Point of View Emergence of the smart hospital and beyond
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1 Point of View Emergence of the smart hospital and beyond What s next for providers?
2 Hospitals, physicians and other healthcare providers are at the forefront of almost every healthcare intervention, taking care of everything from day-to-day chronic conditions to emergencies and life-threatening illnesses. Over the past century, as local community needs have changed and grown, hospitals have responded by expanding their size and services to meet those needs. However, technology advances and changing patient expectations have led to new consumer-oriented healthcare services, causing many hospitals to rethink and, in some cases, reduce their size and services. Today, many big healthcare systems are starting to move care out of the hospital and into the home, for example, by automating routine services and providing remote monitoring and telemedicine. As pressure mounts to reduce costs and improve patient outcomes, health systems are also experimenting with creating new revenuegenerating verticals, such as commercial genomics, big data and digital health startups, as well as pursuing direct-contract relationships with local employers. But what is the next step in this evolution? A review of the recent history of provider investment in technology, along with recent trends, may offer a path to discover future models. Stage 1: The digital hospital ( ) When the concept of the digital hospital first emerged, the main goal was to move all hospitals and physician practices from paper-based systems and processes to electronic health records (EHRs) and shift clinical and back-office processes to these systems. The Office of the National Coordinator for Health Information Technology (ONC-HIT) was established in 2004 with the explicit goal of widespread deployment of health IT. The main focus of EHR companies at the time was to combine electronic scheduling and billing with EHRs to increase efficiency in the back office. Billing was based on the fee-for-service model, using loosely standardized claims to multiple payer organizations and the government, as well as including a certain percentage of uninsured and/ or uncompensated care. Care was still delivered through hospitals and offices, and was not designed for patient or provider convenience. Then the economic crisis of led to a capital crunch for hospitals, making it more difficult to finance technology investments and operational changes for new services, and delaying the overall implementation of EHRs and other technology-based health services. 2
3 Stage 2: The smart hospital (2007 present) As the health community s acceptance of EHRs increased and hospitals began to reinvest in technology, many started to see the possibilities flowing from the massive amount of clinical and financial data being generated. EHR adoption increased exponentially after enactment of the Health Information Technology for Economic and Clinical Health (HITECH) Act of 2009, which allowed the ONC to give incentive payments for transitioning and training to a specific level of use ( meaningful use ) over several years. The Triple Aim concept, developed by the Institute for Healthcare Improvement around , summarized the goals of any healthcare organization (or integrator ) as having the responsibility of improving the care experience and the health of populations and reducing the per-capita cost of healthcare. 1 With the advent of the Affordable Care Act and the shift to value-based care, new risk-sharing arrangements were formed, where clinical outcomes as well as cost savings were determined to be the requirements for reimbursement. Hospitals and physician groups began merging, creating standalone provider groups with the idea of improving cost management and standardization within a combined group. The smart hospital aims to balance clinical outcome excellence, operational/ supply chain efficiency and strong patient/provider experiences using technology. It encompasses and overlaps other constructs, such as the continuous learning healthcare system, connected care and other technology-enabled care paradigms that extend the reach of hospitals beyond their four walls. Underlying the smart hospital concept is the ability to take data collected through claims, EHRs, wearable devices and unstructured data (such as social media) and perform robust analytics on this information. By adopting the smart hospital, providers are essentially offering healthcare as a service, creating new, blended services using digital mobile technologies, existing services and analytics to bundle consumer-friendly health services with differential pricing and the optimized use of healthcare professionals in each offering. This combination has been referred to as high tech, high touch. 2 To allow for all of this, providers must change their fixed costs both front- and backend into variable costs. 3 The smart hospital concept encompasses several elements, including: Patient experience. Patients can navigate the system using a combination of digital and human services that extend outside the hospital. Beyond simply extending the EHR, the entire patient experience in the health system ensures that patients get the proper, affordable level of care at the right time. 3
