Rae Woods:
From Advisory Board, we are bringing you a Radio Advisory. My name is Rachel Woods. You can call me Rae. As we start to enter a world beyond the COVID-19 crisis, we're imagining how the pandemic plus other big market forces will actually impact the future of the healthcare industry. If I'm honest, some of those changes might be for the better and some might be for the worse. To talk about how changing demographics have the potential to shape the healthcare 10 years into the future I've brought strategy expert, Nick Cericola.

Rae Woods:
Hey, Nick.

Nick Cericola:
Morning, Rae.

Rae Woods:
Before we get started I want to ask you, what do you think you'll be doing in the year 2030?

Nick Cericola:
Oh gosh. Well, if my plan holds my buddy Jeff and I will probably live on the moon and be talking to you via fax machine or something like that.

Rae Woods:
Fax machine only true if you're still in the healthcare field and trying to communicate with various hospitals and physician groups. Here on earth fax machines will definitely stay in business.

Nick Cericola:
That's right. Holding strong. I appreciate that.

Rae Woods:
Well, since we're going to be talking about the future, I want to start with I'll admit a little bit of a blunt question. We are still in the middle of a crisis. There is very real concern about the delta variant here in the US and across the globe. And leaders, frankly, have their hands full putting out the fire that's right in front of them, let alone thinking about what do we do six months from now, 18 months from now. So why is it actually important to turn the dial forward 10 years into the future?

Nick Cericola:
It's a really fair question. I think I've made the joke probably too many times talking about this project in the last couple of weeks that what better time to start predicting the future than the tail end of a global pandemic that no one successfully predicted?

Nick Cericola:
But the actual answer to your question is that there are big decisions being made right now that will weigh heavily on the future. Investments in site of care shift, thinking about health and equity, or creating better health equity. The choices that we're making today as a sector are going to show up across the next five to 10 years. And I think it would be a shame to be honest to not take a futurism perspective on some of the decisions that we're confronting right now to make sure that we get it right. If we are actually trying to make dramatic shifts in the way the health system operates based on information that we've gathered, honestly, over the last 15 months of this experience, then it's worth looking ahead a decade to make sure that we're actually making calculations that align with broader shifts in our environment.

Rae Woods:
And is that why you decided to actually write a message to health care leaders from the perspective of a leader 10 years into the future?

Nick Cericola:
It is. Yeah. So we wanted to basically conduct a thought exercise. And I think you're getting to the project at hand, which is called Dispatches from the Future. We wanted to look at current course and speed in the industry and larger environmental forces and imagine what the world could look like 10 years from now and describe it to ourselves. And so we have assumed this identity of an anonymous healthcare executive penning letters back to their colleagues in the present time from the year 2030 with some challenging information about the future if we let it take the shape that it may.

Rae Woods:
So besides the fact that this is a really interesting thought exercise, I want to ask how are these dispatches actually different from the way that the rest of the industry is thinking about the future? And why do we at Advisory Board think it is important to contextualize the future in this way?

Nick Cericola:
So it started with taking this hindsight perspective. A lot of futurists in healthcare and other sectors are looking at the future as if we're just spinning the clock forward from the present day. We wanted to imagine as if the future has happened and look back and examine it that way. But the other thing that we wanted to do with this particular project is to examine the future of healthcare from an external perspective. So put differently, instead of looking from within our own sector and trying to anticipate or predict changes that are coming across the decade, we wanted to look at larger societal and environmental forces that are happening and then draw a line from those into healthcare.

Rae Woods:
So then what are some of those big external forces that could be affecting our industry?

Nick Cericola:
The three big ones that will be the focus of this project are changes in demographics, technological advancement... And that could include technologies that are specific to healthcare, but it could also include larger technological shifts and quite honestly human technology relationships and how those will evolve over time. And then the third is ecological change and we'll include within that a heavy focus on climate, but also other changes to our lived environment. Cities, the way people interact with the physical space around them, and how they use resources.

Rae Woods:
Well, for today's conversation, I think we want to focus on just that first big force, which is demographics. And if I'm honest this is the one where I've seen a lot of commentary, both inside and outside of Advisory Board, but all of that commentary is basically around the aging baby boomers. Is that the right way to be thinking about demographic shifts?

Nick Cericola:
It's not wrong. I was reading some census data earlier this week coming out of the most recent census and it is true that baby boomers are going to be a really significant part of the aging equation in our country. They are, by the time we get to 2030, going to be entirely 65 years and older and as a result will require more nursing care, more long-term care. And that is something that is a very significant set of issues for our society and our health system in particular to contend with. But what we're arguing for in this project is that the aging of baby boomers or the growth in the population of individuals 65 and up cannot distract us from the aging of younger generations. In some ways I think some of the most surprising changes that could happen in our space will be brought to bear by the aging of generation X, millennials, and generation Z.

