Will a health system battered by the pandemic emerge stronger in the year ahead? The annual report predicts challenges such as profitably merging virtual and in-person care, and capitalizing on new consumer- and clinician-facing digital health tools.
The healthcare industry has six big challenges ahead in 2021: rightsizing after the telehealth explosion; adjusting to changing clinical trials; encouraging digital relationships that ease physician burdens; forecasting for an uncertain 2021; reshaping health portfolios for growth; and building a resilient and responsive supply chain for long-term health.
This is according to a new annual report from research and consulting giant PwC entitled “Top health industry issues of 2021: Will a shocked system emerge stronger?”
For this report, PwC’s Health Research Institute surveyed 2,511 American consumers, 128 health plan executives, 153 healthcare provider organization executives, and 124 pharmaceutical and life sciences executives in August and September 2020. HRI also interviewed numerous thought leaders from throughout the industry and frontline clinicians to understand their on-the-ground experiences during a historic year.
“While in 2020 many healthcare organizations saw their financial plans obliterated, patient behaviors radically shift and virtual care explode, in 2021 they will work to put the system back together,” said PwC researchers. “Not to how it always was — but in a way that reimagines healthcare delivery, reconnects broken pathways and makes a giant leap toward a consumer-centric healthcare system.”
“Nearly overnight, as volumes dropped precipitously, the deadly pandemic thrust patients, doctors, pharmaceutical companies and payers headfirst onto virtual platforms and other digital technologies.”
Nearly overnight, as volumes dropped precipitously, the deadly pandemic thrust patients, doctors, pharmaceutical companies and payers headfirst onto virtual platforms and other digital technologies that many had previously approached with hesitation, according to the report.
That sudden experiment allowed for valuable insights that healthcare organizations in 2021 can use to fine-tune where they should land on the spectrum of virtual and in-person — in ways that make the most sense for care delivery, patient experience, reimbursement and clinical research.
The insights also can help healthcare organizations navigate vaccine distribution, as well as the ebbs and flows of patient volumes due to COVID-19 in the year ahead, according to the new report.
The pandemic generated uneven experiences for millions of Americans as physicians, therapists, nurse practitioners, hospitals and other caregivers — all coming to telehealth with varying levels of experience themselves — tried suddenly to meet patients where they were, said PwC researchers.
Some virtual visits happened on nontraditional mobile platforms, on personal phones, through texts and through messaging platforms more often used for sharing family photos or Internet memes, it explained.
“In the year ahead, the industry will work to determine which virtual visits make the most sense, and where and how they should take place,” according to the report. “Some specialties, such as mental health, may find stronger footing via virtual visits. Healthcare provider executives surveyed by HRI most frequently cited mental health and psychiatry (58%), family medicine (56%), obstetrics and gynecology (46%), and pediatrics (44%) as the specialties in which their organizations will offer virtual visits in 2021.”
“In the year ahead, the industry will work to determine which virtual visits make the most sense, and where and how they should take place.”
Payers may wrestle with how to reimburse and, in some cases, provide virtual care. Pharmaceutical and life sciences companies may have to determine where they can and should plug in, HRI predicts. Providers may continue to improve the patient experience and be careful not to create new disparities in the health system through lack of technology access, it added.
“The historical model for telehealth was an alternative to in-person health,” said Mike Thompson, president and CEO of the National Alliance of Healthcare Purchaser Coalitions, in an interview with HRI. “And going forward, I think it will be an alternative to in-person health, but not a replacement for provider relationships.”
Healthcare provider organizations will have to start orchestrating care delivery to mitigate reimbursement issues, HRI predicted.
“Tying virtual to in-person seamlessly is important for reducing leakage and maintaining ancillary services, follow-up appointments and prescription levels,” said researchers. “Better integrating virtual patient visits into a care pathway makes for improved care and reduces dropped handoffs. More than half of consumers (51%) surveyed by HRI said they wanted a care coordinator or navigator to help orchestrate virtual and in-person care and provide support services.”
Sixty-eight percent of provider executives surveyed by HRI said they plan to use more care navigators and coordinators in 2021. Pharmaceutical consumer education may be challenged with virtual care visits, but technology may help bridge the gap, the report said. While only 19% of consumers surveyed by HRI said they have used a mobile app to help them take a prescription drug correctly or let them log symptoms, 83% of those who had done so thought it was useful.
