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Al Ansaar Hospital - For Health Care Providers, Five Trends To Watch In 2022
For Health Care Providers, Five Trends To Watch In 2022
February 8, 2022
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Today’s environment is one of two narratives: On one hand, there’s optimism as more Americans receive vaccines and resume in-person interactions. On the other hand, people are frustrated as the pandemic drags on with new variants and mixed guidance, and the return to normal is stymied by price inflation and supply chain disruptions.

For health care professionals, balancing the positive and the negative is an even greater challenge.

For this community, the pandemic’s effects are far from over. The virus will continue to affect all care settings for the foreseeable future and will continue to shape major decisions. For most health system providers, this means there are no more discussions of a “post-COVID” operating environment. Instead, the job is about managing the virus to minimize or eliminate the disruptions it can cause.

At the same time, COVID-19’s lasting effects exist within a macro environment of increased competition and movement toward value-based care. Despite the pandemic, billions were invested in startup companies built to take risk, leverage telehealth and apps, and deliver more cost-effective primary, home and specialty care—capabilities that got turbo-charged during the pandemic. In fact, in 2020, nearly $15 billion was invested in digital health and other technologies designed to disrupt traditional providers in the quest to provide lower-cost, higher-quality population health. In 2021, that figure jumped to more than $29 billion. These companies continue to disrupt fee-for-service by innovating targeted care delivery and services, winning loyal payer partners and patients alike.

Taken together, big changes are on the horizon for many operations critical for ongoing pandemic response, including modernizing supply chain operations and technologies, addressing health disparities, and improving efficiencies to improve the work lives and health of employees. Combined, the net effect is an environment that is more complex than ever before as providers continue to treat COVID-19 cases while working to implement large-scale changes in a variety of areas.

While challenging now, these changes ultimately are long overdue and largely positive for the industry. When complete, the nation should have a much more modern and resilient health care system, one that is more innovative, efficient, and effective.

What follows are the five main trends that could usher in future change for providers and some recommendations about how to embrace the changes ahead.

The Freights Of Wrath

Empty store shelves, longer lead times, and higher prices characterized the supply chain in 2021, where large-scale disruptions spiked 67 percent and affected virtually every aspect of commerce. Throughout the year, the supply chain dealt with raw material and labor shortages; manufacturing and quality problems; and shipping, transportation, warehousing, distribution, and “last-mile” delivery debacles. Today, the nation is still experiencing a broad array of global, macro-level issues that, layered together, create bottlenecks in a system not designed for such demands.

Although Congress passed a $1.2 trillion bipartisan infrastructure package that includes provisions to improve the ports, railways, and roads that caused some of the supply chain disruptions of the past year, the problem is frankly much bigger.

For 2022, supply chains will be forced to modernize and adapt to become more resilient. Broadly speaking, this means implementing two overarching strategies: creating greater diversity of supply sources and moving away from just-in-time ordering, and digitizing and tech-enabling operations to provide more real-time visibility.

As predicted last year, there remains great interest in supply chain diversity and increased onshore/nearshore production that gets around port congestion and long shipping lead times (six weeks or more for containers ships coming from Asia). As of early 2021, 65 percent of retailers had already expanded domestic sources of supply—with 24 percent establishing this capability for the first time.

For medical supplies, the government implemented a regulation increasing what government purchasers such as the Strategic National Stockpile (SNS), the Veterans Affairs, and the Department of Defense buy from domestic sources, creating a steady, predictable demand for many low-margin, critical care products. The private sector augmented these efforts with investments of its own. For instance, in 2021, Premier—a leading technology-enabled health care improvement company of which I am president and CEO—and its members made investments in and committed purchasing from Honeywell for the domestic production of gloves and Exela Pharma Sciences for generic drugs. These kinds of efforts are starting to bring back US manufacturing and will continue to expand in 2022, particularly as the government implements plans to prepare for future pandemics.

Tech-enablement will be a tougher nut to crack. Today, very few supply chain operations are tech-enabled because upstream information is hard to come by, while the data that are available are siloed and rarely shared with trading partners. In fact, estimates suggest that most manufacturers are only aware of about 20 percent of their upstream supply chains for raw materials and the chemicals that make them. When purchasing demands were predictable based on historic trends and distributed evenly across buyers, this was less of a concern. But increasingly, demand is becoming unpredictable due to volatility in weather, natural disasters, disease outbreaks, and human events such as labor strikes or terrorist attacks.