Rae Woods:
So then when it comes to those younger generations, how are the current and maybe even the future healthcare leaders actually missing the mark?

Nick Cericola:
There are a few ways and I imagine we'll get into some of these across our time together. But one of the first that we're talking about right now has to do with how investment decisions and strategic choices are anticipating or perhaps not correctly anticipating the health needs of younger generations as they evolve. As you and I well know we've seen across the last 12 to 15 months a huge level of investment in new digital health technologies, which are in some part predicated on conventional wisdom about how younger generations prefer to consume healthcare. They're very consumer-driven, very patient-centric investments, but I worry that they might actually not be aligned with health characteristics and the health needs of those parts of our population, particularly as they age another decade.

Rae Woods:
What do you mean? Because when I speak to leaders today who do tend to be in an older generation than you and I are in, I can reference countless conversations where they've looked at me and said, "Hey you, millennial who wants tech enabled care or is a savvy shopper..." Or pick your archetype. "That's what I need to be evolving for next." But it sounds like you're saying that what these generations are going to want is more than just a tele-health platform?

Nick Cericola:
Yes and no. I think that the read on consumer preference is actually pretty good. Advisory Board has its own survey data that shows that younger generations are less loyal to PCPs. They are more motivated by convenience and intuitive user experience. And so some of the bets that the industry is making I think are well-grounded in a good understanding of those preferences. My concern more is that they're not well-grounded in the actual health needs of these populations.

Nick Cericola:
And so what I mean more specifically by that, when we look at the data, generation X and then millennials after them are less healthy than generations prior, than their parents were, at the same point in their lives. And that's a mix of both behavioral health indicators and physical health indicators. So what I worry about is an over-investment in consumer preference or perhaps an over prioritization of consumer preference to the detriment of our ability to actually provide managed care to generation X, to millennials, at a point in their lives when they're going to need it, whether they know it today or not.

Rae Woods:
And is that because a hallmark of managed care is actually connected care? Is making sure that you're providing continuity across multiple sites, multiple services, multiple disease states, but if suddenly I'm getting care on my phone, on my computer, through one Urgent Care, one wellness center the next day, it makes it a lot more complicated to actually have coordinated, connected care?

Nick Cericola:
Yes, exactly. We see a lot of fragmentation right now among digital health technologies. Many really impressive point solutions, but they're not very well connected to each other. And many of them are decreasingly connected to actual providers. And I think one of the things that we need to be very mindful of as we shift care to the home or in fact do try to create placeless healthcare and devolve more control to individuals and how they manage their health, that we're not fully disintermediating the doctor. That primary care physicians and others are still the primary managers of individual's health needs and that they remain a central part of our care delivery system.

Rae Woods:
We're talking about the shift of care into the home as being something that younger generations will prefer and how that's tricky because people even our age tend to be sicker than their parents were. But this isn't the only example of shifting care into the home. If I go back to those baby boomers, that aging population, there is a big shift to move their care out of the hospital, out of a SNF or a nursing home, and into what might not be the adult's home, but might be their adult child's home. What does that mean for younger generations?

Nick Cericola:
This is one of the issue areas that I think is probably worthy of the greatest amount of study. There is a growing informal generation... Some of you are probably familiar with the term the sandwich generation, which describes a cohort of individuals who today are mostly in their forties, perhaps their early fifties, that are responsible for caring for aging parents at the same time that they're caring for their children. It spans both generation X and a little bit of the millennial generation right now. But I think that there's a real risk as the industry is increasingly bullish on the shift of care to the home setting that we overlook the realities, the needs, and the characteristics of this sandwich generation.

Rae Woods:
But why? Adults have always been sandwiched in between providing care for multiple generations and honestly providing care for themselves. Why is this problem going to be worse 10 years from now than it was say 10 years ago?

Nick Cericola:
The simple answer is that there will be more in this generation. And that's based on two concurrent demographic shifts. One of course is the growing population of individuals in their sixties, seventies, and eighties. So there will be more aging adults who will rely on their adult children for care than ever before. Also, because we've seen delays in child-rearing over the last couple of decades, there are more individuals in this age bracket... Again, I'm talking about forties and early fifties, who have children living at home. There are also more children living at home into their twenties and even into their early thirties, which leads to a second big trend, which is the growth in multi-generational housing arrangements. These are interconnected of course, but there are also cultural factors that are bringing us back to a point in time where multi-generational housing is as common as it was in the 1950s, to be honest.

Rae Woods:
Oh, wow. And so what you're saying is that if we're not careful this sandwich generation is going to get stuck bearing the brunt of care, again, for themselves, for their children, and for an aging and sicker baby boom population?