“Happy clinicians are the best ambassadors for virtual care,” the report asserted. “Sixty-nine percent of consumers said it was important to have a recommendation from their primary care doctor before using an alternative care setting such as virtual visits. Maintaining clinician satisfaction is key for virtual and in-person visits. Health systems should carefully develop virtual care physician routines, such as making a standard patient check-in and checkout process, as with an in-person visit, and setting up the visit for the doctor.”
On another note, healthcare organizations should start planning now for longer-term strategic issues, HRI advised.
“In 2021, whoever captures the consumer first is expected to have more influence in guiding and navigating users through other parts of the health ecosystem,” researchers suggested. “The competitive landscape may transcend geographies. For academic medical centers, offering free or low-cost telehealth consultations may be a way to attract new patients willing to travel for specialized procedures.”
“In 2021, whoever captures the consumer first is expected to have more influence in guiding and navigating users through other parts of the health ecosystem.”
Regional providers competing for better patient access for both primary and specialty care can use a similar strategy, the report said. Healthcare providers that can offer the best access may win the patient, it said. Being able to scale up and down with virtual care is important for matching supply and demand and creating a more variable cost structure, it added.
“But making the requisite changes to the health system’s physical structure may lag even as outpatient space utilization is reduced,” the report read.
“Only 3% of healthcare provider leaders said they had plans to reduce their capital footprint, versus 14% who expect to increase spending. Health organizations should reengineer their products and services and how they are delivered in a way that creates a positive customer experience that is also financially sustainable.”
Elsewhere in healthcare, the world of clinical trials looks to be up for some big changes — and permanent ones at that, HRI predicted.
“In the face of a pandemic that forced nearly everyone, from patients to clinical trial coordinators, to stay home, at least temporarily, pharmaceutical and life sciences companies have been asking: How much can be done remotely?” the report read. “Quite a bit, it turns out. Forced to minimize in-person clinical trial visits, these companies are now trying to find ways to conduct trials with few in-person interactions.”
The COVID-19 crisis has increased the appetite for change across the industry as sponsors, contract research organizations and patients see benefits in a more decentralized model, HRI noted. The virtual trial, to be sure, is not a new concept: One team of researchers counted more than 1,100 trials listed on ClinicalTrials.gov employing connected digital products for remote data collection in both 2017 and 2018, the organization observed.
“Still, the shift to more decentralized, virtual studies has received a powerful push during the pandemic,” the report said. “Regulators, for their part, have tried to smooth the way for a pivot to virtual during the public health emergency. In March, as states were issuing stay-at-home orders, the FDA published pandemic-specific guidance for trial sponsors, institutional review boards and investigators on how to ensure the safety of their trial participants and reduce risks to trial integrity, while sustaining compliance with good clinical practice.”
The FDA is hinting that some of these changes could be here to stay.
“Being a clinical trialist of my own from the cancer world, I can see where some of the things we have adapted to in routine clinical practice during COVID-19 could then be parlayed into approaches in clinical trials,” said FDA Commissioner Dr. Stephen Hahn, a radiation oncologist, during the BIO Digital Conference hosted by the Biotechnology Innovation Organization this past June. “That could really help us expedite, and maybe we get that cycle time even shorter if we use some of these processes moving forward.”
HRI advised that clinical trials organizations should determine the right studies that can be set up for success in a decentralized trial model.
“Sponsors should identify and prioritize disease areas that are more conducive to enrolling patient populations through decentralized models,” HRI suggested. “This likely will include understanding the feasibility of running studies in non-conventional locations that can adequately facilitate patient visits, drug storage and biospecimen collection. Also, not every therapeutic area is expected to have the same opportunity to virtualize trial components.”
“Not every therapeutic area is expected to have the same opportunity to virtualize trial components.”
According to HRI’s survey, the top four therapeutic areas in which pharmaceutical and life sciences executives expect virtual trials in 2021 are oncology (44%), infectious disease (37%), immunology (28%) and women’s health (26%).
Organizations need to set up the operations and infrastructure, the report said.
“Traditionally, the sponsor and CROs have shared responsibilities in monitoring and overseeing clinical trial sites.” The report read. “These processes have been simplified through risk-based, data-driven approaches that have reduced the dependence on 100% source document verification.
