Rae Woods (00:02):
From Advisory Board, we're bringing you a Radio Advisory. Your weekly download on how to untangle healthcare's most pressing challenges. My name is Rachel Woods. You can call me Rae.

(00:13):
Last week, we released the first part of our series on what CEOs need to know in 2024. We talked about the snapshot of industry performance and how we're seeing declining quality at the same time as increasing spend. We also talked about how purchasers are responding. You might think that those challenges for the C-suite to tackle in 2024, but I am sorry to say you would be wrong.

(00:40):
Even as executives battle all of those near-term challenges, the tectonic plates of healthcare are shifting, and we are watching as seismic shifts threaten to change where care is delivered, who actually delivers it, and what that care is and how we finance it. So I've invited back our three Advisory Board experts, Natalie Trebes, Prianca Pai and Sharon Yuen.

(01:02):
Prianca, Sharon, Natalie, back for more. I guess, you're back for more because I made you come back right away.

Prianca Pai (01:11):
We've been blessed.

Natalie Trebes (01:13):
You're just so fun, we have to hang out.

Rae Woods (01:16):
I'll take that as a win. But the truth is, is that y'all had just too much to say and we needed to come back for more immediately. Let's reflect on that for a second.

(01:29):
Last week, we really focused on what we think the future of healthcare could look like. There were all these shifts happening, but we stopped at the first big shift, which was all about where care is being delivered. Reminder to check out that episode, if you haven't done that already. What are the other two seismic, paradigm level shifts that we need to be focused on?

Sharon Yuen (01:52):
The two other paradigm shifts we really want to hit on today are who delivers care, and then ultimately, how do we pay for that care?

Rae Woods (02:00):
Let me admit that we've actually already talked a lot about both of these topics on Radio Advisory. If I reflect on at least the episodes that we did in 2023, we had to talk a lot about AI, for example, because of the rise generative AI and ChatGPT. I feel like it's this perfect storm of the rise of this new innovation in technology, at the same time that the industry's workforce challenges persist.

(02:28):
Again, roll the tape forward for me. What do we envision the end state to be, in terms of who is delivering care and the role that AI plays in that?

Natalie Trebes (02:39):
I think we've had a labor obsession in healthcare, where we always are throwing more staff at problems and that is how we solve problems in healthcare. We know that, today, that is untenable, and looking to the future that's impossible when we think about the pipeline.

(02:57):
The future we're heading towards is not just one where technology's integrated into workflows and working with the care team, but one where we really dig into what is the role that only a human should do, and then push as much as possible to technology. So making care teams actually dependent on technology, dare I say a compliment to technology, so that they are really only doing what a human should do.

Rae Woods (03:24):
I'm going to ask a bold follow-up. Clinicians as the compliment to technology. Could we have called this paradigm shift not who is delivering care but what is delivering care?

Natalie Trebes (03:38):
AI is not sentient, Rachel. I think I would probably say who and what are delivering care, because these should be in compliment with each other. Clinicians can do a lot of things, and especially when we think about nurses in particular, that's the catch all in healthcare. What we really need to do is scope their role, that is what we mean when we say clinicians will be a complement to technology. It's not that they are playing second fiddle, it's that technology should be doing so much for them and they are very focused in their role.

Rae Woods (04:16):
I can feel the blood pressure of our listeners coming down as you caveated that end state. I think the reason why this is something that sparks a lot of questions, sparks a lot of fear is because there's still more questions than answers when it comes to actually embedding AI in care delivery. I don't think anyone would disagree with the idea that technology needs to enable the care team. Yes. That needs to happen as fast as humanly possible, or it's happening in cases already. We've talked a lot about that on the podcast, and how to nail some of the basics and the essentials.

(04:52):
But let's talk about the executive role, the leader's role. When it comes to embedding AI in care delivery, when it comes to moving us towards this future of the tech-enabled care team, what are health leaders still missing?

Natalie Trebes (05:10):
I think we've talked about what are the tasks, you mentioned that, I think the things that leaders really need to be paying attention to, in addition to the task mix, is training and compensation. Where does learning actually happen for clinicians, as we move to this tech-dependent future?

