One of the only constants in healthcare is change. It’s an industry that shifts rapidly, leaving savvy industry leaders working to shift their strategies with it.
Consider nontraditional healthcare players and the impact they’re having on prominent health organizations. While Dollar General may be your patients’ variety store of choice today, its recent introduction of trial primary care clinics may mean the future of healthcare access for millions of Americans who live within a five-mile radius of a Dollar General branch. In fact, a 2022 Bain & Company report predicted that nontraditional healthcare players could capture up to 30% of the total market share in less than a decade.
Whether it’s nontraditional players or traditional competition, the pressure seems to come from all sides. In an industry buffeted by a global pandemic, facing constant cybersecurity risks and grappling with financial turmoil, here are five areas of focus to help you face healthcare’s future with confidence.
01. Protect your revenue with a managed care strategy
02. Make sure direct EMR access for payors benefits providers
03. Build a proactive cybersecurity strategy
04. Focus on the practical uses of AI in healthcare
05. Look for private equity/health system partnership opportunities
Protect your revenue with a managed care strategy
- Know your data + go in with an ask. Analyze your payors for performance and parity against others. Avoid relying on price transparency data only as other providers could be accepting sub-par contracts that won’t work for your system.
- Plan for adequate + ample communication. You can’t solve every concern in one message, so know your audiences and plan specific messages for each. Keep channels of communication in mind as you develop talk tracks. Educate patients on the reality and implications of providers going out of network with their insurance plan, and what that means for the care they can access. Establish patient call centers to answer any questions and ensure patients know how to receive covered care.
- Assume everything you write will become public. Prepare escalation letters and payor correspondence with the assumption that they’ll be shared with the media. Leverage every opportunity to reinforce your story and your strategy — always reiterate why renegotiation is critical for your organization and your patients. Don’t create an opportunity for negative publicity by writing something that can be taken out of context.
- Be prepared to be out of network. Eleventh-hour negotiating is the new norm. Keep all stakeholders engaged and informed during the process. Deploy rigorous project management techniques to keep everyone aligned and to ready the organization for the impact of being out of network.
- Don’t give your EMR data away for free. Your electronic medical record data is one of your organization’s most valuable assets and payors are willing to pay a high price for access.
- Bring the right subject matter experts to the table. Establish key players from the outset. RCM leaders, managed care leaders, an Epic or EMR liaison, stakeholders from IT or Compliance, representatives from the payor — each of these entities might have reason to be included in discussions about direct payor access to your EMR. Empower the voices you want to hear in order to ensure that your interests are equally represented.
- Make sure EMR access agreements are mutually beneficial for providers and payors. Before providing access, ensure there are clear terms designed to drive value for providers. Consider eliminating request-for-information denials, moving to real-time prior authorizations and sharing payor cost savings from efficiency gains.
- Don’t assume healthcare is immune from the worsening risk environment. Geopolitical, intelligence, criminal and cybersecurity risks continue to rise as the world becomes more complex. Because healthcare organizations have vital assets like money, know-how, technology and data, these organizations will likely be increasingly targeted via cyber intrusion, insider exploitation, facility entry or a combination thereof.
- Know that healthcare executives are at risk, not just organizations. Healthcare organizations have long been ransomware targets, as they often can’t afford to be offline due to the critical services they provide. Now, to ensure a ransomware payout, threat actors are increasingly targeting healthcare executives on their personal devices and using deep research to focus on personal aspects of their lives.
- Make knowledge a priority. Too often, cybersecurity has been viewed as an IT issue, but effectively securing an organization against cyber threats requires engagement across the entire executive team — not just CISOs. All executives should regularly participate in risk management exercises and be prepared with actionable strategies to reduce the threat impact on their personnel, operations and technology.
- Weigh the value of a periodic risk assessment conducted by an outside firm. It’s difficult for in-house risk management and security personnel to regularly, comprehensively and objectively assess the strengths and vulnerabilities of their own organization’s risk management efforts.
- Don’t be distracted by the hype. Automation isn’t new — from text-based scripts to Excel macros, visual basic to bulk adjustments or rules engines, healthcare has long relied on automated processes.
- Don’t automatically assume “Artificial Intelligence” is good. Just because a tool utilizes AI does not mean that it will have a revolutionary impact — or even a positive one. Writing for machine learning isn’t difficult, and there aren’t always great yields.
- Consider what matters. The biggest factors that impact applied AI’s success are the composition of underlying datasets and the training that goes into results. The usefulness of AI results will only be as strong as the components it’s built upon.
- Embrace the possibilities. Increased computing power has unleashed large language model training, providing full visibility and accessibility into AI rather than treating it as “black box” technology. Industries can now fully leverage unstructured data, which makes up 80% of healthcare data. Generative AI also represents a major step, creating new output from prompts or existing data.
- Know the practical applications of AI. Natural language processing and generative AI offer the chance to quickly analyze large datasets, use predictive machine learning and answer critical questions.
- Understand AI’s impact on the revenue cycle. AI can help align incentives, boost interoperability and ensure or track adherence to agreed-upon standards.
- Consider a partnered investment with a path to full ownership. This structure offers two related options: a Joint Venture, where health system assets are combined with a private equity-backed company, or Co-Investment, where the two entities jointly acquire a strategic but potentially sub-scale asset with the health system and private equity (PE) firm both providing initial capital. Structure the transaction so there is a path to full ownership as the company scales and your health system’s priorities evolve.
- Monetize internally developed technology and capabilities. Carve out internally developed capabilities or technology as a standalone asset owned in part by a PE firm. In these situations, the health system will often remain a minority owner and commercial partner to continue benefitting from internally developed capabilities. This type of transaction allows your health system to focus on caring for patients and generates cash to invest in more strategic priorities.
- Co-invest with commercial relationships. Leverage both the health system‘s operational experience + industry relationships and the PE firm‘s experience growing businesses and executing on value creation/M+A to build a best-in-class company. Invest for profit and then use the proceeds to invest in your health system‘s most strategic priorities.