“The decentralized trial model offers additional opportunities to disrupt the trial ecosystem and gain efficiencies through simplification of the trial drug supply chain, reduction of clinical research associate visits, and increased uses of data and analytics for trial oversight.”
As Karen Noonan, senior vice president of global regulatory policy at the Association of Clinical Research Organizations, wrote in The Pharma Letter in September: “Patients stand to benefit from a [decentralized clinical trial] approach, both in terms of participation opportunities and the broader patient populations who will benefit from the ability to keep trials up and running. But what’s currently missing from the conversation is not just why [decentralized clinical trials] are important, but how to effectively create and execute them by leveraging new and existing digital technologies.”
New players are expected to emerge, offering digital tools and analytics aimed at decentralized clinical trials, HRI suggested.
Until now, the healthcare industry has focused more on ease and simplicity of technology solutions for consumers, and less for the clinicians who treat them, HRI contended. That may be changing in 2021, it predicted.
“Nearly all respondents to HRI’s survey — 94% of provider executives, 92% of life sciences executives and 91% of health plan executives — said improving the clinician experience is a priority for their organizations as they enter 2021,” the report read. “Digital technology, if made right, could be the antidote to countless pain points that physicians encounter every day, leading to more efficient and satisfied doctors, happier patients, and more patient referrals.”
Well before the pandemic, many physicians already were tired and burned out, wasting too much time on administrative tasks and wanting more from digital technology, specifically electronic health records systems, according to the report. They still tussle with endless drop-down menus, alerts and regulatory reporting requirements that sap their efficiency and ability to provide a good experience for patients, it said.
“Sixty-two percent of physicians responding to a 2018 survey by the Physicians Foundation found that issues such as third-party authorizations, treatment protocols and EHR design were hurting patient care,” the report stated. “And now with telehealth going mainstream as a byproduct of the pandemic, they also are challenged to meld the virtual and in-person care worlds in a bigger way than ever.”
Healthcare organizations can achieve efficiency with better digital relationships, the report suggested. The pandemic may have accelerated payers’ efforts to reduce physicians’ administrative burdens, it added.
“Early on, CMS relaxed several administrative requirements — such as allowing verbal orders versus written EHR orders in the hospital and relaxing licensure requirements for providing virtual care across state lines — that resulted in physician relief, at least for the duration of the public health emergency,” said researchers.
“Early on, CMS relaxed several administrative requirements; that resulted in physician relief, at least for the duration of the public health emergency.”
“Some private insurers stepped in to help, too,” they added. “In April, Humana announced that it would make the claims process easier and faster so providers could get paid. The company uses bots to assist employees in handling claims.”
In 2021, HRI expects more investment by payers in process automation such as provider contracting. Look for enhanced portals through which providers can see what is happening to different claims, or straight-through processing, which aims to automate handoffs between different systems, HRI suggested.
As a result of these new digital relationships, healthcare organizations will need to prioritize clinicians’ mental health, HRI stated.
“According to HRI’s survey, 36% of healthcare clinical workers reported symptoms of anxiety or depression as a result of the COVID-19 pandemic, but only 12% said their employer had offered them new mental health benefits to cope with the pandemic,” according to the report.
“Health organizations should set the example for other industries by offering a menu of mental health benefits, including digital therapies, to their employees who as essential workers arguably have been under more stress during the pandemic than others.”
As of September, NYC Health + Hospitals had completed 9,000 “wellness rounds” at its locations in the five New York City boroughs, during which mental health professionals looked for signs of anxiety, depression and burnout among staff and connected them to resources, the report read. Beware that experience may be uneven based on gender, race or ethnicity; a one-size-fits-all strategy for improving clinician satisfaction likely will not work, it added.
On another note, healthcare organizations should shoot for omnichannel engagement, HRI advised.
“The advent of telehealth, the focus on continuing to drive patient adherence in a more virtual world, and the increased need to provide physicians with evidence of a therapy’s value are expected to drive many of the services that life sciences companies bring forward,” the report said. “They should map out how to support the patient-physician virtual interaction; for example, how can physicians get free drug samples to a patient if their visit is virtual?”
Field staff should be upskilled, and the tools and content they use upgraded to be effective in virtual interactions, HRI added.
