|BEYOND THE HORIZON
Three broader questions we’ll be thinking about in the year to come.
Is healthcare “doing digital” or “being digital”?
The old healthcare neighborhood is being transformed by new digital settlers—a growing number of consumers whose primary way of interacting with the service economy is using digital tools, and a legion of venture-funded startups and behemoth disruptors who see healthcare as the next venue for their digital businesses. For long-time residents who’ve lived in the neighborhood for decades or longer, all of this can seem daunting, and traditionally “analog” organizations—among them physician practices, hospitals, and insurers—have been scrambling to renovate their old residences. Having spent much of the past decade installing the digital plumbing systems needed to keep pace—electronic health records, data warehouses, analytics tools—the attention of many provider systems has now turned to other architectural features: namely “digital front doors” (access, telemedicine, scheduling), and “digital back doors” (billing, collections, transition management). A larger question looms for incumbents, however: are we going to live our lives differently in these new digital homes, or will the business of healthcare continue to get done the old way, just with a new, digital facade? A member executive described this distinction to us last year as the difference between “doing” digital and “being” digital, and that struck us as precisely right. For all the billions of dollars spent, the armies of consultants and scores of digital initiatives, it’s still not clear that incumbents will be able to fundamentally reimagine how care is delivered and paid for. We’ll be looking for innovations that don’t just augment traditional care delivery but supplant them entirely—our own version of a digital “neighborhood watch”.
How should we transform medical education?
In the slow-moving field of academic medicine, it now feels like everyone is launching a medical school. And data confirms a recent explosion of new medical schools, with 29 launching since 2002, and perhaps a dozen or so more in the works. The sponsors are varied (community-based health systems who want an academic anchor, universities looking to add medical training), with myriad reasons cited as motivation. Health systems want to solidify physician pipeline, and aggregate the resources (research programs, call coverage support) necessary to attract premier specialists. Universities have seen their peers profit from the cash engine of a teaching hospital. Community pride and hubris is important—no significant city wants to be without a medical school. And with the American Association of Medical Colleges (AAMC) predicting a nationwide physician shortage of 122,000 by 2032, everyone can rally around the need for more doctors. But more medical schools may not actually solve the provider shortage problem. While the number of enrolled medical students has grown 52 percent since 2002, the number of residency training spots has only grown 1 percent annually over the same time period, merely shifting the clog in the training pipeline. As medical student debt rises and some programs look to eliminate tuition, many new medical schools, particularly those without public funding, are among the most expensive in the country.
Larger questions loom: do we actually need more doctors, and should we be training them and other providers in a radically different way? New medical schools claim to be advancing training by focusing on “medicine assisted by artificial intelligence and cognitive computing,” or including “dedicated innovation and research [curriculum] blocks”. This feels like innovation around the edges of the current model, and falls short of real transformation: should we embrace an undergraduate model of medical education? Should we rethink provider supply needs across different levels of licensure, and create programs that train these providers to practice together? Established academic medical centers worry they won’t be able to support the costs of their research and teaching missions, given price pressure and shift to value-based care. The closure of Hahnemann University Hospital in Philadelphia last summer raises the question of whether launching a greater number of subscale medical schools and teaching programs provides the most effective way to train providers and deliver high-end specialty care. Getting to the right academic training and care delivery model will require community, government, academic and hospital leaders to collaborate on a long-term plan aimed at delivering greater value, scale and productivity.
Will AI solve healthcare’s “cost disease”—and do we want it to?
For decades, healthcare has lagged other segments of the economy in terms of productivity gains, a phenomenon that the late economist William Baumol dubbed the “cost disease”. Because healthcare is inherently labor intensive, and because many of the tasks involved are non-routine and specialized, total wages have risen without reflecting a broader increase in productivity relative to the rest of the economy. In recent years, however, there has been much discussion of the promise of artificial intelligence (AI), and its close cousin machine learning, to overcome healthcare’s cost disease. Perhaps we could train AI-powered robots to read diagnostic scans, deliver complex diagnoses, and perform intricate surgeries. Some of this is starting to happen, but more promising in the near-term is robotic process automation (RPA), whereby many of the back-office functions of coding, billing, record-keeping and reporting are being taken over by AI. One organization we work with has begun to implement RPA in its revenue cycle and suddenly recognized it has a major HR problem on its hands—it will soon be possible for them to eliminate a third or more of their back-office staff in key areas. Is this a good thing? Surely reducing overhead and administrative costs could allow them to lower the cost of care for patients, but job losses of that magnitude will hit their local community hard. Healthcare—the hospital sector in particular—has been one of the most reliable sources of employment growth over the past decade or more. A question soon to face policymakers: are we more interested in lower-cost care or healthcare-driven job growth, and can we have both? No easy answers, but given that healthcare organizations are the largest employers in many communities, it’s a question that merits much closer attention nationally.