Business of Healthcare and Value Based Care – 2023 Health IT Predictions

As we head into 2023, we wanted to kick off the new year with a series of 2023 Health IT predictions.  We asked the Healthcare IT Today community to submit their predictions and we received a wide ranging set of responses that we grouped into a number of themes.  Check out our communities predictions below and be sure to add your own thoughts and/or places you disagree with these predictions in the comments and on social media.

All of this year’s 2023 health IT predictions:

And now, check out our community’s healthcare business and value based care predictions.

Jon Kimerle, Epic Alliance Manager at Pure Storage
It’s time to clean out the garage: simplification and consolidation of health IT is our next step toward optimization. In the last few years, with new technologies and software emerging, healthcare organizations have ended up investing in too many varied systems or offerings. Health systems are acquiring more complex software and technologies – as well as the people to manage them – while they continue to keep legacy tech. More tech requires more upkeep, more data requiring complex management, and less interoperability or communication between dissimilar systems.

Healthcare organizations need to look at simplifying and consolidating their IT portfolio to provide operational support and actionable outcomes not delayed by overwhelming amounts of unstructured, unmanageable data or incompatible IT systems. Healthcare organizations essentially need to clean out their IT garage and look for the solutions that tackle their most critical issues while offering streamlined compatibility and impacting patient care.

Chris Sullivan, Global Healthcare Practice Lead at Zebra Technologies
Compliance with digital health regulations will drive tech modernization. Over 60 countries have now enacted digital health regulations and/or Ministry of Health digital mandates which include unique device identification (UDI) and medication serialized marking. Both UDI and medication serialized marking provide a digital identifier on medical devices used in patients, such as a pacemaker, and medications given to patients, essentially providing the ability to track and trace a device or medication.

As hospitals implement the digitization to comply with these regulations in 2023, they’ll also benefit by reducing adverse product recall and inventory events, falsified medical product use and accelerating HIMSS Stage 7 implementations. Additionally, labor shortages will double the medication error rate among providers, according to Forrester. Bar code medication administration and IV infusion safety systems, and electronic health records can help to provide added vigilance to intercept adverse drug events. Expect IT teams to continue to spend on technology modernization with an emphasis on laying a solid, long-term framework that can support rapid solution scaling in the years to come.

Ted Shannon, CFO at Strive Health
Continued consolidation in primary care There will continue to be consolidation in primary care. It helps to manage costs. Optum Care is becoming a model for big companies. Amazon and Apple want to find ways to bypass traditional healthcare.

Kyna Fong, CEO and Founder at Elation Health
Over the last few years, significant private capital has flowed to innovative primary care-led ventures. As a result, the primary care market is estimated to be worth $260 billion in 2022. In 2023, these primary care companies will be under increased pressure to deliver financially — but their models might not be ready. These innovators need time to overcome a system not built for primary care, in the context of decades of underinvestment.

This is the time for private investors to double down on these models. The demonstrated return on investment for primary care is remarkable: for every $1 invested in primary care, $13 of costs can be saved downstream. We know that high-value primary care improves health outcomes and drives down total cost of care, with potential to influence 90% of the $4 trillion total in annual U.S. healthcare spending. In financial models where revenue is generated by the money saved in avoidable spending, it simply makes sense to invest in primary care.

It takes time for delivery systems, technology, and payment model intricacies to catch up to the kind of equitable, accessible, high-value primary care these innovators are designing. Now is not the time to abandon efforts to reform just because the economy is taking a dip. Now is the time to bolster support and give these innovators the latitude to experiment outside the status quo and reinvent primary care models that improve care for America’s most vulnerable citizens while also improving the health of our economy.

Matt Dickson, Senior Vice President, Communication Solutions at Carenet Health
Continued Consolidation Will Threaten Rural Hospitals: The ongoing wave of multi-billion-dollar mergers and acquisitions is showing no signs of slowing down in 2023. As the new year unfolds, many small-scale, independent hospitals and providers – especially in rural areas – that are contending with staff shortages will be faced with either going out of business or being acquired by larger, well-established entities. Compared to large health systems, the country’s smaller independent hospitals are constrained by lower reimbursement rates from commercial health plans, weak financial reserves, and thinner margins which equates to less marketing spend.