4 New workplace models. Provider workflows must also change and be optimized around the patient while allowing for workforce flexibility. Doctors, nurses and other healthcare professionals can and should deliver care beyond the four walls of the hospital. Digital workflow solutions should lead to greater job satisfaction and retention, as well as a stronger provider patient relationship. Provider patient collaboration. With a growing commitment to their own care, patients work with an entire care team, not just a doctor or nurse, and contribute to building and improving their health. Providers start to recognize patients as partners, not just customers, and work together toward shared incentives in valuebased care. Population health management. This is a data-driven approach to costeffectively managing the health outcomes of a specific pool of patients. Supply chain management using radio frequency identification (RFID)/realtime location system (RTLS). Automated/remote tracking of medical devices, materials and predicted inventory needs to optimize control and reduce costs. Home monitoring/remote care. Bluetooth-enabled devices, a U.S. Food and Drug Administration (FDA)-approved mobile app and telemedicine solutions as well as patient-generated health data allow for low-acuity care delivered at lower cost and lower risk. Home monitoring requires a strategy that leverages platforms with variable costs, such as cloud and a consumption-based model, and this will require a significant shift in how devices are procured, deployed and managed. The development of monitoring command centers lets doctors and nurses monitor patients in the hospital and remotely. Focused hospitals/micro-hospitals. Smaller, more focused centers of excellence are designed around patient flow and focused on key revenue-generating areas (e.g., cardiology, oncology). Leveraging highly specialized data used for analytics, departments can be colocated around workflow, realizing improved process flow and ultimately cost efficiencies. Similarly, micro-hospitals, smallscale inpatient facilities, typically with emergency medical care, labs, imaging, pharmacy services, etc., are put in to fill gaps in markets that can t support larger hospitals. Data for analytics and efficiencies is also necessary for such facilities to function. 4
5 Data life-cycle management. As new digital health technologies and remote monitoring devices, as well as new regulations, become available, the provider must have a standard approach to handling these new data streams and determining whether and how they fit into the data pipeline. Seamless access to this data has become important because it s the source of all data flowing into analytics, which the smart hospital and its services are built on. Moreover, once data has been collected, it s a permanent asset. The data must be used or stored for future use, and handled with care to avoid violating relevant privacy statutes. Security. Often an afterthought in the past, security has become part of the design of all processes as the system is built. Access controls, encryption, governance and monitoring must scale up as connected devices send in data from outside the four walls of the hospital. Cyber security measures and contingency planning are developed to combat ransomware and cyber attacks. As one would expect, for many providers, the smart hospital stage is a work in progress. Many struggle with managing financial risk, although recent surveys suggest they are more willing and able to take on financial risk. 4 Interoperability, data gathering and storage, and data governance have received woefully little investment, since most of the focus has been on front-end analytics. And many organizations have not structured effective change management to include physicians, nurses and other care practitioners in reviewing data and preparing for process change. Instead, much of the change has been forced on the practitioners, which has had a negative effect on job satisfaction. Stage 3: What s next? The next stage should be a learning healthcare system, in which science, informatics, incentives and culture are aligned for continuous improvement and innovation. In such a system, best practices are seamlessly embedded in the delivery process and new knowledge captured as an integral byproduct of the delivery experience. Providers are becoming data companies, offering services to improve the health of their patients. Indeed, providers are entertaining new revenue streams, such as creating genomic libraries based on pathology specimens to test new business models and continue to fund innovation. Providers will need to manage business model change along with implementing new technologies. According to IDC, this will require delivering a new business model, new governance and a new organization supported by new technology. 5 There s still much uncertainty about the course this stage will take as the traditional lines between different stakeholders blur. Today, payers are purchasing providers and each other, pharmacy benefit managers are purchasing payers, and providers are banding together to create generic pharmaceutical companies. CVS announced its intent to acquire Aetna, combining it with its 9,700 retail locations and 1,100 clinics at this time to become the new trusted front door to healthcare in the U.S. 6 Moreover, now even nontraditional players such as social networks and online purchasing sites are circling healthcare with the same goals in mind, and with much more experience in customer engagement; healthcare companies have always lagged other traditional companies by about a decade with regard to investing in customer/patient engagement and innovation, focusing more on business process and recordkeeping. 7 5
