Trends Shaking Up the Healthcare Ecosystem

Remember when you were sick as a child — where did you go for care? You probably went to your doctor’s office, which was close to your home; your appointment was easy to schedule for your parent or guardian, and you received a sucker after your diagnoses and/or treatment. While some practices still support this experience, it’s quickly becoming an obsolete model in the modern-day healthcare ecosystem.
As we forge into 2023, you will notice more growth in non-traditional areas of healthcare delivery. I’ll highlight what trends we’re seeing, but first, let’s look at why changes are occurring. 

• Currently, many Americans defer care for several reasons. Having just officially come out of the pandemic, it is estimated by Qualtrics that 28% of consumers deferred care due to pandemic-related concerns. This year, Qualtrics data indicates that 31% of consumers deferred healthcare and 26% chose not to fill a prescription due to cost concerns. 
  
• Cost of care is the top reason why people are deferring care, especially for mental health, nutrition, and preventative care. In fact, delayed care due to COVID-19 decreased by approximately 11% over the last two years while the percentage of those deferring care for cost concerns increased by 4%. Therefore, according to Cleveland Clinic physician and Qualtrics Chief Medical Officer, Dr. Adrienne Boissy, the end of the pandemic does not necessarily mean the end of deferred care.
  

As a result, there are several trends impacting the healthcare ecosystem. First, the expansion of primary care services by non-traditional providers — such as Walmart, Walgreens, and others — is occurring at a rapid pace. Many mergers within the non-traditional space are currently in play, and the “Convenience Store” healthcare experience is growing.
While that growth continues, hospitals and traditional healthcare facilities are struggling to make ends meet for the following reasons: 

• Inflationary pressures, competition from emerging health centers, and overworked and burned-out nurses and physicians — among other things — have caused hospital leaders and operators to contemplate how to balance service against dwindling resources. 
  
• Concurrently, labor costs are up and there’s also a drastic shortage of nurses. 
  
• Reimbursement by Medicaid remains very low and Medicare rates are only slightly better. [For reference, employer sponsored health plans paid providers an average of 248% above Medicare during 2020, substantiating the fact that the systems cannot survive on government health plans alone.] 
  
• Public Health Emergency (PHE) funding is scheduled for a mid-January end, although a 60-day notice is required, and the notice deadline has already passed. Though that funding might continue for a short time, there doesn’t seem to be an appetite for increased federal spending. 
  

Sixty-one percent of healthcare dollars spent go toward lab diagnostics, complex imaging, prescription drugs, urgent care, emergency care and preventative care. Since the Affordable Care Act (ACA) has been in force, preventative care and certain lab diagnostics have become mandated benefits at a 100% level by insurance carriers. Hospitals participate in providing several of those services and will continue to be met with more cost competitive alternatives, facing even more pressure on ways to increase revenue. 
In fact, most health insurance payors provide incentive for members to use less expensive services such as stand-alone imaging centers, mail order pharmaceutical centers and urgent care facilities. The emergency room is the most expensive alternative for anything other than a life-threatening event. Most cost sharing arrangements are much higher for emergency room visits than urgent care, another incentive to stay away from the hospital when appropriate. 
In addition, Humana is expanding its Center Well Senior Primary Care clinics. Plans project 30-50 additional centers per year through 2025, according to Humana. And while expansion in the convenience store approach continues for all ages, telehealth is becoming a popular strategy to deliver quality outcomes for those with routine symptoms and conditions such as the common cold, pink eye, etc. It really has come down to solving the accessibility and affordability issues. It’s not the first time that payors and providers have united to solve problems, however, it’s certainly more prevalent today than in past years.
So, as the healthcare ecosystem continues to evolve, be aware of what’s happening in the market. It’s not like the visit to the doctor’s office of old. But whatever the evolution dictates, one thing is for sure. We will continue to need medical care and the delivery of care will continue to evolve while the private sector creates solutions to combat increasing costs.

 1. Healthcare Finance
2. National Price Transparency Study by Rand.​