(05:30):
I think a lot about how medical education happens, and it is an apprenticeship model. Where you go, you watch a lot of things, you experience mass quantities of the same event, over and over, so that you're seeing everything as you train up in your role. If we are shifting more and more pieces of that to technology, how does that experiential learning happen and how do we shift that?

Prianca Pai (05:56):
I think what Natalie said around compensation probably is the one that perks everyone's ears, and I think the one thing is we are probably going to see an acceleration of trends that are already occurring. A lot of this isn't new, it didn't start with AI. We were already asking physicians and clinicians to do more outside of the direct patient encounter for years now. Just think about in-basket messages, we adopted that technology, we asked clinicians to do more. We might see this acceleration and this push away from productivity based compensation to new models that we already had been whispering and talking about. Rae, I know you've talked about a while, when you've talked about medical group compensation and things like that.

Rae Woods (06:32):
Oh, you're giving me a blast from the past.

Prianca Pai (06:32):
Yes.

Rae Woods (06:33):
Shout out to my old research, Prianca. What is with that?

Prianca Pai (06:40):
I think those conversations are going to hopefully start again, and I those are conversations that we never really got to have, and hopefully now we get to have.

Rae Woods (06:47):
Let's be honest, these are the harder conversations to have.

Prianca Pai (06:49):
Absolutely.

Rae Woods (06:50):
Where folks focused on, last year, was the task mix. Who does what, how much time does it take, what do we stop doing? Good. This is stuff that we want folks to do. But what you're describing is how technology will fundamentally change roles and the difficult decisions that very real leaders will need to make, in terms of not just who does what but to Natalie's point, where the learning happens. And, Prianca, to your point, in terms of how we actually value and compensate that work.

(07:25):
What I did not hear you say, and I think what we're comfortable saying, is that technology is not going to replace humans. That's not the future of healthcare. Are we right?

Prianca Pai (07:34):
Absolutely. Not replacing humans, just making them better at what they want to be doing.

Rae Woods (07:39):
Yes. And just changing their roles.

(07:42):
A lot of our focus on the future is really about AI and the workforce. But, I want to nod to the fact that there are other impacts that we are expecting AI to have. What are the intended benefits? Maybe, what are the unintended risks that we need to anticipate, as we think about the future of technology in our world?

Prianca Pai (08:02):
I think we already know that often perpetuates existing biases, and that includes perpetuating existing industry challenges that we've already had. So I think those challenges are going to become more and things we should be paying attention to at a bigger level.

(08:17):
I think one, the have and have-nots. As we see wealthier organizations invest in AI earlier, how is that going to skew datasets? If an AMC is investing a lot, we're going to have more AMC data that might not be representative for other health systems. Will we see wealthier organizations become even more efficient? And then, how does that then have ripple effect on the clinician level?

Sharon Yuen (08:37):
Something to add here is that there's the risk of replicating these existing challenges and inequities that already exist throughout the healthcare ecosystem. One thing that comes to mind is the fact that you could be training models with datasets that don't actually adequately represent the patient populations you want to serve, and that might inadvertently reinforce these health inequities we're concerned about.

Natalie Trebes (08:59):
I think about the business impacts of just changing dynamics, in terms of who has potentially new power or changing contracting. So are we relying more on vendors, as we have to mine through data and augment our care teams, does that shift who all is involved and how the healthcare system runs? And do they have more touchpoints into patient care and influencing patient pathways? There's a lot of doors that this opens to who is involved in patient care decisions.

Rae Woods (09:31):
Clearly, a lot of risks. But I want to be clear, none of us are saying that opting out is an option. Opting out is not an option when it comes to technology, it's not an option when it comes to artificial intelligence or when it comes to generative AI specifically. AI is here, it is here to stay. It's going to be part of our future.

(09:51):
I feel like, instead, the right question to ask is how do our listeners, how do real health leaders anticipate, maybe even mitigate some of the risks that you just named? What do you want our listeners to be watching for? When it comes to this transformation of the care team, and in who and what is delivering care.

Prianca Pai (10:13):
I think it's thinking about AI and some of these technology adoptions as different from your tried-and-true technology adoptions you might have been doing a year or two ago. And thinking about the specific challenges that are going to be coming up. So it's not just the change management, it's not just the workflow, it's actually taking the time to prepare patients, and clinicians, and the staff to adopt these new technologies in a way that we haven't spent time before.