“Organizations should also make sure to integrate digital solutions into care models and business operations,” it said. “For example, a health system may design a digital app that allows patients to add drugs to their medication lists. But unless it also designs for providers to get a notification and prompt to perform a medication reconciliation, it could create a patient safety issue.”
Healthcare organizations should invest in cloud-based technologies and analytics that can pull in patient data, including social and lifestyle, from several devices and sources, allow clinicians to access them in real time, and use machine learning to arm clinicians with suggestions and recommendations for patient care, HRI advised.
A healthcare industry that found itself fighting in the dark during the opening waves of the pandemic will need a forecasting system that provides a lens for the uncertainty ahead, HRI suggested. Better sightlines can help healthcare companies prepare for shifts in the insurance market, the economy, utilization, consumer behavior and future waves of infectious disease, it added.
“Seventy-four percent of health executives responding to HRI’s survey said their organizations would invest more in predictive modeling in 2021,” researchers said. “This capability to forecast the future could be as important to healthcare survival in 2021 as a mask may be for slowing the spread. No longer can healthcare organizations review the past 30 days of claims or historical behavioral trends to determine next steps.”
“Seventy-four percent of health executives said their organizations would invest more in predictive modeling in 2021.”
They need real-time insights to create the healthcare industry’s own forecasting system to alert healthcare leaders to the shifting fronts that may have a major impact on their business, the report read. As the pandemic experience varies at different times across different regions of the country, local partnerships between healthcare providers, payers, community groups and government agencies can help power a more informed response, it added.
“A CEO flight simulator relies on advanced analytics and modeling,” the report read. “The industry has been missing the equivalent of a CEO flight simulator to help health leaders identify warning signs early, so they can be prepared to make quick decisions when necessary, while also allowing for dynamic strategic planning. HRI’s survey found that provider and life sciences executives believe they are reasonably able to understand their supplies and workforce, but they feel they have less of a vision into predicting supply and demand.”
Stronger forecasting could help health services providers predict volumes by service lines and sites of service, as well as plan for clinician staffing, personal protective equipment needs and vaccine distribution, HRI said. Payers could use insight into how members may shift between commercial insurance, Medicaid and Medicare, and when to expect significant changes in utilization and projected impacts to medical loss ratios, it added.
“All sectors should have better insight into patients to understand whether transportation needs or work schedules will prevent them from following through on a treatment, to predict when their conditions might be worsening, or to determine how to best connect pharmaceutical products to individuals,” the report said.
Healthcare organizations must develop the right sensors to alert leaders to important shifts ahead, HRI advised.
“The experience of the pandemic showed the need for healthcare leaders to move from a retrospective view fed by historical trends and past claims to a prospective view based on real-time information, both clinical and nonclinical,” the report said. “This is not a one-time exercise; healthcare companies need a constant reading on these streams to understand how to adapt care and engagement in response to crises or sudden shifts in behavior and mobility.”
Beyond crisis moments, the ability to model out these different scenarios, and make decisions accordingly, can help organizations monitor and prevent chronic disease progression by responding to patients differently and adjusting their plans, the report read.
“Organizations may not be taking advantage of existing data to synthesize it in this way, but during the pandemic companies were forced to step back and assemble clearer pictures,” the report added.
“Health organizations also can use these sensors to shift gears to prevent dramatic drops in revenue from plummeting surgeries, and allow leaders to fine-tune their workforce plans to make sure they have exactly the right number of employees to respond — all of which avoids wasteful spending during crucial times.”
“Beyond crisis moments, the ability to model out these different scenarios, and make decisions accordingly, can help organizations monitor and prevent chronic disease progression.”
Healthcare organizations also need to convene regional collaborations, HRI said.
“Academic medical centers, business councils, community leaders, government and large local employers have the opportunity to convene regional efforts, filling in gaps in capabilities and making use of their institutional expertise,” the organization added. “New entrants can serve as key partners, helping generate insights from health and consumer data that drive smart outreach strategies.”
Community organizations could also help execute these strategies by building on community trust and providing a lens into the social determinants impacting the health of their communities, the report said. New federal rules for interoperability and a push toward more health information exchanges may accelerate the flow of data needed to make regional collaborations more successful, it said.