Nick Cericola:
They already are and I think the issue could get a lot worse. When we actually look at the experience of individuals in the sandwich generation... And this is generalizing. But they experience financial difficulties. That's covering out-of-pocket expenses related to the care for their loved ones, long-term care of course being a significant part of that, but also other expenses related to food and travel. We also see them take a significant emotional stake in their loved ones. That's an intuitive leap, but the data shows that there are heightened levels of stress and anxiety, relationship sacrifices that often have to be made by members of the sandwich generation. And then there's also evidence that they themselves have worse physical health as a result of the responsibilities that they're executing for caring for their loved ones.

Nick Cericola:
So as we start to see this generation grow and as you start to see more aging adults lean more heavily on their adult parents... Who are often doing this quite willingly I should add. It seems very important to me that we better understand the needs and the preferences of members of this informal caregiving generation if we really want to get the shift to home-based care right over time.

Rae Woods:
I have to admit you're talking about this and I'm literally thinking, "I'm screwed," as somebody who's probably going to be in this bucket or whose family members are going to be in this bucket. And what you're talking about is a scenario that will basically push caregivers to their limits because they're sandwiched in this difficult spot. So what do we do to actually uplift and support this generation that's going to be bearing the brunt of health care for their families and frankly for the country?

Nick Cericola:
This is exactly why we're having the kind of conversation that we are, because it's a moment of reckoning I think and I don't know the answer yet. But I think there are a couple of things that I would encourage leaders to be thinking about, particularly those who are making big bets or investments in the shift to the home health setting. And so [inaudible 00:18:01] one to think about what does it take to actually support familial caregivers? Through technologies, through training, through professional resources that help them develop their skills, but also make them more competent and using the technologies that we're hoping are going to make the shift to home as successful as we imagine it might be?

Rae Woods:
What's the business case behind that? Because I have this moment of, "There's got to be more than a moral imperative. It has to be more than, 'I don't want to leave this generation out to dry.'" Why from frankly a business perspective would this be a smart investment in the future for today's leaders?

Nick Cericola:
So there's two ways to think about the sandwich generation. And one is that they're a cohort of individuals who we really need to care for ourselves. And I think from that there often is a moral imperative. But at the same time if we think about the sandwich generation as a natural extension of provider supply, as we look ahead 10 years to constraints in our ability to meet longterm care needs, particularly among aging adults... And not in terms of physical plant availability, but in terms of provider capacity. We ought to be thinking about how we can actually partner more successfully with informal caregivers to extend the ability of skilled nurses and others that we are going to lean heavily on to provide the care that aging adults are going to need across time.

Rae Woods:
And that hits on the difference between what these dispatches are versus everything else we've read about the future of healthcare. There are plenty of other outlets who have done that internal approach and rolled the tape forward and said, "Hey, we're not going to have enough providers, or certainly not when we look in this long-term care area, because of the aging baby boomers, because of changes within the workforce, et cetera." But what you're saying is if we look outside of just that internal change and we look at what it means for external forces, we might hear some bad news, but we might also have a new solution set to getting ourselves out of the supply problem?

Nick Cericola:
There is a likelihood that we are actually going to see a significant shift in more care to the home setting. I want to make sure that the industry gets it right. And I want to make sure that it gets it right in a way that sustains our ability to continue shifting care into the home. And if we're not considering all elements of the equation then we aren't setting ourselves up for success. And I would argue that one of the most important factors is, what does the home environment actually look like and who are the people involved? And not only the choices that patients are going to be making for their own care, but are directly involved in providing that care. And the sandwich generation falls squarely within that.

Rae Woods:
All of that is to say we know we need to better support the sandwich generation, but it strikes me that individual people might be called upon to act as a caregiver in different ways. If I think about this historically a lot of the caregiving burden tends to fall on women or tends to fall on different demographics, different identities. So if we're having this moment to speak to leaders about how to prepare for the future, how do they make sure that they're not just supporting the sandwich generation, but supporting them in an equitable way?

Nick Cericola:
Yeah, this is a really important point. So the data is very clear that women disproportionally hold these responsibilities. Members of the sandwich generation are increasingly black and Latino. And it's going to be critical for an industry that is grappling with its own responsibility in creating health equity that we make sure that that carries forward in how we're not only managing home-based care, but how we're supporting the needs of familial caregivers.

Nick Cericola:
And so this is a place where governmental action could help, but also I think employers. Thinking about how they support women in the workforce in particular who are charged with caring for aging loved ones or their kids at the same time. For those of us in the health sector, making sure that we're not inadvertently or purposely disadvantaging any particular group from getting access to the kinds of support that are important for familial caregivers to be able to successfully meet the needs of their loved ones. This is a place where the industry not only needs to think about improving equity because of the disproportionate burden that falls to historically disadvantaged populations in some cases, but also needs to be very mindful that it doesn't create further inequity by not successfully supporting those who perhaps need it most in the home setting.