Rae Woods (10:38):
Yeah.

Prianca Pai (10:39):
I think it's actually doing the hard work, and looking at the data management and the governance. So we don't have huge headlines around data bias, and privacy, and liability. I think it's those things. I think it's the infrastructure, the underground work that needs to get done.

Natalie Trebes (10:57):
Yeah. This is the time to move out of the silos and into the holistic, let's take a look at our entire technology infrastructure and how it fits together as an organization.

Rae Woods (11:06):
This is also a good time to remind health leaders that it's easy to think of the future of healthcare as the sexy stuff. But your role is actually maybe in the minutia, it's in the details. It's in the governance. It's in how do we get out of our silos. It's in the work that it's going to take to make sure that this is not something that just happens to you, and all those risks you named become realities, but in something that actually becomes a viable, positive path for the future.

(12:31):
I want us to turn to this last seismic shift, which is all about how we pay for care. The actual treatments that we're giving to patients and the economics behind it.

(12:45):
This reminds me of another big topic that we talked about a lot on the podcast last year, which is drugs. Those high cost drugs, those ultra-high cost drugs. I am guessing you're going to tell me that this is the most important thing to be focused on in 2024? Or is my own anxiety coming out, for all of you right now?

Prianca Pai (13:05):
I know that you're anxious on drugs, but honestly, it's not just drugs. It's a much larger trend we need to be paying attention to. I know Advisory Board adds all these new words to our lexicon, but there's a new era that I want us to be paying attention to called bespoke care.

Natalie Trebes (13:20):
We think of bespoke care as the set of innovation in treatments, diagnostics, technology that are actively tailored by a specialized provider, or set of specialized rather, to individual patients. I think there's a few things that are important to think about here.

(13:40):
So the active element of the tailoring. Someone is doing it, it's not just that it's automatically personalized. A lot of different providers, and specialists, and life sciences companies, and payer care managers need to come together to make this work, so it's very complex. It can happen over a longer period of time. We are shifting out of our very neat and clean episodic care, that will still happen, but this bigger portfolio of what we're calling bespoke care is all of this personalization that happens on this longer time horizon.

Rae Woods (14:17):
This sounds expensive. We're using the word bespoke. Not just personalized, not just customized or tailored care. The word bespoke, for me, always sparks ... It makes me think about fashion, it makes me think about a bespoke gown, a bespoke suit. That's a lot more expensive, it takes a lot more time. It takes a lot more tailoring, in a different way, than if I'm just going to pick something off the rack. I'm guessing that you're going to tell me that all of that personalization and tailoring is good for clinical outcomes, but that also means a big shift in how the heck we pay for it. How will our business change if it is defined by a shift from episodic, procedural to bespoke care?

Natalie Trebes (15:09):
Well, I think the outcomes part is important to keep in mind here. When we think about, to go back to fashion, you think about a bespoke suit, that's going to be a higher quality, it's going to last longer. There's an argument to be made that you might actually, ultimately in the long run, spend less by pursuing that because you're going to have that better quality outcome in the suit performance. It's worth that investment. It's just a question of can you make that investment all at once? Who is the one fronting that? And how do we extrapolate what you're getting out of that, to the right organizations and individuals?

Rae Woods (15:46):
So far, this is not giving me any less anxiety. In part, because we're still talking about things that are very, very expensive. But also, because we are just talking about something that is very different from the way that today's healthcare system is structured.

(16:00):
In last week's episode, we talked about how healthcare is historically built around hospitals. Well, healthcare is also historically built around procedures. How is the business going to change, if that's actually no longer the case? And we can't just think about discreet episode over episode.

Natalie Trebes (16:20):
Yeah. When you compare them, there's a couple, or a few ways that I think bespoke care looks different from our legacy episodic, procedure-based infrastructure. The delivery of the services, and the treatments, and the wraparound care that goes on around it is going to be much more expensive, there's a lot more options. You're going to have to manage patients over time.

