COVID-19 has affirmed the importance of healthcare’s pre-pandemic, in-flight, strategic investment priorities. U.S. healthcare organizations that had already invested in and executed digital priorities and strategies, from telehealth to automated operations, have weathered the pandemic well and are positioned for growth and sustainability. By contrast, organizations that lagged in digital capabilities have struggled. They must sharpen their digital focus and accelerate investments to remain competitive in the new industry normal.

Whether leader or laggard, all healthcare organizations need to double down on digital strategies because the pandemic has amplified the key trends driving them. Here’s a look at the impact of COVID-19 on five of those trends and their post-pandemic implications.

Consumers have finally made good on their claim to want digital health options by adopting telehealth during COVID-19. This wedge can widen a shift to more demand for virtual care at home and physical care offered in convenient, lower-cost settings, such as clinics and pharmacies. The future likely is a hybrid model of physical and digital care, requiring organizations to integrate in-person care, telehealth, remote monitoring and Internet of Things (IoT) approaches. This physical-digital blend opens the door to new competitors, such as Amazon Care, which already offers a tightly integrated hybrid model in Washington state. That said, payers and providers could partner with new entrants, or each other, to create hybrid care models to participate in this trend.

  • Implications for providers: Providers will need care-anywhere capabilities, cognitive telepresence and a range of patient engagement and experience solutions, including digital self-service and next-gen contact centers; coherent digital front door strategies; and easy payment options. Additional tactics include digital waiting rooms, self-service portals and integrating pharmacy workflows.

  • Implications for payers: Digital health services and care-anywhere access must be integrated into provider networks, benefit designs and product strategy. Payers should develop incentives to encourage the formation of hybrid care models. Organizations also will need health intelligence platforms to digest data streams from in-home devices and wearables so they can develop individualized care and intervention plans. We see clients adopting digital-first strategies and automating processes whenever possible to improve experiences and reduce costs.

The pandemic likely will accelerate healthcare’s consolidation — just as it is doing in other industries, where well-capitalized companies can purchase struggling competitors. Post-pandemic winners will buy smaller health plans and provider practices. Larger healthcare organizations with diversified lines of business may merge to combine their strengths, as in the case of Intermountain’s merger with Sanford Health. Some organizations will invest in and monetize software capabilities to become tech companies. Others will integrate on horizontal lines to deliver large-scale “whole person care” in the race to capture and keep consumer/member lifetime value. That may lead to more “payvider” models, with coverage and care under a single brand.

  • Implications for providers: Expect to compete against large integrated health systems that have the national or regional scale to create standardized, high-quality “McHealth” care delivery. More large providers could buy or launch insurance arms to provide full-service care and coverage.

  • Implications for payers: Payers diversified across commercial, Affordable Care Act (ACA), and managed Medicaid and Medicare Advantage lines of business can help their members transition among different plans as their life needs and stages change. During the pandemic, some individuals have lost employer-sponsored coverage in commercial plans but qualified for Medicaid or ACA plans. Payers with products in those lines were better positioned to capture or retain those members’ business. Organizations will need analytics capabilities to identify members in transition, and customized marketing tactics to reach them.

The pandemic exposed the downside of fee-for-service models when fearful consumers deferred their care in droves. A concerted shift to outcomes-focused, value-based care is the silver lining. Providers with value-based care contracts have had recurring income streams; this fact is driving greater provider interest in value-based models. Some payers, such as Blue Cross of North Carolina, are accelerating value-based growth by making prepayments to providers contingent on outcome-based program participation

  • Implications for providers: Value-based care will require providers to invest in analytics and more sophisticated revenue cycle tools to manage the risk they will assume under outcomes-based contracts.

  • Implications for payers: Health data analytics and interoperability solutions across payer-provider lines will be required to deliver predictive, personalized care that is critical to success with outcomes-based business models.

COVID-19 has had an outsized impact on populations with chronic conditions, especially COPD, congestive heart failure, diabetes and hypertension. Persons with economic challenges and other SDoH factors also suffered unduly. These sad consequences have validated current and future investments in addressing SDoH and emphasized the well-recognized need for more effective management of chronic conditions. 

  • Implications for providers and payers: Increased data sharing and care management collaboration across organizational boundaries, such as that made possible by interoperability, is necessary to successfully address SDoH, improve outcomes and reduce industry costs.

Even in the midst of the pandemic, Walmart continued to roll out its new full-service clinicsAmazon introduced its first wearable, and merger-and-acquisition activity signaled continued disruption (as when telehealth company Teladoc acquiring Livongo, a remote monitoring player). Far from slowing business and care-delivery model disruption in healthcare, COVID-19 has accelerated it.

  • Payer and provider implications: Organizations should leverage their incumbent status with new industry entrants. Healthcare has complicated and wide-ranging regulations, a complex value chain and unique safety issues. New players will need the experience and expertise of established healthcare organizations to navigate these. That said, incumbents seen as the most valuable partners will have strong interoperability foundations and thrive on innovation and change management.

Reshaping operations and creating resilient new business and care-delivery models in response to these trends requires payers to build new core competencies in the following areas:

These six competencies are tightly intertwined: an organization cannot, for example, deliver intelligent personalized experiences without interoperability, data management and digital capabilities built on modern IT infrastructure. This may prove challenging to organizations dealing with their share of the cumulative $323 billion in provider losses due to COVID-19.

Meanwhile, deferred care and electives have helped the seven largest publicly traded insurers report combined profits of $17 billion in the three months ended June 30, an increase of roughly 79% over the same quarter in 2019. Neither huge losses nor great windfalls are sustainable. We have seen indications that payers and providers recognize that by collaborating, they could more effectively deliver the care, experiences and affordability healthcare consumers demand. Put another way, they would get more return on their digital investments working together — which would help drive the best from these worst of healthcare times.

This article was written by Bill Shea and Andrew Cohen of Cognizant’s Healthcare Consulting practice.

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