and if you go back a couple years, Michael, it was on the top of the list. It isn’t that it’s necessarily fallen in importance. It really has become all-encompassing, and it affects the three that we’ve talked about in terms of the consumer experience and cost transparency and delivery system transformation, but it also affects a number of those on down the list of the HCEG top ten.
Mike: And rounding out the top five on the list, which is I would say a closely related topic, is interoperability and consumer data access.
Ferris: And I would say, and we were struggling labeling this, for years interoperability has been a word out in the health care system and systems interoperability because of legacy systems, and every health plan, every hospital, every physicians’ group has a little different infrastructure in their back office in the technology that you’re using. I think the interoperability part of number five, Michael, is really saying that there’s a new type of interoperability and that interoperability is more data liquidity. If we can’t have systems work together at least we can have the data flow more smoothly and more seamlessly than it flows right now. But this also came onto this list with the announcements last – if I remember rightly – January, early February, from CMS putting their– and they’d spent billions of dollars on interoperability as a topic but putting their support behind open-source platforms and APIs, I like to say that this topic– got on FHIR but F-H-I-R as opposed to a burning fire that really, and again it kind of ties back to that consumer experience, but really what this is heading towards is integrating and improving that exchange of member and payer and patient and provider and everything else data in a way that brings value to the stakeholders and especially to the consumer. Healthcare is still not close enough to being real time. I could go all the way back up to the top and talk about transparency and the fact that just having a hospital publish their negotiated rates on 300 codes isn’t going to solve any of the real problems. What the patient or the consumer wants to know when they walk into the hospital is where am I at on my deductible, what am I going to pay for, is the full team going to be part of my network, do I have to ask if the anesthesiologist is moonlighting and outside of the network and I’m going to get a bill on that. We want all of that to be as close to real time as possible and to be cost-effective. And in my mind, for it to be cost-effective, it really needs to be digital.
I could step back a bit and we could talk on another podcast more about this but I think healthcare is in the process of moving from an industrial age to a digital age. And part of that transformation, part of that transition, is in the industrial age, and it doesn’t matter what the industry was, it was all part of efficiency. It was Adam Smith, division of labor and get all of the parts doing their part just as efficiently as they could and as cost-effectively as they could. And that created an environment of almost command and control. And in some ways, at the heart of our healthcare system, our transaction is simple. It’s a doctor and patient behind a closed door or in an operating room. That’s a simple transaction. But we’ve put all of this other stuff around it. And, in fact, if we can’t move to a digital age where that flows electronically and the right data and the right information, the right tools, the right resources are at the physician or the surgeon’s hands and in the hospital to be able to, in a cost-effective way, address the medical condition that needs to be addressed – if we can’t do that – we are going to fail.
Now on the other side, I’m very optimistic, Michael. Some of these issues when you talk about them they seem to sound like we’re being critical of where we’re at. I have a reason to be very optimistic. I think that 20 years ago, the Crossing the Chasm and the studies that said 30 to 50 percent of the healthcare spend was waste and duplication, more recently that number’s down to 20, 25 percent – it’s much less – we’re getting better at this. But I think it’s incumbent upon every single stakeholder in healthcare to step back and every decision that we make ask ourselves the question, is this in the best benefit of the– I would broaden it from consumer or patient or whatever it is, is it the best of interest of every American that we have. And if we take that broader view then the political discussions come into focus very differently, the difficulties in working together take a very different perspective. I happen to have 13 grandchildren and over Thanksgiving, I got the opportunity to go Frozen 2 twice and there’s a line in there where the heroine, Ana, says, “At that moment in time, what is the next best right decision that I can make.” And I think all 5 of these Top 10 things really have opportunities for every one of us as stakeholders to say, “In this moment, what is the next right thing that I can do that would be the best thing for Americans across the country.” If we have that as a measuring stick, then these 5 and all the other Top 10s that we’ve talked about over the years, Michael, will come together into solutions that will really allow us to be healthy, wealthy and wise. So that, I guess, is the summary of my message on the Top 10, unless you picked something else up from the conversation.
Mike: All well said, Ferris. And we’ve really only scratched the surface just going through the Top 5. But for those in our audience who’d like to read about the entire list for your Top 10 as well as previous years’ Top 10s, where can they go?
Ferris: They can go to hceg.org and at the top of the menu is a Top 10 and it’ll show the 2020 list along with each of the years prior to that. And there we have white papers. We have different resources. HCEG exists just to help facilitate these discussions, number one. But these discussions take us to action which is why I really wanted to issue that challenge for all of us to look at what we’re doing. It’ll be the little things. It won’t be great big things that change healthcare. It’ll be the little things that each of us do with respect to these Top 5 in our day-to-day lives that will make healthcare better for all of us. So with that, I wish everybody a happy holiday season and the best of success in 2020. We may be all wet by the time we get through 2020 on these Top 5 but I think, Michael, it’s a good place to start.
Mike: Well, it’s always a pleasure talking with you, Ferris. And thanks again for bringing your insights to the Hospital Finance Podcast today.
Ferris: Appreciate it and have a good day.