Studies have shown that the rate of hospital consolidation – which has more than doubled since 2009 – is driving healthcare costs up, creating worse health outcomes, and reducing services available to patients. This decrease in services is having a particularly alarming impact on childbirth as labor and delivery center closures continue to rise in the U.S., where maternal mortality rates already far exceed other industrialized nations. The negative health outcomes fueled by traditional health system consolidation will also be accelerated in 2023 and beyond by the continued acquisition strategies of non-traditional retail and big tech players in healthcare that include Amazon, Walmart, CVS, and Walgreens.

Jon Gautsch, SVP Product & Engineering at AristaMD
As a result of physician turnover, increasing care demands, and the impending recession, we’ll likely see more healthcare organizations prioritize cost management in 2023. Curbing rising healthcare costs has always been top of mind for the healthcare industry. Yet the macroeconomic turbulence expected next year will force companies to take an even closer look at how to lower overall healthcare costs while continuing to move towards value-based care and improve patient/provider satisfaction.

The recession will leave many patients in a difficult financial situation, likely resulting in delayed medical bills and elective surgeries. Yet, once nonelective treatment becomes unavoidable, we’ll then see a quick uptick in patient care, causing a strain and financial burden on our health systems. The slowdown, followed by the quick boost in care, will drive pressures on health organizations to manage costs and preserve revenue.

I predict this will present even more opportunity and demand for telehealth solutions, like eConsults, in addition to technology that can automate labor-intensive tasks and streamline traditionally manual processes. It will be a critical year for healthcare organizations to reduce the cost of care across the healthcare spectrum while not sacrificing patient outcomes.

BJ Schaknowski, CEO at symplr
In the coming year, the greater economy’s financial concerns are reflected in the healthcare industry. Budgets will remain stretched as decision-makers navigate rising inflation, diminishing reimbursements, and increased supply chain issues all while addressing staffing and burnout concerns. Increasingly, stakeholders will need to prioritize system interoperability and cost-optimizing solutions that leverage data-driven insights. Organizations should expect financial pressures to drive decision making in the new year.

Steve Wasson, General Manager, Data & Intelligence Solutions at Syntellis
Health systems restructure expenses amid margin declines: Across the healthcare industry, we are seeing significant margin declines. October saw our 10th month of declines this year, and the numbers are only getting worse year-over-year. At some point, the fever will break and leaders will experience relief with expense containment. In addition to margin decreases, we are seeing two recent months where the expense per adjusted discharge has declined as well; this shift in patterns on the expense side is due to ongoing challenges such as inflation and labor-related expenses becoming out of control.

We are seeing a shift in expense restructuring in Q4 2022 that will likely play out in the next year; healthcare organizations are in a unique position as they are unable to change their revenue, so leaders are having to negotiate structures in order to get a handle on their expenses. This also means the setting of care is changing due to revenue; we are seeing a decline in inpatient revenue due to a decrease in volume for inpatient units while outpatient care accelerates. This means we will continue to see new service agreements as part of the expense restructuring to gain efficiency and drive sustainable revenue.

New methods to address staffing shortages: In early 2022, hospitals and health systems turned to contract labor options in order to help alleviate the desperate staffing shortages that were happening nationwide. ​​However, as the demand for contract employees and staff such as travel nurses got out of control, the cost and rates for these workers skyrocketed. Though staffing shortages continue to be an ongoing challenge for healthcare organizations, we are now seeing a deceleration of contract labor rates as leaders turn to other options. Many leaders are working on creating agencies or putting different team models in place by engaging their own teams and not just looking externally.

We are also seeing a change in the way service lines are deployed; hospitals are starting to defer patients to other external providers as they can only afford so many service lines – handling a vast amount of inbounds, these providers are getting creative with the ways they handle service lines and are evaluating their processes. On the whole, we anticipate staffing to continue to be a top of mind issue in 2023, and many hospitals and health systems will look towards how they can operate efficiently with the staff they have in the next year.

