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2010 Implications

The Three Forces of Change and Four Future Trends outlined in HealthCast 2010 will affect healthcare's stakeholders in different ways, depending on their geography, culture and financial condition. For many organizations, these forces will create problems. For others, they will give rise to opportunities. By reviewing the following 12 implications, healthcare's stakeholders can work toward needed changes today.

Healthcare organizations that are consumer friendly will be winners. Organizations, whether they be hospitals, medical groups or health insurers, must change their processes, technology and organizational structure with particular emphasis on delivery systems, attitudes and staff training. They must integrate eligibility, claims, referrals and authorizations into a customer-friendly process. Consumers will be increasingly stratified, with two of the largest categories being e-health and traditional patients. Although designing Web-based applications will be necessary for healthcare organizations, some consumers (those who still shun technology) will be averse to e-business encroachments into their healthcare delivery. Organizations must define, design and deliver the right customer experience for different types of consumers. Even those individuals who use the Internet as their primary health education source will want personalized solutions.

Action items:

(We recognize that the specific actions will depend on each organization's location, readiness for change and future development. However, we list these to begin the debate of what will be effective measures.

• Foster and reward a service culture
• Reorganize internal processes to focus on consumers
• Measure the patient "experience"
• 5 Design interactive customer feedback systems that address the increasing segmentation of consumers
• Improve the processes for communications with customers through the use of Internet, mail, face-to-face and telephonic interactions. For example, create personalized Web pages for patients and encourage dialogue through e-mail and chat sessions
• Provide patients with increased access to their medical records data

Organizations must distinguish themselves through branding. Consumerism will blur the lines between wellness, acute care, chronic care and long-term care. Through the Internet, geographic boundaries will also blur. In the United States, healthcare organizations engage in advertising, but few understand branding. In Europe and Canada, healthcare organizations have done neither. However, all healthcare organizations will need to brand both at the corporate and sub-brand levels to attract capital, customers and market share. Branding occurs over a sustained period of time and not without an investment in resources. Done well, branding is magic. Done poorly, market share either does not grow or erodes. Organizations need to decide who they're branding to - consumers, purchasers, physicians.

Action items:

• Determine the organization's strengths for branding purposes
• Understand the current operating and competitive environment
• Create an organization in which marketing, sales, service and products are interlocking functions working to support a consistent message
• Build expectations into the brand and ensure you can deliver on those expectations
• 5 Actively manage your brand

Service and speed will be keys to consumer satisfaction. The Internet has fostered the notion of "I-time." To compete in "I-time," healthcare organizations must develop virtual brains - also known as knowledge management - so workers and management can learn from each other in a fast-changing industry. Healthcare organizations often lack market intelligence. Through knowledge management, they must collect, consolidate and analyze information to better understand their consumers, decision-making processes and perceptions of services relative to competitors. Health plans must also consider how their marketing and distribution models answer the demands of an empowered, connected consumer. The need for virtual networks is even more imperative today as medicine becomes less invasive and more knowledge intensive and computerized. Healthcare institutions will be more decentralized and virtual (linked by networks) and less institutional (all under the same roof). Organizations must simplify the billing/claims submission/reimbursement process for patients, providing online updates, access to their account information, or e-mails describing the status of claims and questions. They need to design e-scheduling systems and other way to make it easier for consumers to make appointments and get treatment.

Action items:

• Establish a knowledge management function
• Design clinical processes incorporating consumer expectations
• Use techniques used by other services companies, such as financial services, to deliver speedy customer service
• Create a customer service center to ease patients through the system efficiently
• Align culture with customer expectations
• Align financial incentives

New E-business models will emerge and challenge present-day medical delivery vehicles. The Internet gives the advantage to speed over size. Bureaucratic healthcare organizations will fail in this race to smaller, adaptive entrepreneurial ventures. New types of business models may break through in insurance and service delivery. One such model could be a Web-based virtual health plan that links with providers in numerous markets. Another could be virtual medical records warehoused through the Internet. Already, models that translate, format, reformat and transfer clinical and financial information are going forward. Such paperless transactions, in which intermediaries charge a per-transaction fee, will be plentiful. In many organizations, E-business strategies are in flux because of the speed of change going on. Even so, organizations need to look to partnering through the common platform of Web-based systems.

Action items:

• Understand and experiment with e-health ventures
• Proactively look for new types of partners
• Evaluate where the organization is in the e-commerce evolution

The race for capital will hinge on the ability to demonstrate quality, efficiency and customer focus. Healthcare organizations will compete for capital on the basis of current, quantifiable and competitive data. Their investors, whether they are governmental or private sources, will demand prudent expenditures in facilities, technology and organizational relationships. Losing the information race will mean losing the capital race. Organizations may need to divert capital from other priorities to invest in information technology. Healthcare organizations should focus on competencies they can measure and demand the same measurable results of their business partners. Outsourcing of some functions, such as information technology, business office services, lab, food service, housekeeping and facility management will accelerate. Although this is very common in the United States and Canada, it is just beginning in Europe. Government can encourage proper allocation of capital with both carrots and sticks. As for the stick, health authorities can regulate what types of new technologies and therapies are approved for reimbursement and efficacy. With a carrot of tax incentives, they can encourage innovation.

