Walking Away From Where We've Been: The Emerging Healthcare Ecosystem

We live in the age of two-sided markets. The fastest growing and most valuable companies on the planet are changing the way we experience commerce, access services, and buy products. Transportation is at our fingertips with Uber and Lyft, lodging with Airbnb, products and services with Amazon and Amazon Prime, pharmaceuticals with Blinkhealth and RxSpark, and now healthcare services with Slingshot Health. 

We also live in the age of acquisition and integration. CVS Health acquiring Aetna, United Health eyeing Davita Medical Group, Walmart in talks with Humana. Moreover, the list goes on and on: Apple, Google, JP Morgan, and Berkshire Hathaway. We can gain great insight by studying and learning from these strategic moves. Insight can also be gained by being curious about what's missing from the daily headlines. In the investment and strategic partnerships that capture headlines, there is a glaring absence — hospitals: health systems and hospitals. In the emerging healthcare ecosystem, the complexity, cost structure, and diminishing volume of inpatient care are leading hospitals and the systems that own them to a place of a commodity. Commoditizing these entities will be a longer-term reality, but the direction is clear. In an April 2018 publication of Kaufman Hall, Kenneth Kaufman writes:

"The strategic path of these new entrants appears to be toward commoditizing hospitals, which would be a very bad place for hospitals to be."

In the December 2018 Becker's Hospital CFO Report, Fitch ratings proposed maintaining a negative sector outlook for hospitals and health systems in 2019. The outlook reflects Fitch's expectation with the following prediction:

"Provider organizations will continue struggling with operational weaknesses amid a challenging healthcare environment." 

A vital ingredient of this challenging healthcare environment is the evolving healthcare consumer. In late 2018, Deloitte released its study on findings from the Deloitte 2018 Healthcare Consumer Survey. They identified critical touchpoints important to consumers: searching for care (convenience and price transparency), using new channels of care (apps, virtual care, and health coaching), and willingness to share personal health data to improve care and overall health. 

Those who will win in the emerging healthcare marketplace will begin with a relentless pursuit of creating "on-ramps" or "doorways" to their healthcare ecosystem. These doorways will be responsive to consumers searching for care and will offer entry into a healthcare ecosystem with attributes reflective of other proven marketplace experiences. Best practice healthcare marketplace offerings will provide the following features:

• Delight in Design: ease of use, virtual, simple, beautiful - available 24/7/365
• Transparent Pricing: access to immediate pricing and ability to influence pricing
• Customer Driven: patient-focused and supplier responsive; the relentless pursuit of a better experience for both sides of the marketplace
• Ease in Payment: an immediate transaction (on customer terms) resulting in immediate payment to the provider
• Constant Feedback Loops: continuous improvement of both patient and provider experience through real-time, actionable feedback
• Data Rich: capturing data at all points within the ecosystem and leveraging data to improve patient experience, patient outcomes, provider experience, and economic viability

To remain relevant, hospitals and health systems must move from the legacy model of geographic markets, bricks and mortar, and closed-loop networks to a new paradigm of on-ramps, virtual doorways, care channels, data translation, and a fluid, two-sided healthcare ecosystem. 

Not only are consumers interested in this evolving marketplace, so is our government. In August 2018 the Centers for Medicaid and Medicare Innovation (CMMI) released a request for information seeking "detailed information from organizations with experience with transmittal and storage of health care supplier information; personally identifiable information (PII); protected health information (PHI); health care price comparison data; and bid/auction data for health care procedures. We are seeking information from organizations with specific experience in health care price comparisons and on-line bidding for health care services and procedures between consumers and healthcare providers/suppliers." The emerging healthcare marketplace is coming and it is coming fast.

Here are a few comparisons that reflect a shift from "how we've won " to embracing the reality of "how we will win":

The emerging healthcare ecosystem will be transformative for both patient and provider experience. As this marketplace evolves, it will also transform structures, our approach to systems, and realign those we acknowledge as winners and losers. It will change everything about how we design healthcare, create access to healthcare, and pay for healthcare.  For those in the health industry sector, the opportunity is substantial and the challenge real. It seems appropriate to share a closing thought from a trusted and well-known source of wisdom; Winnie The Pooh. 

"I always get to where I'm going by walking away from where I've been."

With joy, wonder, and hope, its important to celebrate where we are and where we've been. In our celebrating, however, we should not linger too long. To move forward requires a walking away of sorts. An embracing of uncertainty, experiment, and risk. A purposeful posture of trusting those with whom we travel; a collaborative stepping into the unknown.

A vibrant, delightful, always accessible and always responsive healthcare marketplace is ours to create. Let's go.