Hospital M&A consolidation: 2022 was a tough year for many hospitals and other health organizations. While many demonstrated extreme resilience, we do anticipate to see a continued uptick in M&A consolidation nationwide in the coming year. For smaller health organizations that aren’t on good footing heading into 2023, they will likely face challenges in riding out an uncertain economic storm. ​​As a result, we will likely see a new era of M&A consolidation as regional hospitals join forces with other larger organizations in order to survive this uncertain period.

Clint Drawdy, Chief Executive Officer at iMethods
I predict a new cultural war of engagement that has only begun but will continue to unfold in 2023. Cost pressures will keep rising, and only the healthcare systems that are intentional in their approach to competing in this new landscape will win the battle. Culture and cost strategies are the recipe for a really healthy year, because – at the end of the day – when employees’ well-being is considered, organizations achieve better outcomes.

Amy Campbell, RN, MSM, CCCDS-O, Clinical Documentation Improvement Manager, Health Language, at Wolters Kluwer
Increased reliance on CDI specialists: There is a chasm in how a provider documents patient care and how this information is then translated into ICD-10 codes for the payer and CMS. This is leading to 631 rural hospitals across the U.S. being at risk of closing due to lack of financing. Central to this divide is the difference between clinical and coding logic. Providers spend decades learning the art of medicine but are given virtually no training in how their words are interpreted by medical coders.

In 2023, we will see growing reliance on a rapidly emerging outpatient subspecialty in healthcare, Clinical Documentation Improvement/Integrity or CDI, which has been utilized in inpatient settings for nearly 20 years. CDI specialists or CDSs will help bridge gaps between clinical practice, payers and CMS as they are uniquely positioned to read through medical records and streamline thousands of pages of content prior to a patient’s visit, making the provider more efficient and enhancing the care the patient receives. In the payer space, CDSs are quickly able to review a note for clinical indicators of diagnoses to clinically validate the condition.

John Nash, Chief Marketing and Strategy Officer at Redpoint Global
The adoption of value-based care (VBC), which incentivizes clinicians to attain better health outcomes in a pay-for-performance financial model, has great societal potential. As opposed to a traditional fee-for-service model, VBC motivates clinicians to not just run tests and make diagnoses but treat and heal patients by developing an understanding of a patient outside of a clinical setting.

The innovation spurred by VBC models will spread to the whole healthcare ecosystem, though it will spread faster with more pressure from governing agencies with incentives to do the right thing. There WILL be increased pressure on healthcare providers to improve outcomes in underserved communities specifically though. Some populations face significant healthcare barriers as their access to quality and affordable care is restricted and are facing social determinants of health barriers that in combination put these communities at greater risk.

To overcome these barriers, the adoption of technological advancements such as AI, Customer Data Platforms (Golden Record) and Engagement Hubs will be more genuinely considered with the goal of ultimately providing improved patient outcomes and moving toward the possibility of adopting a pay-for-performance model. Ultimately 80% of a healthcare outcome will be driven by actions that occur outside of a doctor’s office, and these technologies recognize that reality.

Ted Shannon, CFO at Strive Health
VBC & Increased Partnerships to Deliver Results: In the last year or two we have seen significant movement toward value based care models with healthcare organizations dipping their toes into the waters of capitation, recognizing that the reimbursement/payment model must change in order to have a transformational impact on the healthcare ecosystem that exists today.

As we move into 2023, insurers, payers and providers are fully aware of the change that is on the horizon and as a result, are looking to work with partners to help them manage risk and cost. One of my key predictions for the coming year is that there will be a steady increase in partnerships across the board. With access to robust data and multifaceted technology resources and expertise, partnerships in the healthtech space will flourish in order to deliver improved patient care and outcomes.

Carlene MacMillan, MD, VP, Clinical Innovation at Osmind
With momentum gathering for the adoption of alternative payment models, including value based care, we will increasingly see practice management platforms and EHRs trying to deliver more insights relevant to outcomes and care utilization rather than traditional fee for service claims submission.