Rae Woods:
And by the way, this speaks to what we've been talking about on the last two episodes of Radio Advisory and why equity can't be something that is one person's job or a standalone, separate strategy, but you have to be thinking about the equity implications of everything you do. And this is a perfect example of that because if we're not careful the inequities that are experienced could actually get worse.

Nick Cericola:
I absolutely agree.

Rae Woods:
So, Nick, we've been talking mostly about the baby boomers, gen X, millennials, but if we're going to be talking about the future I have to ask you to make some predictions about even younger generations. What do we think is going to happen with gen Z in the next 10 years?

Nick Cericola:
So there are a couple of things that I think are interesting, one which I think is squarely a gen Z trend and another that I think brings in our millennial cohort as well. So while the population of individuals aged 65 and up is growing quite rapidly, the population of individuals 18 and below is actually declining. And so as our workforce thinks about its future supply needs, one readily apparent challenge is that there simply aren't going to be as many people entering the workforce in the next 10, 15 years as there has been historically. And that at a time when we're going to have an incredible amount of need as the population ages.

Rae Woods:
And what was the second piece that you were going to say when it comes to gen Z?

Nick Cericola:
Okay. So I think this is one that leaders are probably already starting to see a little bit of, but the other point I wanted to make about gen Z is that as they enter the clinical workforce... And this is true for millennials too. They're going to continue, perhaps even accelerate, a shift in the politics of clinicians. We've seen for the last couple of decades to be honest a pretty steady march towards democratic-leaning views and politics among the clinical workforce. And if we're understanding the politics of gen Z today correctly... And I look at med school matriculation data and it seems pretty clear that the political preferences of incoming med school students today are heavily in favor of a more liberal ideology. I think it's something that we should likely anticipate to continue into the next decade.

Nick Cericola:
It's not just political viewpoints that I think are material here. In fact, you could probably argue that individual politics or aggregate politics of the workforce may not matter or be all that relevant. But what is more relevant is that younger generations are more inclined to express their politics, to actually agitate for change, to call for reform, to express their views through activist measures. We've seen some examples of that in the last couple of years and I think we'll see a lot more of it in the decade to come.

Rae Woods:
So what you're saying is that it's possible that the loudest calls for major health policy reform are actually going to come from inside our own workforce?

Nick Cericola:
I think that's absolutely likely to be true. In fact we've already seen examples of this. The American College of Physicians early last year came out in support of single-payer healthcare, which was at the time a pretty dramatic shift. But I want to be clear about one other thing. I think you're right that calls for major reform may likely be loudest from within our own workforce, but it's not just major reform. I'm also thinking about institution-level change that happened from petition movements, unionization drives, clinicians that are active on social media talking about policy at a local level. I think this is something that we're likely to see both macro and micro examples of across the coming decade.

Rae Woods:
Well, Nick, I want to thank you so much for coming on Radio Advisory. We've only had enough time to talk about the first Dispatch from the Future, which is all about demographics. We'll have you back to talk about technology and ecology, but before I let you go I do want to ask the question that I ask everybody on Radio Advisory. And that's what do you want our listeners to take away or act on as a result of this conversation? Especially to those who might think, "I can't control aging and I don't know what to do about this big market force?"

Nick Cericola:
I'm glad you asked. I would say two things. One, at a time when we are making bold changes as an industry, we need to do our best to think ahead 10 years. I know strategic planning cycles tend to be much shorter than that and that's a good thing, but we have to be contextualizing today's choices and where our population is going to be 10 years on.

Nick Cericola:
The other thing I would encourage leaders to do when they are conducting that exercise is to make sure that they're thinking about an intergenerational framework. Aging is not exclusive to individuals at any particular generational level, but we have to make sure that we're considering the interdependencies between the aging of baby boomers and their children and their grandchildren. Because if we don't do that then we might set ourselves up for near-term success while actually disadvantaging ourselves over the longterm.

Rae Woods:
Well, Nick, thanks for coming back on Radio Advisory.

Nick Cericola:
Thank you, Rae. It was a pleasure.

Rae Woods:
In this episode we talked about our first of what will become three Dispatches from the Future. And this is Advisory Board's way of exploring the implications of major market forces on the healthcare industry. We'll look at how demographic change, technology, and ecology will impact every aspect of the healthcare sector, but we'll do so from the perspective of an anonymous leader in the year 2030. You can check out our first Dispatch at the link in the show notes. And remember, as always, we're here to help.