Action items:

• Hedge risks by partnering with e-business organizations
• Make performance measurable
• Reallocate capital, outsourcing non-core functions

Functional silos in healthcare must be eliminated and replaced with seamless service. Professionals may impede change as they cling to traditional frameworks. Physicians are becoming more coherently organized, which benefits purchasers who are trying to work toward efficient models of quality care. However, as physicians form larger networks, health networks are often destabilized and consumers are unsure about who their providers are. These turf battles among professionals contribute to a fragmented care path for consumers. Healthcare organizations need to work together toward a transparent system of care for consumers. Physician organizations may need assistance in consensus-building skills because their decision-making will depend on working together in adaptive organizations, not alone as independents.

Action items:

• Form cross-functional teams that align incentives
• Educate workers and professionals about the benefits of teaming
• Change the culture of the organization
• Change incentives to encourage buy-in from professionals

Resources must be reallocated to retrain the workforce to deal with empowered consumers and technology. E-business and medical technology may eliminate some practitioners and elevate others, depending on their perceived value. It also will foster new types of professional and technical careers. As society sees the dawn of genetic mapping, healthcare organizations must have professionals who can take on the concomitant implications and responsibilities. Health professionals can no longer expect their initial education to carry them through a career. Healthcare organizations must become learning organizations. By using technology to attract and invest in staff, organizations may be able to avoid the costly turnover that plagues some aspects of the industry.

Action items:

• Use Web-based and computer-based training tools
• Provide incentives to become multi-skilled
• Use flexible, competency-based compensation
• Use technology to attract new staff
• Design user acceptance into new systems integration efforts
• Identify and mentor future leaders from the professions

Payers must stress prevention because early detection and intervention will increase costs. As a result of the Human Genome Project, consumers may begin getting their own individual genetic maps by 2010. Their risks for different diseases will be clearer, and they'll want to do something about those risks. In some cases, consumers may demand maintenance drugs or surgery to diminish their risks of certain diseases. In addition, as consumers understand more about their health risks, service niches could arise to treat anxious or depressed patients who are fearful of the future at hand. While genetic mapping may lead to more prevention, it also may mean that hospitals treat more severely ill patients, a trend that is already under way. Plan sponsors should pay more attention to the contribution of unhealthy behavior to poor health as they look for ways to incent healthy behavior. Purchasers must decide what is the right mix of co-payments and deductibles to incent cost-savings.

Action items:

• Use Internet to disseminate information to consumers more quickly
• Perform outcomes studies to determine benefits of early detection and use of preventive drugs and services

Consumers will want more and won't want to pay for it. There will be increasing demand on healthcare providers and purchasers to spend more on information technology and skilled workers to serve demanding consumers. Organizations with limited budgets will balk at such expenditures. However, organizations must look within to reduce overuse and misuse of medicine and a more efficient delivery process. At the same time, they should work toward conditioning consumers to expect less or pay more. Consumers often don't understand the costs involved in over-treatment.

Action items:

• Educate consumers about the trade-offs involved
• Design payment mechanisms that encourage consumers to be more cost-effective
• Develop more self-service delivery vehicles
• Reduce waste in the system through reduction in unnecessary variation in practice
• of care

Ethical dilemmas will proliferate for consumers, providers and purchasers. The Human Genome Project will push the envelope in terms of how medical information is collected, disseminated and organized. In addition, new waves of medical devices and drugs will elevate questions of medical necessity, personal responsibility and rationing.

Action items:

• Establish a bioethical framework in which to make decisions
• Consult with established bioethics departments at other institutions, such as academic medical centers and universities

New opportunities for private health insurers outside the United States will expand rapidly. As discussed earlier in this report, consumers in Europe, Canada, New Zealand and Australia are increasingly purchasing private insurance to supplement basic coverage. Consumerism will foster a demand for new services and products, many of which will not be paid for by basic coverage. As our HealthCast 2010 survey showed, however, insurers have a great deal of opportunity to leverage the benefits of e-business. As private insurers develop new models, e-business is certain to be incorporated into their plans.

Action items:

• Analyze international markets for expansion
• Determine product line offerings
• Leverage e-business competencies
• Look at entire benefit structure to determine spending priorities

Medical professionals need to work toward global standards of medical treatment. In the United States, no national processes exist to develop standards of care. Even if a national organization existed to develop standards, there are few incentives for professionals to implement standards. The result has been widespread variation in medical standards from region to region. In Canada, organizations have been established in several provinces to examine practice patterns and to develop and promote standard practices. In Europe, many countries are working toward national standards, but there is no process to find common grounds among the European Union countries. Some European thought leaders have raised the issue of a basic health benefit package across the European Union. Such a product could greatly benefit governments, as well as employers interested in globalizing health benefit packages. However, it would also beg the need for global standards of medical treatment. One model may be Health Level Seven (HL7), which develops software specifications that allow disparate healthcare applications to exchange keys sets of clinical and administrative data.

Action items:

• Begin and support the debate on the benefits, costs and implications of regional and global standards

• Look to similar standardization efforts, such as ISO 9000 and HL7

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