In 2022, buyers will put more pressure upstream to collect data on sources of supply, enabling greater visibility and the potential to risk score providers based on product availability and other risks. Similarly, more purchasers will look toward enterprise resource planning tools to get better, real-time signals on upticks in demand and order-to-fulfillment times for early indications of backorders and shortages. Last, more trading partners will turn to the power of big data and artificial intelligence (AI) to make smarter and faster predictions about future supply needs, allowing for much better advanced planning and preparedness, as well as cost management to ensure competitiveness and success in value-based care models.

Also in 2022, the federal government will need to work more collaboratively in partnership with group purchasing organizations, distributors, manufacturers, and clinicians to identify essential products that must be stockpiled and to create supply chain expertise for management of the SNS. This is particularly needed given the fact that in the early days of the pandemic, the SNS was riddled with outdated, expired, antiquated, and otherwise unusable inventory. Once built, the management of disaster preparedness plans also needs tech enablement, with capability for decision makers to “flip a switch” in an emergency to gain a window into inventory levels for critical products, enable dynamic allocation, and prevent hoarding.

Pandemic, Poaching, And Pay—Oh My!

If the first phase of the pandemic was all about the supply chain, the latest phase is completely focused on labor. I have often said that after the loss of life, the second biggest tragedy of the pandemic is the toll taken on the health care workforce. In late 2021, PINC AI data found that clinical workers were already working harder and putting in 50 percent more hours than they were before the pandemic (and this was before Omicron arrived in the US)—all under stressful conditions that put them at increased risk of contracting COVID-19 themselves.

This strain has pushed many frontline care givers to the breaking point.

As of late 2021, about one-third of all clinical employees had quit their jobs, nearly double the rate from two years ago. To retain valued employees, providers have been dipping into their wallets, increasing pay for qualified nursing staff by more than 12 percent.

But even this has not been enough to provide adequate COVID-19 care, and many hospitals have had to turn to staffing agencies and travel nurses to fill the gap. Unfortunately, some are taking advantage of the situation. According to a letter submitted by a bi-partisan group of senators and members of Congress, “nurse staffing agencies are vastly inflating price, by two, three or more times pre-pandemic rates, and then taking 40% or more of the amount being charged to the hospitals for themselves in profits,” even going so far as to poach clinical nursing staff and encourage employee churn in an effort to capture more billable hours.

For 2022, I expect that health systems will need to invest in staff planning and community development of clinical staff to manage these increased costs, as well as burnout and turnover among caregivers who have been on the front lines for nearly two years straight. This will be exacerbated by 500,0000 nurse retirements expected in 2022, which will further reduce the nursing workforce while the new talent pipeline remains stagnant.

To manage the shortage, providers will look more aggressively to recruit international labor, where as many as 10,000 nurses are waiting in limbo for final State Department clearance to enter the country, and many more may welcome the opportunity to take a US job in 2022. There are also provisions in the Build Back Better legislation to support clinicians entering the workforce, such as loan forgiveness for medical education, incentives to work in underserved regions, and more funding for hospitals that provide graduate medical education.

While these efforts will certainly help, they are not enough on their own. The long term requires providers to reconfigure processes and weed out inefficiencies—not just to free up scarce resources for patient care but also to cover the added $24 billion in unreimbursed salary expense that is required to remain competitive in today’s market. Managing these expenses is critical not just to margins but also to ensure competitiveness against new entrants and success in value-based care models that are forcing efficiencies and cost accountability across health care.

Increasingly, this means eliminating all tasks that could be delegated to non-clinical staff and technology-enabling processes that are eating into nurses’ time. For instance, research has shown that nurses spend more time documenting, coding, and reviewing information in the (electronic medical record) EMR than they do on patient care (59.78 minutes per 4-hour block versus 58.71, respectively). That time should be shaved down with better EMR functionality and better clinical decision support apps that overlay the EMR, which I believe will be a major investment area in 2022. Not only will this relieve an in-demand workforce, but it should also improve overall work satisfaction, as nurses generally feel more professionally rewarded when they are able to perform more direct patient care duties.

In addition, providers will also need clean data and analytic tools to benchmark against peers and identify outlier areas that may be creating bottlenecks and limiting throughput, as well as predictive analytics to determine in advance when staffing levels may run low to support proactive hiring and training.