Rob Cohen, CEO at Bamboo Health
The Benefits of Payer/Provider Cooperation Will Continue to be Realized: Currently, it’s difficult to accurately identify and reconcile open care gaps, such as transitions of care, post-treatment follow-ups and preventative care. Health plans lack an easy way to surface these gaps across the myriad of electronic health records (EHR) and care management systems used by providers, making workflow integration difficult. While we have made great strides in the past year to increase interoperability and eliminate the friction between plans, providers and patients, real-time information and analytics can still be hard to share during critical care moments.

In 2023, I believe that health plan/provider cooperation will see greater focus and results as we continue to emphasize the importance of providing better experiences and better outcomes to patients across the care continuum.

Healthcare Agenda Drives the Industry Toward the Next Level of Value-Based Care: The disconnect among physical health, behavioral health and social care has led to an ever-widening gap in health disparity. Information barriers and misaligned workflows between providers and health plans make it difficult to identify and reconcile the high-impact moments where provider intervention can further impact patient care, especially for the most vulnerable members of the population.

Looking ahead to 2023, I believe we’ll see continued adoption of healthcare IT solutions that boost care management processes to enable more informed treatment decisions and transitional plans. As a result, providers can focus on what matters most – their patients – driving the care continuum toward the next level of value-based care.

Jeff Fuller, VP of Analytics Solutions at CipherHealth
Amid the ongoing transition to value-based care, hospitals will change some of the ways in which they define success—with help from the voice of the patient. The definition of clinical success and value as well as what influences satisfaction can vary from patient to patient, so hospitals will endeavor to better understand the outcomes patients are looking for through an increasing reliance on patient-reported outcomes measures, or PROMs. With only so many touchpoints in the patient journey, hospital leaders will need to find ways to integrate more opportunities to collect patient-reported outcomes measures, and will leverage existing opportunities like on-site rounding and post-discharge outreach to do so.

Dan Trigub, co-founder and CEO at MedArrive
This year’s funding environment quickly separated the ‘good’ from the ‘bad,’ meaning businesses built with poor unit economics on day one will not survive. It also forced companies to explore other funding alternatives like Venture Debt or taking down rounds.

Founders and executive teams leaned into being more diligent with capital and planned for the worst. Digital health funding in 2023 will remain relatively the same, and very difficult. That said, great companies will still emerge and secure funding – “great” being ones that have sustainable business models.

Donald Hooker, Healthcare Technology analyst at Capital One
Despite today’s uncertainty, there’s a sense of optimism that the industry is moving in the right direction – especially as innovations and investments are being made long-term to address pain points, such as administrative burdens, a tight labor market and rising costs. These opportunities will propel our industry forward and improve the overall patient and provider experiences in key areas such as revenue cycle management, automated medical coding and value-based care.

Omri Shor, CEO and Founder at Medisafe
Investors are not pulling away from funding but are looking to support technology that has greater capabilities to do more, engage further with patients, and connect more parts of the healthcare system. In 2023, I think we will see more investments into digital health solutions that support a more connected ecosystem among patients across the spectrum.

Justin Butler, Partner at Eclipse Ventures
Investment will continue to flow into companies focused on solving the problems at the physical and digital intersection of healthcare and life science. We will see the promise of technologies that can read and write genetic material come to light, delivering many new capabilities to physicians.

These capabilities will require an entirely new class of infrastructure — from manufacturing and supply chain, to diagnostics, and digital capabilities. I believe we will see a new focus on venture capital investment into these core healthcare and life science infrastructures that bring new treatments to the world at a cost and scale that impacts millions across the globe.

Be sure to check out all of Healthcare IT Today’s Value Base Care content and all of our other 2023 healthcare IT predictions.

About the author

John Lynn

John Lynn is the Founder of HealthcareScene.com, a network of leading Healthcare IT resources. The flagship blog, Healthcare IT Today, contains over 13,000 articles with over half of the articles written by John. These EMR and Healthcare IT related articles have been viewed over 20 million times.

John manages Healthcare IT Central, the leading career Health IT job board. He also organizes the first of its kind conference and community focused on healthcare marketing, Healthcare and IT Marketing Conference, and a healthcare IT conference, EXPO.health, focused on practical healthcare IT innovation. John is an advisor to multiple healthcare IT companies. John is highly involved in social media, and in addition to his blogs can be found on Twitter: @techguy.

   

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