(16:46):
The way that we manage costs in episodic procedures versus this world of bespoke care is going to look different, because the comparison of cost and quality is going to be harder. If we're talking about procedures that are meant for as many people as possible and are pretty standardized, that's easy to look across all the surgeons and see how much does it cost, and what are their quality scores, and how many surgeries have they performed. When we think about bespoke care, that's personalized, so how are you comparing exactly each of these individuals? And how are we going to even estimate the costs when there's so many different intricacies for how drugs are paid for and financed?

(17:27):
And then, I think that's the big bucket. Over time ... We're not talking about a 30-day time horizon here to figure out the costs associated with everything in that episode. We could be talking about five years, 10 years, longer. It's a huge time horizon to think about what are all the payments inside of that and who needs to bear them.

Rae Woods (17:49):
Moving to a healthcare business that is defined by drugs, that's defined by this bespoke care, that's going to impact other strategies that our very listeners, our health leaders have. The one that comes to mind for me, based on what you just said, Natalie, is all of the work that we've done in things like value-based care and care variation reduction. Those are not fit for a world of bespoke care and drugs, they're fit for a world based on procedures.

(18:19):
I got to say, this is perhaps the paradigm shift that, at least in the conversations that I have with health leaders, this is the one that the industry is the least prepared for. Is that the temperature that you're getting? At least, when I reflect on the other big shifts we've been talking about.

Sharon Yuen (18:35):
Definitely. I think the way that stakeholders are reacting today is not necessarily enough. I think, first off, we're seeing purchasers really turn to old tools, things that have worked historically, like formulary exclusions and utilization management. But as we move forward, we're going to see that that just won't be enough. We're going to see a lot more experimentation.

(18:56):
For instance, we're seeing some large PBMs actually start to offer these carve-out models for specific cell and gene therapies. One that comes to mind is Express Scripts Embarc Benefit Protection Program, which helps protect against the costs of cell and gene therapies, for an additional per-member-per-month charge, and that actually doesn't add on any extra out of pocket costs to the patients. That could be a very attractive sell.

Rae Woods (19:21):
I completely agree with you. We have to see more experimentation, more innovation. We have to accept that, while we can turn to a lot of old tools, they will also not be enough to meet this dramatic change that we're talking about when it comes to the way that we deliver care, what that care actually is, and of course, how we'd pay for it.

(19:42):
A repeating theme that we've talked about across the last two episodes is that, while yes of course we need to roll the tape forward, we need to look at what the future of healthcare may be, whether that end stage is neither good nor bad. But what all executives need to do is look at and anticipate the consequences that those changes may have. What are those ripple effects that we need to make sure executives are paying attention to, when it comes to bespoke care and an industry defined by drugs?

Natalie Trebes (20:14):
I think, really, it's not that complicated in that it really just exacerbates a lot of the evergreen challenges that we have. We have already got two-tiered or multi-tiered patient access. A lot of where you work influences what your insurance coverage looks like and how generous it is, so what your access is. Or where you live influences what the infrastructure that's available for you is.

(20:42):
Payment transformation, a shift to value, that is not something the industry has had a lot of ease with. Consolidation being something that's a big force in the industry. Those are things that exist, and when we layer this shift to bespoke care and all the forces around that, it makes them this harder. Your employers are going to be making very specific targeted decisions about exactly which drugs, as Sharon talked about, which PBM specialized carve-out model they're going with, that's going to influence what patient access looks like. Which providers invest in what infrastructure that they're prepared to deliver different treatments is going to effect patient access.

Rae Woods (21:25):
You're clearly an optimist because you said it's a good thing that it's just all of our existing problems. The pessimist in me has to, of course, name the fact that you're talking about existing challenges that we haven't been able to solve, that could potentially get worse.

(21:40):
But I wonder if the more actionable guidance we can give to our listeners is to tell them what they should be focused on in their market. I feel like a lot of the conversation is about what's happening at the national level. This huge pipeline of drugs, the cost of these drugs, which we know we can't look at as one big behemoth. But what should leaders be watching for that's more specific to them, when it comes to their progress on what they should be focused on, when it comes to this path towards bespoke care?