6 For example, in recent news: Amazon announced a joint venture with JPMorgan Chase and Berkshire Hathaway to create an organization free from profit-making incentives that will costeffectively manage employee health and satisfaction. 8 Apple recently announced it is hiring doctors to work in its new AC Wellness clinics, independent medical practices that provide healthcare to Apple employees. 9 This, in combination with their newly released Health Records app, gives Apple the pieces to build a better customer experience in healthcare. Verily, which is Alphabet s health arm, is offering to enter population health or care management insurance by offering a payer (government, employer or private insurance) to reduce costs and assume some of the financial risk. 10 The objectives of this flurry of activity are the same: create an access point to patients using existing core competencies, acquire more data on patients, create revenue streams and maintain market dominance. However, this puts all these new players at odds with traditional providers. So where should providers invest to build their services? How can they improve their patient engagement and still stay nimble enough to respond to new players entering their market? We suggest that providers consider a direct approach while building up to this stage that of partnering with their patients to collect and control access to the patients personal health data. The patient empowerment movement has its roots in evaluations of the original physician/patient relationship, which used to be a paternalistic model with physicians (and hospitals) in charge. Over the past 30 years, this model has slowly shifted to a more collaborative approach, with more information and decisionmaking power shifting to the patient. In 2007, the first iphone was released, and the quantified self movement was born, allowing motivated individuals to track themselves using mobile health devices and to understand their data, sometimes better than their providers did. Fast-forward to 2018: With the passage of the Tax Cuts and Jobs Act, patients will take on more financial responsibility for their healthcare expenses. Patients will need a trustworthy partner that has complementary business needs one that can create financial and value-based incentives to maintain and improve their health, as well as actively participate in collecting additional longitudinal health data. Some examples of the types of patient-centered services providers may be able to offer at this stage of evolution include: Provider-branded health navigator. Using geolocation data and digital health apps to nudge patients and suggest better health and wellness choices, as well as connect to a human advisor when needed Patient registry. Creating registries with automated participation to conduct realtime care process evaluation, as well as recruitment for clinical trials Healthcare marketplaces. Bundled services, local and otherwise, that let patients see outcomes ratings and pricing to determine what fits best within their budgets Reduced payer costs. Letting providers offer digital health-based care management contracts directly to patients, and having patients use the data collected to negotiate lower premiums and deductibles from payers 6
7 Official partnerships with self-organizing patient cooperatives. Designed to collate patient data and work as an organized group to trade aggregated data for discounted health services and/or financial gain. For example, using the cooperative s pooled resources to prebuy capacity surgeries, other procedures directly from providers, while managing their own financial risk. Although these services are only a fraction of the potential ideas, they represent opportunities for health providers to return to their roots of offering affordable, high-quality care, while strengthening their relationships with the community and, ultimately, creating a truly connected healthcare system. But for such opportunities to be possible, providers must build the foundations of the digital/smart hospital and invest in their digital transformations so they can continue to be captains of their own fates. With new participants entering the space daily, survival in the future will depend on a provider s ability to adopt new technologies, engage with his or her local community and create better valueadded services for patients. About the authors George Mathew, MD, MBA, is the chief medical officer of the North American Healthcare organization for DXC Technology. In this role, he serves as the clinical expert and healthcare thought leader for our healthcare clients in transforming the healthcare marketplace. Contributors Rikin Patel, Chief Technology Officer, Americas, DXC Technology Travis Koberg, General Manager, Healthcare, Americas, DXC Technology Kim Ribbink, Healthcare and Life Sciences Writer, DXC Technology 7
8 Learn more at services References 1 Institute for Healthcare Improvement, The IHI Triple Aim Initiative, Initiatives/TripleAim/Pages/default.aspx 2 R. Carlson; J. Naisbitt, High Tech High Touch: Technology and Our Search for Meaning, R. Patel; N. Kachaner, BCG, Strategy: Opportunities for Action, AMGA, Taking Risk, 3.0: Medical Groups Are Moving to Risk Is Anyone Else? December 2017, 5 IDC MarketScape Western Europe Healthcare IT Service Providers, CVS Health Aetna merger proposal, February 9, Forrester Research, The Digital Transformation Race Has Begun, September Business Wire, Amazon, Berkshire Hathaway and JPMorgan Chase & Co. to partner on U.S. employee healthcare, January 2018, home/ /en/amazon-berkshire-hathaway-jpmorgan-chase-partner-u.s. 9 CNN Tech, Apple is opening medical clinics for its employees, February 2018, com/2018/02/27/technology/apple-health-clinic-employees/index.html 10 CNBC, Google sister-company Verily is plotting a move into a fast-growing corner of the health insurance industry, February 2018, About DXC Technology DXC Technology (DXC: NYSE) is the world s leading independent, end-to-end IT services company, helping clients harness the power of innovation to thrive on change. Created by the merger of CSC and the Enterprise Services business of Hewlett Packard Enterprise, DXC Technology serves nearly 6,000 private and public sector clients across 70 countries. The company s technology independence, global talent, and extensive partner network combine to deliver powerful next-generation IT services and solutions. DXC Technology is recognized among the best corporate citizens globally. For more information, visit dxc.technology.com DXC Technology Company. All rights reserved. MD_7865a-18 March 2018
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