Bonfire Of The Inefficiencies

A corollary to the labor problem, 2022 will also be a year of tech-enabling manual processes that waste time, create inefficiencies, and contribute to unnecessary costs, particularly back office and administrative tasks.

For a case in point, consider the accounting department. In health care, accounts payable and accounts receivable is riddled with manual processes and paper documents that create opportunity for error. Today, Premier purchasing data indicate that about 85 percent of all health care purchasing tasks are done manually, using paper checks. Not only does this result in $4–$6 billion in erroneous payment and invoicing errors, but it also wastes nearly $40 billion a year in transaction fees and other inefficiencies. Moving to electronic invoicing and payment—common in every other area of commerce—can yield almost immediate savings. For instance, Premier member Baptist Health South Florida moved to electronic payments and identified 2,400 pricing errors and overcharges worth more $7 million in unnecessary expense just looking back over a 180-day period. Similar savings may also be possible across other settings of care, such as nursing homes or large physician practices that do high-volume transactions.

Another area to pursue is automating administrative tasks necessary for reimbursement. Accurate documentation and coding, for instance, is essential in a world of risk-based payments, where incomplete diagnoses can mean inadequate payment to cover the needed care for a patient or population. Identifying these gaps and tech-enabling the right prompts during the patient encounter to ensure all appropriate diagnoses are captured can help match reimbursement to patient care expenditures. Equally important, this essential task can be automated to ensure accuracy and save hours of time in documentation and coding paperwork.

Finally, automating claims transactions and prior authorizations is another massive time and labor saver. According to the Council for Affordable Quality Health care, automating provider and health plan interactions by moving to fully electronic transactions could save the system $16.3 billion a year—shaving more than $6 off provider labor costs for each transaction while simultaneously speeding time to care.

Considering that hospitals are projected to have lost $54 billion in net income over the course of 2021, and nursing homes are not far behind with $34 billion in losses, it’s impossible to ignore the savings potential of back office and administrative technologies. This is why 71 percent of provider executives said in 2020 that they planned to make major investments in technologies that automate administrative functions, up from 47 percent in 2019. For 2022, we predict that health systems will make massive leaps in pursuing automation, tech-enabling purchasing, accounting, payer interactions, customer service, and more.

Dystopian Disparities

The pandemic shone a bright light on a pervasive problem in health care: the uneven public health and health care needs of different communities and populations. Specific to the pandemic, data show that people of color were more likely to contract COVID-19 than Whites and were also more likely to suffer adverse outcomes, accounting for 63.2 percent of all COVID-19 deaths. These results are in part a byproduct of social determinants of health, which can have a profound effect on health outcomes (not just those attributed to COVID-19). Addressing these gaps have plagued providers for years and have largely been perpetuated by fee-for-service reimbursement, which does not compensate for population health—effectively ensuring it won’t be addressed.

However, the other side of the coin is that as we move to payment models in which providers are accountable for the total cost and quality of care for the serviced communities, providers in underserved and vulnerable areas are inherently at higher risk, as they are expected to achieve results that mirror the national averages with populations that frankly need more and more intensive services. This risk is one of the reasons that fewer safety-net hospitals participate in alternative payment models. If left unaddressed, this could create yet another disparity in which some communities get the benefit of a team-based, population health approach, while others get left behind in fee-for-service and sickness-based care. Even more troubling, failure to act could lead to “cherry picking” on the part of insurance companies that completely abandon certain markets in favor of more lucrative alternatives.

The solution is understanding and factoring social determinants into both health measures and reimbursement. However, few organizations conduct standard screenings for social needs and even fewer have a standardized approach to documenting those needs in the medical record. Without baseline data and free flowing information, there is no real way to incorporate this data into measurement and payment at the macro level nor is there a way to evaluate a social needs program’s effectiveness or return on investment at the system level.

In 2022, providers will need to harness technology to capture social needs data more reliably using tools such as natural language processing (NLP) to capture key indicators found in free text. Already, research has found that NLP techniques were effective at extracting socioeconomic data by mining free text notes or other data such as ZIP codes, appointment records, payment patterns, and so forth, harvesting the information in a structured, consistent, and reportable fashion. When coupled with AI technologies, providers can start to develop analytics that predict social needs and overall health risk to enable appropriate actions that have meaningful impact within alternative payment models.

