Stephanie Kovalick

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The pace of change in healthcare is not slowing down; in fact, it is accelerating. Healthcare organizations that are most successful in 2019 will know what challenges and changes are coming down the pipeline, and they will prepare accordingly.

To help ensure you don’t get left behind, we’ve assembled the top six challenges the industry will face in 2019.

1. Shifting the focus from payment reform to delivery reform

. For the past few years, C-suite leaders at healthcare organizations have been focused on navigating healthcare payment reform-attempting to preserve, improve, and maintain revenue. Amidst those efforts, delivery reform has sometimes taken a back seat.

That will need to change in 2019. Organizations that are the most successful will focus more on patient care than revenue, and they will see improved outcomes and reduced costs as a result.

Many organizations are already exploring delivery reform with initiatives that focus on:

In 2019, however, they will need to bring 

of these initiatives together to implement sustainable improvements in how healthcare is delivered.

An added bonus? Organizations that accomplish this will see enhanced revenue streams as value-based reimbursement accelerates.

2. Wrestling with the evolving healthcare consumer.

 Healthcare consumers are demanding more convenient and more affordable care options. They expect the same level of customer service they receive from other retailers-from cost-estimation tools and online appointment booking to personalized interactions and fast and easy communication options such as text messaging and live chats.

Organizations that don’t deliver on these expectations will have a difficult time retaining patients and attracting new ones.

That’s not the only consumer-related challenge healthcare organizations will face. In 2019, millennials (

), will make up nearly a quarter of the U.S. population.

This generation doesn’t value physician-patient relationships as highly as previous generations. In fact, 

  do not have a personal relationship with their physician, according to a 2015 report by Salesforce.

Finding ways to maintain or increase the level of humanity and interaction with millennials will be a key challenge in 2019. 

 and other engagement tools will be critical to an organization’s success.

 Physician and nurse shortages will continue to intensify in 2019, creating significant operational and financial challenges for healthcare organizations.

 from the Association of American Medical Colleges predict a shortage of up to 120,000 physicians by 2030. On the nursing side, the 

 a need for 649,100 replacement nurses by 2024.

The implications of the shortages, combined with the fact that healthcare organizations face a number of new challenges in the coming years, are many. Fewer clinicians can lead to burnout, medical errors, poorer quality, and lower patient satisfaction.

Healthcare organizations that thrive amidst the shortages will find new ways to scale and leverage technology to streamline work flows and improve efficiencies.

. Despite the hype and hopes surrounding EHRs, many organizations have found that they are failing to deliver on their expectations.

 found that 64 percent of healthcare executives say EHRs have failed to deliver better population health management tools, and a large majority of providers are seeking third-party solutions outside their EHR for value-based care.

The survey of 100 executives also found that less than 25% believe their EHRs can deliver on core KLAS criteria for value.

, that statistic is striking, considering how important value-based care is and will continue to be to the industry.

Despite the dissatisfaction surrounding EHRs, switching EHRs may be a big mistake for healthcare organizations. A recent 

 found 47% of all health systems who replaced their EHRs are in the red over their replacements. A whopping 95% said they regret the decision to change systems.

Hospitals and physician may not be entirely happy with their EHR choices, but the best course may be to stick with their system. Highly successful hospitals and health systems will find ways to optimize workflow and patient care which may involve additional IT investments and best of breed investment approaches, rather than keeping all of the proverbial eggs in the EHR basket.

5. Dealing with nontraditional entrants and disruptors.

 In 2018, several new entrants entered and/or broadened their reach into healthcare.

Amazon acquired online pharmacy retailer PillPack

 JPMorgan Chase and Berkshire Hathaway to create a new healthcare partnership for their employees. Early in 2018, Apple announced it was 

 and Apple watch, and recently, Google 

 David Feinberg for a newly created role, head of the company’s many healthcare initiatives.

New partnerships have also arisen between traditional healthcare entities that could result in significant healthcare delivery changes. Cigna and Express Scripts 

received the go-ahead from the DOJ for their merger in September

, and CVS and Aetna formally announced the completion of their $70 billion merger November 28.

Read more about the top two ways the CVS-Aetna merger could change healthcare.

All of these new industry disruptors and mergers will impact healthcare organizations, likely creating new competition, disrupting traditional healthcare delivery mechanisms, creating price transparency and pressures, and fostering higher expectations from consumers in 2019. Keeping an eye on these potential disrupters will be important to ensuring sustained success in the long term.

6. Turning innovation into an opportunity

. From new diagnostic tests and machines to new devices and drug therapies-the past few years in healthcare have seen exciting and lifesaving developments for many patients. But these new devices and treatment approaches come with a cost.

