Rae Woods (00:02):
From Advisory Board, we are 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. We are approaching the end of 2023. And here at Advisory Board, that means we're reflecting on everything we've researched over the last 12 months and setting our agenda for the year ahead. And I bet you can guess that 2024 is not going to be a slow time for healthcare. So, when I say we're studying a lot, I mean we are covering topics that we've covered before, like the workforce and ai. We're looking at new areas, like how to make peer provider relationships actually work.

(00:44):
We're looking at what the future of hospital sustainability is, what the future of cancer care is, how we're actually going to be able to pay for innovations, and the impact of ongoing trends, like site of care shifts and value-based care, and how they're going to impact everyone regardless of where they are in their journey. That's a lot. And I'm actually going to spend this episode kicking it to my colleagues to explain more about these topics and more about the hypothesis that they find is most important to look at in 2024. I'll start by passing the microphone to my colleague, Monica. She's going to take it from here.

Monica Westhead (01:24):
I'm Monica Westhead. Workforce issues remain the number one priority of executives that I speak with across all types of care. While the issues that they're facing, the specific issues may have changed across the last three years, the underlying problems remain the same, and the burden on our staff and our patients remains, too. When I travel around the country and speak with workforce executives, I've always asked how people would describe the workforce today in one word. I've gotten answers like tired, stretched, thin, frustrated, underappreciated, but I've also gotten words like opportunity and exploration. There's a feeling that now is the time to innovate. Recruitment and retention are still important, but you can't hire or retain your way out of today's staffing challenges. So, what's left? Starting over. What does that look like? In 2024, I'm focused not on how to get enough workers. I'm focused on what those workers do, what work needs to be done, and what's the best way to do that work.

(02:35):
Some of it can be done by technology. Advisory Board did some excellent work this year on the role of technology in supplementing the workforce. The next step, building processes and structures around that technology so that technology, as a member of the care team, is more than just a catchphrase. Some of the work must be done by people, but who? How much of the work done by nurses today should actually be done by nurses? We've been talking about top of license practice for many years now, and we know there's room to improve here. But how can we get there? Finally, where does that work get done? The pandemic taught us that more than we think can be done at home. We've seen massive shifts in care delivery from inpatient to outpatient to virtual, but our staffing strategy hasn't caught up. So, in many cases, we find that when we do shift the workforce from one setting to another, we're just robbing Peter to pay Paul.

(03:26):
We're short staffing one place while another place grows. So, my team's goal is to explore the future of the care team. The right work done by the right member of the care team in the right place. This is not about ratios. This is about, as a strategic executive with limited staffing budgets, how can we rethink who does what, where, and when across every part of the enterprise. What does it truly mean to build across continuum care team? How do all the roles fit in? How do you make trade-offs between parts of the business in ways that make sense? Better care teams can lead us to better outcomes and a better experience for those who go into the healthcare field. We now have the opportunity not to put things back the way they were, but to really try to make something better for our workforce and for our patients.

Ty Aderhold (04:20):
My name is Ty Aderhold. I am a lead researcher on our digital health research team. And, in 2023, our team spent almost the entire year researching AI. We looked at the rise of generative AI, what it means for healthcare organizations, and how organizations can make better decisions. And, in some ways, 2024 is going to look similar for our team. We're still going to be focused on some of that AI research, but instead of looking at the one-on-one level or at some of the hype around generative AI, we're going to take a few different approaches next year. First, we're going to look at what are people actually doing with AI, and where are the big opportunities? We're also going to look at some of the stuff that, I would say, is more eating your vegetables. So, data management, data architecture, what can your organization be doing to set yourself up for success in the future on the data front?

(05:16):
And then, finally, and I think where I am most interested, is what are we missing with this focus on AI, and particularly on generative AI? What else is out there that we're not paying attention to? One of my personal hypotheses, for example, is that computer vision, AI software that reviews and makes decisions based on video footage, may actually be more impactful on healthcare than generative AI, and there's already things out there in the quality space, something like falls prevention, virtual nursing.

(05:49):
So, I think this is a huge technology that is not getting the hype that something like ChatGPT is getting just because it's not out there commercially, and people aren't talking about it in the same way. Another example of this is unrelated to AI entirely. Think back to 2021. There were all these digital health priorities that people were talking about, patient experience, remote patient monitoring. Haven't heard a lot about that in the past year. I think there's a reason for that, but our research team is really going to be focused on what are some of those priorities that organizations have let fall to the side as they focused on AI? And how can they return to those in 2024 to make sure they're still hitting their organizational goals?