Prianca Pai (22:08):
In my opinion, it's employer coverage decisions because those decisions today are going to be the defining precedent for the industry's adoption of bespoke innovation. Employers are going to have to weigh a lot of different things. They're going to have to weigh the cost pressures, while also trying to minimize employee disruption. Of course, these coverage decisions are going to vary greatly, from employer to employer. And again, like most of healthcare, everything is intertwined so those coverage decisions are going to depend on what health plans do, what PBMs do, what life sciences firms do.

Rae Woods (22:41):
Ah, so we need to watch the employers. That is not a stakeholder that we typically name as being at the front of an executive's to-do list, when it comes to watching what can happen next.

(22:53):
That's a good reminder for me that, over the course of the last two conversations, we've really framed these episodes around the perspective of the CEO, the executive, what they need to learn, what they need to watch, what they need to do. But you're reminding me that there are a lot of other stakeholders that are going to be impacted by the future of healthcare, and that have a responsibility to shape the future. The future might look different for different stakeholders.

(23:25):
If all of the tectonic plates of healthcare seem to be shifting beneath us, what responsibilities do different stakeholders have in 2024?

Sharon Yuen (23:37):
Rae, you actually just reminded me we should be talking about the players that we're not always thinking about, and that's employers and digital health. They need to focus on setting their high-level priorities. And to that, I'd especially like to call out is the fact that employers have to decide standards for the scope of covered healthcare services, care access and consumer autonomy. In digital health, they have to focus technology and service offerings on these unmet, pervasive population care and team workflow needs.

Natalie Trebes (24:05):
I think there's also a big role to play in coordinating patient care across time. We've talked about time horizon being a really important part of bespoke care, and we've talked about the ecosystems coming together to manage patients in a population. Both plans and medical groups are going to have to play a big role in working together to manage those patients on their journeys, and communicating that information with each other and with other stakeholders.

Prianca Pai (24:36):
And of course, we can't forget about health systems and life sciences companies. I think for them, it's going to be about protecting access. I think there's the risk that, given everything we talked about, whether it's care teams, ecosystem-based care, the new emerging drug pipeline, you can be overly focused on those internal priorities. But what are you thinking of bringing it back to the patient? How are you ensuring you're protecting access, in this time where I think that can definitely fall through the cracks.

Natalie Trebes (25:03):
Prianca, I love the phrase of being overly focused on internal priorities, because I think that's actually the through line of all of these, is the shift we need to make as an industry. We think about this big paradigm changes, is moving from the laser focus internally on our own organization's priorities, to working together across all these stakeholders, to figure out how to make this work as these tectonic shifts are happening. We have to collectively play our roles in setting priorities, coordinating patient care longitudinally, and protecting access. That all has to work together.

Rae Woods (25:39):
Wow. No small feat for 2024. But, Prianca, Sharon, Natalie, thank you so much for coming on Radio Advisory.

Sharon Yuen (25:48):
Thanks, Rae.

Prianca Pai (25:49):
Anytime.

Natalie Trebes (25:50):
Thanks for giving us so much time.

Prianca Pai (25:52):
And, so much time.

Rae Woods (25:58):
I hope you heard that you do have a responsibility for the future of healthcare, and to shape how that future will impact your organization. But, you don't have to do it alone. In fact, you shouldn't do it alone. Because even though we talked about some individual but dramatic changes in healthcare, they're not going to impact just one organization, or even just one stakeholder. They're going to have impacts on all of us, and not just all of us in healthcare business. It's going to impact patients as well. That's why we're going to keep talking about these topics on Radio Advisory in 2024. Not just the topics, but how different stakeholders, how different leaders, how different players in healthcare can make positive change towards the future, because your action steps matter here. But remember, as always, we're here to help.

(27:13):
If you like Radio Advisory, please share it with your networks. Subscribe wherever you get your podcasts, and leave a rating and a review.

(27:21):
Radio Advisory is a production of Advisory Board. This episode was produced by me, Rae Woods, as well as Abby Burns, Kristin Myers, and Atticus Raasch. The episode was edited by Katy Anderson, with technical support provided by Dan Tayag, Chris Phelps and Joe Shrum. Additional support was provided by Carson Sisk, Leanne Elston and Erin Collins. Thanks for listening.