Similarly, closing gaps also requires data on health disparities and how treatment (or lack of treatment) affects different populations with the same medical conditions. For instance, Premier data on maternal health outcomes prove that Black women are 84 percent more likely to experience a serious complication or adverse event when they give birth than their White counterparts. Addressing this requires understanding the root causes and testing new care protocols across broader populations of women, including women of color—a feat Premier hopes to achieve in 2022 as we work with the Department of Health and Human Services to improve data-driven approaches to maternal care.

Similar gaps must be closed in terms of access to preventive and primary care, where there remain double-digit percentage gaps between Whites and people of color in reported use of a regular physician, use of recommended preventive care, and adoption of healthy eating patterns.

Last, providers in 2022 need to take steps to address gaps in evidence-based care delivery. In aggregate, the National Academies of Medicine found that people of color are less likely than their White counterparts to receive evidence-based kidney dialysis or transplants, cardiac care, or the best care for stroke, cancer, or AIDS. Prescribing patterns also differ, with White patients receiving access to better, newer medications than people of color. Many of these practice differences can be corrected using clinical decision support systems that hardwire the evidence into the workflow, forcing clinicians to document exceptions with good reason. This data collection is critical to improving care and ensuring reimbursement in population health payment accounts for both the clinical care and social risks of a population.

Lifestyles Of The Smart And Wired

Underpinning every trend I’ve discussed so far is artificial intelligence—to make supply chain demand predictions, extend labor, save time and money, remain competitive against new disruptive entrants, and mine for missed opportunities. This is why I’m predicting that 2022 is the year that AI makes major inroads in health care.

Historically, health care has been slow to embrace technology, in part because care requires a human touch, but also because many technologies foisted upon providers have a terrible track record of performance. For proof, one need look no further than the disastrous implementation of EMRs, which continue to underperform and serve as a source of frustration more than a decade after install.

But while tech enthusiasts have pushed AI and been wrong in the past, I think this year presents a different fact pattern. For one, the pandemic increased acceptance of technology as part of care, as more visits moved to virtual environments and providers turned to data models and predictive analytics to scenario plan for resources and other needs based on projected case counts and other factors. For another, the march toward value-based care continues to accelerate unabated, and AI-enabled capabilities are simply becoming table stakes for any provider group that hopes to remain competitive with disruptive upstarts that are already using technology to enhance and customize the care experience.

For another, the pandemic highlighted real need. When resources and time were so laser-focused on COVID-19 care—a totally understandable prioritization—other areas slipped. For instance, after years of declines in the rates of health care-acquired infections, rates spiked during the pandemic for bloodstream infections (up 47 percent), MRSA infections (up 34 percent), and urinary tract infections (up nearly 20 percent). This uptick can’t continue indefinitely and is largely preventable with AI-powered infection prevention programs to monitor patients in real time and proactively flag those at risk. For instance, one study showed that sepsis care dramatically improved (almost two hours faster to antibiotic treatment) when enabled with an AI-powered clinical decision support system.

The pandemic also created a budgetary crisis that makes AI impossible to ignore. Overall, AI-enabled applications in health care are expected to shave $150 billion off the nation’s health care expenditures by 2026 through increased efficiencies, avoided adverse outcomes, and reduced labor costs. Given the current shaky nature of most health systems’ balance sheets, these savings are essential for continued competitiveness for value-based contracts—key to future survival.

Finally, AI is needed to keep up with the pace of change. Today, a new scientific study or research article is released every 26 seconds. If a physician read and retained two of these articles every single night, at the end of a year, they’d still be about 1,000 years behind the current evidence. Add to this the advancements being made in personalized medicine, where evidence is built not just around a condition but down to the individual genome, and it’s impossible for any care practitioner to keep pace. In such an overloaded environment, providers have no choice but to augment intelligence with machines that are better able to sift and parse through all that data, serving up the most actionable insights to the human practitioner at the point of a decision.

This is why AI in health care is expected to grow from a $6.9 billion market in 2021 to a $67.4 billion market by 2027. For 2022, I believe most providers will build foundational capabilities in AI—building business intelligence and analytics systems to assist with measurement, evaluation, and predictions of future outcomes, as well as clinical decision support integrated into the medical record to prompt evidence-based care.

Good health is indeed one of the most cherished assets in a person’s life. Protecting and nurturing it is the prime responsibility of every individual.