Max Hakanson (06:42):
I'm Max Hakanson.

Mallory Kirby (06:44):
I'm Mallory Kirby. And one of our big focus areas heading into 2024 is payer-provider relationships. In particular, characterizing the relationships and countering some preconceived notions that listeners might have. Providers often view payers as a necessary evil. While payers have a lot of frustrations in how their provider partners operate, we know that there are a lot of everyday frictions that currently define payer-provider relationships. Let's start with prior authorization, for one. It feels like every provider's favorite topic. We know that they're really bogged down by prior auths in particular amidst the bureaucratic tasks that they have to complete to care for their patients. While we see stories about big insurers, like UHC and Cigna, saying they're cutting up to 20% of their prior auth requirements, that's really not being felt by providers downstream.

Max Hakanson (07:32):
And Mallory, it's not only prior auth. We hear over and over again from providers that claims denials continue to be a huge issue. In fact, claims denials actually rose to 11% of all claims in 2022. That's up nearly 8% from 2021, a pretty significant increase. And it's not only the number of claims going up, so, too, is the cost associated with them. The cost of claims denials increased by a whopping 67% from 2021 to 2022. In fact, the average cost to a provider per denied claim is now $79. And the negative impact of these frictions is also being felt by health plans. Both plans and providers have money on the line here that they're losing out on due to these administrative expenses. Now, we're still pretty early on in our research interviews, but it feels like these individual pain points are occupying almost all of the mental and financial resources being dedicated to improving the payer-provider relationship, really leaving little time or money to invest in higher level strategy or partnerships between these two groups. This lack of focus on the bigger picture makes improving their overall relationship really difficult.

Mallory Kirby (08:48):
Now, that said, in our research this year, we're hoping to pull back from those individual friction points we started with and provide some situational context for what's happening between payers and providers, as well as early guidance on what makes a good partner in these relationships. We're going to explore the differences in how payers approach relationships with hospitals versus physician groups. Why, for example, a health plan may depend on independent physicians as good faith partners, but give the same group less attention or resources than the big health system down the road. We're also going to go beyond contextualizing the problem to identify early solutions. Where should payers be working together or with other partners to improve things for physicians? Poor payer-provider relationships come at a great cost and not just in the extra dollars spent on claims adjudication or denials review. We know that these friction points have a negative impact on patient satisfaction and outcomes and on provider frustration. Post-COVID, it feels like these friction points have hit a new peak. We're excited to tap into Advisory Board's depth of payer and provider relationships to provide a, hopefully, unbiased perspective on new ways forward.

Vidal Seegobin (09:54):
I'm Vidal Seegobin, and the research that my team is going to be looking at is really closely connected to the story of health systems starting all the way back into 2022. So, we talked about health system performance into 2022. It was one of financial distress. And in 2023, particularly on the second half, what we're seeing are green shoots in terms of performance, both in terms of revenue, expense management, and operations and flow. But most of that work has been unlocked through just sheer grit, determination, and hard work. And what we're looking for is a transition from harder work to smarter work. So, the first area of investigation for health systems is just on general operating excellence and improvement. And that's going to look at everything from what tactics and ideas and concepts have we potentially forgotten, as we've seen loss in terms of institutional knowledge, that we just need to rediscover in addition to what new concepts and ideas are worth consideration, because they're yielding results in the market right now.

(11:02):
So, that's on the operation side. And then, there's the second question of what does a health system look like and occupy and do into the future? And our general theory here is that, for most health systems, they're going to have to shrink to grow. And that is going to involve redeployment and reconfiguration of everything from management of teams, administrative staff, it's going to have everything to do with service configuration, footprint, expenses, partnerships, everything that's captured in that shrink to grow concept. And so, our intention here is to sketch out what are the opportunities, what are people trialing, what are working and what's not, so that you can have an informed conversation with your board and your teams around this is what the shrink part of our story is, and this is what the grow part of our story is. So, really excited for what we will be able to find across the 2024 research cycle.

Julia Elder (11:59):
Hi, I'm Julia Elder.

