An interview with Mitch Morris, MD, Vice Chair and US and Global Health Care leader; Greg Scott, Vice Chair and US health plans leader; and Greg Reh, Vice Chair and US and Global Life Sciences leader.
What should health care and life sciences organizations be doing in the coming year to address industry trends?
Dr. Mitch Morris: There’s a saying in the provider industry, “Go big or get out” and that mantra is getting louder as providers meet the challenges of emerging marketplace trends. We’re seeing increased investment in connected health, the exploration of new opportunities for both expansion and consolidation, and the continuing march forward on strategies to reduce cost and build operational value.
Technology-enabled processes at the center of connected health are evolving, enabling consumers to manage their care in new and innovative ways, and the industry must continue to meet the challenge by streamlining services, providing sufficient access to information and optimizing cost-reduction options.
The shift from volume to value is still a work in progress, but it is moving from a voluntary thing to an organizational necessity. This will require providers to measure and report on a variety of quality measures, laying the foundation for a needed transition to pay-for-value system.
With an increasing overlap in services under accountable care, providers are taking advantage of the need to build new partnerships and a competitive edge, while refining relationships with health plans and better aligning incentives. Regulatory changes are driving new actions on the part of providers. Alternative payment models, for example, will become a natural outgrowth of MACRA.
Going big means that providers can look for more efficient and productive strategies to achieve scale, manage unit costs and build value.
Greg Scott: Addressing trends in health care, and organizing the best possible response to the ever-evolving health care ecosystem, begins with information. Leveraging data analytics aggressively, which could save the industry $300 billion, begins with changing the way we view the enterprise value of analytics. It needs to be approached as a priority corporate strategy with CEO input, not just as a technology issue for the CIO.
To meet value-based care objectives, health plans need to become more collaborative. Plans are no longer confined to negotiating value-driven contracts with providers and can utilize new tactics, such as critical enabling technologies and competencies, to demonstrate a commitment to working in concert with providers on better strategies, cost savings and outcomes.
The customer experience isn’t always considered a strength in the industry, but consumer behaviors are changing quickly, and plans should be devising ways to better connect with their customers who are increasingly using non-conventional tools to manage their care.
That also means a greater investment – both financial and strategic – in innovation, both as individual enterprises looking to energize their own businesses and as part of the growing ecosystem. Plans need to write an Innovation playbook that includes offensive, defensive and collaborative plays.
Plans need to also consider navigating government programs and interests, as many plans are heavily invested in Medicare, and Medicaid among other government programs. The government business is getting bigger, but easier for health plan organizations. It will continue to reward businesses that bring a consistent focus and operational discipline to the management and oversight of government programs.
Greg Reh: As the life sciences move toward more patient-centric models, companies have an opportunity to improve patient engagement to perhaps aid in compliance within certain therapies or by support initiatives already in place.
The key components of an evolving system to achieve those objectives are data analytics, cost management and governance – analytics to help determine factors such as discontinuation risk, the move toward effective cost-cutting measures, and governance around how data is used and how patient engagement programs are instituted.
Greater integration across research and development, manufacturing and commercial organizations can enable a more holistic approach to addressing operational complexities and managing business risk.
For pharma, biotech and medtech companies, identifying and analyzing operational efficiencies can lead to the development of more innovative offerings while potentially keeping research and development costs down.
Life sciences organizations, in response to the industry-wide trends on cost, value and service, can and should be implementing different value models rather than continuing to rely on more conventional means of funding programs and controlling expense.
They will also continue to recalibrate their businesses, through mergers and acquisitions, consolidation of service and product lines to achieve more efficient scales of specialization, and to push further into new markets. And they will continue to manage risk and the demands of regulatory compliance by being more proactive in governing their operational processes.
Read more about the 2016 outlook for life sciences and health care at www.deloitte.com/us/LSHC-Outlooks