One of biggest 2018 developments that best exemplifies the challenge between innovation and cost is 

y. This new cancer treatment is already saving lives, but it racks up to between $373,000 and $475,000 per treatment. When potential side effects and adverse events are accounted for, costs can reach more than $1 million per patient.

Finding the best way to incorporate new treatments like this one, while balancing outcomes, cost, and healthcare consumer demands, will be a top challenge for healthcare organizations in 2019.

Stephanie Kovalick is the chief strategy officer; general manager, strategy, at Sage Growth Partners (SGP). She is responsible for building SGP’s internal growth strategy as well as leading the strategy consulting team. She also has deep expertise in healthcare payment models and revenue cycle management. Contact her at: 

Articles

To help ensure your healthcare organization doesn’t get left behind, we’ve assembled the top six challenges the industry will face in 2019.

Top Six Healthcare Executive Challenges in 2019

It’s a deal that could reshape the healthcare industry as we know it: the combination of one of the country’s largest insurers and one of the country’s largest pharmacy chains.

CVS and Aetna formally announced the completion of their $70 billion merger November 28, but rumors surrounding the deal-and predictions regarding how it could impact healthcare-have been circulating since late 2017.

1. The merger could turn primary-care medicine as we know it on its head

My imagination is certainly running wild with the possibilities. Imagine MinuteClinic as the new primary-care option for patients insured through Aetna; more walk-in options for urgent and non-urgent events as Aetna’s influence over CVS Health’s offerings grows; and Target (whose clinics were 

 back in 2015) offering more healthcare-related services to shoppers, such as radiology units at the back of its stores. Why not take care of that MRI your doctor ordered while doing your grocery shopping?  

 the merger, CVS Health’s President and CEO Larry J. Merlo said the new company will build healthier communities through a more local, easier to use, and less expensive healthcare model.

I agree that expanding the healthcare presence in retail settings could make primary care more accessible, more convenient, and more affordable than ever. Time will tell, however, if these exciting possibilities come to fruition.

Potential CVS-Aetna merger: Key takeaways for health execs

Some industry groups, including the AMA, have 

 that the new company could decrease competition and increase costs. There are also fears that the combination could harm patient access and outcomes. If more Aetna patients are funneled to MinuteClinics, for example, it could jeopardize the important and long-term relationships many patients have with their primary-care doctors. 

I’ll be watching closely to see how this all pans out, but it’s certainly going to be a transformative time for primary care.

2. It will shift the role of health insurance in our everyday lives

This merger gives Aetna access to one of the largest retail clinic networks available. Not just access to it, but partnership with it and leverage within it. Employers seeking new ways to increase access, convenience, and affordability for their employees and their families will have entirely new options with the new CVS-Aetna model. It will shift the insurance landscape significantly for consumers.

The combined company could also help employers better align their wellness initiatives. As Bruce Carver, associate vice president of payer services at MedeAnalytics told 

 when news of the potential merger first broke, the combination 

 to better align their healthcare and pharmacy benefits. For example, allowing pharmacy benefits to incentivize people with chronic conditions to fill and adhere to their medication could reduce hospital admissions and readmissions. “An integrated insurer would be able to establish such incentives,” Carver told 

In the CVS-Aetna merger announcement, Merlo said the merger will fully integrate Aetna’s data with CVS Health’s data, which he said will improve patient engagement, wellness, and personalization.

I agree that the opportunity to more fully integrate medical care and pharma data through the partnership could impact patient care and costs and the role health insurance plays in our everyday lives. Again, it remains be seen how positive an impact this will have. 

Who knows how quickly the combined force of CVS-Aetna will shift models, access, and care delivery. In some surprising news after CVS and Aetna announced their combination, a U.S. District Court judge said he is considering delaying the merger, until he has a chance to weigh in. 

It’s unclear how this will affect the outcome of the merger as, according to a recent article in 

 antitrust experts say this type of move by a federal judge is unprecedented. A hearing will take place December 18, after which we should have more clarity.

One thing is for certain, regardless of how this all pans out. In the coming years, 

we will continue to see more healthcare M&A activity

 related to expanded services as opposed to mergers solely focused on consolidation and scale. As the value over volume shift accelerates, companies will take CVS and Aetna’s lead, seeking new partners that can help them succeed in providing a more well-rounded approach to patient care. 

I’d love to hear your perspective. Email me your thoughts: 

Stephanie Kovalick is the chief strategy officer; general manager, strategy, at 

 (SGP). She is responsible for building SGP’s internal growth strategy as well as leading the strategy consulting team. She also has deep expertise in healthcare payment models and revenue cycle management.

The combination of one of the country’s largest insurers and one of the country’s largest pharmacy chains will dramatically reshape the healthcare industry.

Stephanie Kovalick

Articles

Top Six Healthcare Executive Challenges in 2019

Opinion: Top Two Ways the CVS-Aetna Merger Will Shake Up Healthcare