Lindsey Paul (12:01):
And I'm Lindsay Paul. And we're here to tell you about our upcoming research on the future of cancer care.

Julia Elder (12:06):
And, really, we have to talk about the future because there are so many pressures that the industry is facing right now. First of all, the workforce crisis means that providers need to completely redesign the cancer care team. And, on top of that, patients are experiencing care gaps as we figure out what to do with all the new innovations that are coming out. Of course, we still haven't figured out how to sustainably pay for all of this, and because cancer programs are struggling to make it work, there's more space for new competitors to come in and try to provide that better patient experience themselves.

Lindsey Paul (12:34):
Julia, to go back to that first challenge you mentioned about the staffing shortages. Providers know they need to reconfigure teams to make care more efficient. And, to do that, I think we'll start to see them rely more on advanced practice providers and oncology pharmacists. And I know Rae has spent a lot of time talking about AI on previous radio advisory episodes. So, I'm also excited about how care teams will use these new tools to deliver more efficient care.

Julia Elder (13:03):
Yeah. And to that point, I feel like one of the most important questions we should be thinking about is how all that will work as the care journey becomes more personalized. Everyone's been talking about personalized treatment in oncology for years, but what I think is most interesting is that we're starting to see the patient journey be tailored to the individual at every single step throughout the cancer care pathway from diagnosis all the way to survivorship. So, I've been having conversations about how providers can offer that unique experience for patients without making the journey so complicated that patients fall through the cracks.

Lindsey Paul (13:36):
But, of course, the underlying question here is how are we going to actually pay for all of this? And that's what gets me the most excited. I'll tell you what I'm predicting. There's not going to be a world where we can ignore value-based payment in oncology. I expect that payment models are about to get a whole lot more complex, more common, but also more standardized. And that'll mean some huge changes for plans and employers and providers and really everyone in healthcare.

Julia Elder (14:05):
Yeah. And there's definitely a risk to not embracing that change, right? Because if you're not delivering personalized and affordable care, there are dozens of disruptors hoping to win over the consumer with things like remote patient monitoring, emotional support, care coordination, and so much more. I'm predicting a lot more players will be jumping into cancer care next year, and over the next several years, hoping to control more of that patient journey. So, to providers, I would say get ready for some disruption and also some exciting opportunities for partnership.

Lindsey Paul (14:35):
With all of these questions, we're coming to answers really quickly. So, make sure to be on the lookout for a webinar and a bunch of other research coming to advisory.com in early 2024.

Solomon Banjo (14:51):
I am Solomon Banjo. And to talk about my team's research for 2024, I get to channel a lot of leaders of the firm, like Emily Heuser and Gina Lohr, folks you've heard on the podcast before. And I'm glad to be back during this episode as the first research call we had for our 2023 research came from last year's episode. Our 2023 focus was on taking stock of the coming wave of innovation across product classes and the patient journey. Our 2024 agenda is going to build on this body of work by diving deeper into what this looks like in practice. I'm going to talk about this in two ways. First, as it relates to financing these innovations, and, second, integrating new in-kind data at the point of care to shift from reactive to proactive and increasingly predictive care for patients across all care settings. One of the first examples that comes up when we're talking about this new era of care are cell and gene therapies.

(15:49):
Now, they're truly revolutionary. But just imagine yourself for a moment going on a multi-year diagnostic odyssey for unmanaged symptoms, and then, ultimately, receiving a diagnosis for a condition that has no cure but does have ongoing debilitating symptoms. And then, imagine that a treatment is approved for your condition. Sounds like a dream come true, right? Until you realize the barriers that still remain for you to access the treatment. How much of the multi-million dollar price tag will your health plan cover? How far will you have to travel to get that care? And, in the end, will it even work? Right now, we're in a time of preparation and experimentation as we look at a drug pipeline just bursting with these therapies. On the data piece, consistent listeners of this podcast will no doubt know of me and my team's focus on clinical decision making. I believe novel data and data analysis is truly an underappreciated hero of this new era of innovation.

(16:52):
But, I will admit, that it's a lot easier for me to say that the days when we're making clinical decisions based solely on the data we're capturing in the physician's office are numbered. That's another thing for you all to flesh out how you create a strategy to integrate these tools, technological or otherwise, into your business. How do these strategies vary depending on the service line, patient population, or even institution type? I'm not yet a hundred percent certain, but it's clear from conversations we've had with organizations able to harness innovative products, and here I'm thinking of GLP-1's as an example, that success for patients and programs lies in a lot more than just a metaphorical pill.