The COVID-19 pandemic placed some companies in a position to invest and evolve, and others needing to partner to survive, HRI observed. The shock of the pandemic has highlighted the need for many healthcare organizations to diversify their capabilities and revenue streams to be more resilient, readying for impactful court decisions, increased focus on pricing and price transparency, and the unknown, it said.
“Some companies, as they better understand the impact of COVID-19 on their business, are expected to return to driving their pre-pandemic growth agendas,” the report said. “In 2021, HRI expects to see increased investment in and by healthcare companies to shore up gaps exposed by the pandemic and position them for growth.”
Insurers in 2021 may invest in better integration internally and with healthcare providers to create a better member experience, HRI said.
“Traditional health insurers are facing competition from newer companies such as Oscar, Bright Health and Accolade, with business models built around the member experience and digital tools to enhance that experience,” according to HRI. “Nearly 50% of payer executives surveyed by HRI said their organization is investing in digital product support and educational tools such as mobile apps to improve the member experience.”
“Traditional health insurers are facing competition from newer companies with business models built around the member experience and digital tools to enhance that experience.”
Meanwhile, some providers may struggle to survive, while others can invest and evolve, the report suggested.
“The recovery from the early days of the pandemic has been uneven for healthcare providers,” it said. “Health systems that own a health insurer were able to provide a financial cushion to support clinical operations at places like Intermountain Healthcare, Presbyterian Healthcare Services and Kaiser Foundation Health Plan and Hospitals.”
Hospitals and health systems that have mostly recovered from the initial hit of the pandemic had invested before the crisis in areas such as hospital-at-home services and digital capabilities that allowed rapid expansion into virtual care and remote patient management, HRI noted. Other providers are still struggling financially and may need to consider deals, such as partnering with or being acquired by a larger health system or a health insurer in order to survive, the organization added.
Insurers and well-positioned providers can advance investments in digital, value-based arrangements and customer experience, the report said. They should use the telehealth claims data accumulated during the pandemic to target investments in virtual care, including hospital at home, to areas where it is most likely to lower healthcare costs, it said.
“For example, consumers with a complex chronic disease who also suffer from mental illness cost employers 12 times more than healthy ones, according to an HRI analysis of the Medical Expenditure Panel Survey,” the report read. “HRI’s survey found that consumers with complex chronic disease and those with mental health conditions are overwhelmingly willing to use telehealth. Insurers and providers should also consider where they lag behind their competitors in digital capabilities that enable a smooth customer experience.”
Payers should consider forming more value-based partnerships with providers who may be more open to diversifying their revenue stream, the report said.
“In September, a regional insurer joined with a not-for-profit health system serving the Baltimore-Washington area to announce a value-based partnership centered on preventive and primary care that they estimate will save the insurer $400 million over the next seven years by improving outcomes,” researchers noted. “Struggling providers may find deals key to survival in 2021. Those that are still struggling may consider partnerships with other health plans or providers before a full-on acquisition.”
This could mean partnering with a larger health system to drive more volume, or a value-based care arrangement with a payer to start diversifying revenue, HRI added.
For example, nursing homes were hit hard by the virus. In an August survey by the American Health Care Association and the National Center for Assisted Living, the majority of long-term care facilities said they could not sustain another year under current financial conditions, the report said.
“Long-term care facilities may look to diversify into home health, which fared better during the pandemic, or to partner or sell to a health system or private equity firm investing in long-term care,” the report said. “A sale to private equity also may be an option for some specialties in which private equity continues to invest, such as dermatology, gastroenterology and ophthalmology, or has started investing more heavily, such as behavioral health.”
From managing the cost and tax implications of “onshoring” manufacturing to developing a network approach to redundancy, HRI expects the health industry in 2021 to start to reconstruct the supply chain to function more flexibly, as it does in other industries such as automotive or technology.
“Where possible, the health system is expected to begin to triangulate supply chain risks, knowing as much as possible about their suppliers’ suppliers and establishing new collaborations to secure the supply chain through diverse geographies and sourcing materials,” the report read. “These actions will likely mean near-term incremental investments into supply chain capabilities, resulting in marginally higher direct costs.”
However, they could lay the groundwork for a more flexible and responsive supply chain that could rapidly scale up or down to meet customer needs, HRI said.
“HRI expects the health industry in 2021 to start to reconstruct the supply chain to function more flexibly, as it does in other industries such as automotive or technology.”
“The challenges plaguing the medical-products supply chain — lack of geographic diversity, limited numbers of suppliers for essential medicines, inability to predict demand surges, and limited purchasing power of small and midsize health systems — existed before the COVID-19 pandemic, but have been exacerbated by the crisis,” the report said.
On another note, the American Hospital Association found that 80% of hospitals reported a moderate to large impact of drug shortages on spending between fiscal years 2015 and 2017. Limited suppliers of some generic drugs have also led to increased prices that are passed on to consumers and insurers, the report said.
“This year, 18 Blue Cross Blue Shield plans formed a collaboration with Civica Rx, a not-for-profit organization established by a group of providers, to manufacture their own generic drugs,” the report said. “With the COVID-19 pandemic, these impacts have played out in rapid fashion. Shortages of APIs, supportive care drugs, ventilators and personal protective equipment were rampant.”
In 2021, HRI expects distributors and health systems to consider establishing contracts with secondary suppliers, joining new group purchasing organizations, relocating facilities and approaching storage and distribution on a more regional scale, the report read.
According to HRI’s executive survey, 94% of life sciences executives and 86% of provider executives said that improving their supply chain overall was a priority in 2021. Specifically, improving supply chain transparency was their top priority.
Pharmaceutical and life sciences companies can assess their risk by analyzing their manufacturing portfolio to ensure that it is diversified enough to absorb future geopolitical, public health or natural disaster crises that could disrupt the supply of finished goods, APIs, or raw materials, HRI advised. Among pharmaceutical and life sciences executives surveyed by HRI, 82% said they expected to “reshore” components of the supply chain within two to five years.
“Organizations that choose to onshore low-margin products could have a competitive advantage in times of crisis but should consider collaborations with hospital systems and health plans to secure sufficient, predictable volumes,” the report read. “Collaboration may be key to securing primary and secondary resources. Hospitals should weigh the costs and benefits of group purchasing organizations and of bringing parts of the supply chain in-house.”
For physician practices, regional group purchasing organizations are emerging as [alternatives] to national groups, HRI noted. Hospitals should proactively map suppliers of essential medicines and products to assess if they are in geographies that could be subject to future disruptions, and identify risks and potential secondary suppliers, it added.
“For physician practices, regional group purchasing organizations are emerging as [alternatives] to national groups.”
“Hospitals should assess what parts of the supply chain they can bring in-house, such as devices, pharmaceuticals or related products,” the report said. “This could also include partnerships or joint ventures with local manufacturers as … alternative [suppliers] or [a] redundancy measure. Direct relationships with manufacturers could also help to stabilize the supply chain.”
Investment in advanced analytics could allow manufacturers to better deliver on the promise of the right treatment to the right patient at the right time and in the lowest-cost appropriate setting, the report went on to say.
“Such investments could reduce costs associated with shortages and provide transparency into the murky U.S. supply chain,” the report read. “Fifty-six percent of healthcare provider executives surveyed by HRI said their organizations were effective at predicting demand, while 12% said they were very effective.
“According to Erin Horvath, president of distribution services at AmerisourceBergen, one opportunity to build from is the Healthcare Ready public-private partnership and the use of advanced analytics during the pandemic to map the supply chain from APIs to patients.”
Thrust outside its comfort zone, the healthcare system in 2021 should not regress, HRI predicted.
“The industry will have to balance the challenges of pressing for innovations while battling the uncertainty of a deadly pandemic and the economy,” the report said. “It should work to right the wrongs of institutional inequities that have disadvantaged communities of color, whether through COVID-19 or through basic lack of access to care.”
“The industry will have to balance the challenges of pressing for innovations while battling the uncertainty of a deadly pandemic and the economy.”
It should root itself in processes and systems that work for clinicians and consumers, while improving mental health care for both, the report read. It should strengthen its infrastructure to better weather the next crisis, it added.
“Winners in 2021 are expected to determine how to profitably merge virtual and in-person care, and weave in the digital tools that improve consumer and clinician relationships while enabling pharmaceutical companies to find their new footing in the blended virtual-physical visit and clinical trials,” the report concluded.
“They will strike partnerships that strengthen their portfolios and will rebuild their supply chains. The result is likely to lead to more reflective research, more resilient operations, next-generation care delivery and, most importantly, better health for all.”