Sebastian Beckmann (17:39):
And I'm Sebastian Beckmann. We're going to be researching ASC strategy in the coming year, and I like to anchor this work in some of the big procedure shifts that we saw in the last couple of years. So, if you take joint replacement, for example, in 2017, that was nearly a hundred percent an inpatient procedure. Today, that is large majority outpatient. I think that rapid overnight shift is going to be the exception rather than the rule. But I do think it sets the precedent that you can move these kinds of high revenue procedures from the hospital to lower cost settings of care. And I think health plans are going to see that now as an achievable savings opportunity in a way that maybe they didn't use to.

Nick Hula (18:23):
Yeah. And it's not just payers we're watching that will dictate the future of ambulatory surgery. What I'm watching is health systems. I think they're just starting to catch on to the opportunity here today and start to drop their hesitations to moving care away from their hospitals. Be that because they're focusing on value-based care and want to provide surgery in a lower cost setting, or simply to appeal to consumers in competitive markets. So, basically, we're seeing health systems see that writing on the wall, that ASCs are going to be a big part of the future of care delivery, really, whether they like it or not.

Sebastian Beckmann (18:58):
So, for health plans, this is a big saving opportunity. For health systems, this is actually a competitive opportunity. So, between those two forces, we think that outpatient shift, particularly to the ASC setting, is only going to accelerate.

Nick Hula (19:10):
But the big question, then, becomes, okay, if we're going to see this trend accelerate, how do organizations ensure that their ASCs are actually successful?

Sebastian Beckmann (19:21):
This year we've done a lot of research setting the stage for the landscape inside of care. So, we've looked at how have procedures shifted over the last five years, how does that vary across the country, and how are they distributed today, setting the stage for what that landscape looks like right now?

Nick Hula (19:37):
Yeah. And looking forward, we've seen a lot of organizations who have invested in ASCs following this trend not realize, until it's a little bit too late, that running an ASC is very different than running a hospital, both operationally and strategically. Be that in terms of what services or mix of services to offer, whether to operate the ASC alone or do a joint venture, it just requires a big shift for organizations both getting into this space and for organizations looking to improve in this space.

Sebastian Beckmann (20:08):
So, that's our focus for 2024. How do you build and run successful ambulatory surgery centers?

Clare Wirth (20:20):
My name is Clare Wirth. Our research into value-based care and population health management over the last several years has revealed a lot of challenges, many of which we've talked on this podcast. But there are three consistent ones underlying them. Too many stakeholders to engage. There's limited benchmarks to understand progress. We have an undefined end state. Our team is working on a value-based care self-assessment tool, which is an opportunity for provider executives teams to get on the same page about where they are and where they want to be. And that may be transitioning to take on more risk-based payment and make all the care delivery model changes necessary to succeed in those models. But, for many organizations, that's not the goal. Taking on more risk may not be the answer because we won't live in a world of 100% capitation. This tool will help provide our executives benchmark what good looks like across progress in terms of governance and vision, financial transformation, and clinical transformation.

(21:30):
It illustrates what it means for an organization to move from value-based care being something that's done off the side of staff members' desks to something that is core to everyday workflow. And we're doing that across the journey of value-based care. It is not static. At the same time, we're also going to put some numbers around it. We're going to quantify what proportion of provider organizations fall into various stages of progress based on their own assessment, and then map to them what strategies and tactics are right for their organization based on where they want to be. And, of course, we can't stop there. We often hear value-based care is happening, but it's not happening in my market. We'll be digging into when should a provider organization be more aggressive in value-based care? What is the risk of inaction? Even if value-based care is not a major trend in your market right now, providers need to prepare for value-based care so they can meet it from a place of strength. Our goal for 2024 is to help provider executives shape what their future looks like rather than letting it happen to them.

Rae Woods (22:48):
That was a lot. I told you that a lot would be happening in healthcare and in Advisory Board research in 2024. And here's the thing, you can actually get involved in our research. Every single person that you heard in today's episode is running a team that, every single day, talks with real health leaders about how they're tackling each of the challenges that we discussed in today's episode. So, if you heard something, and you thought to yourself, "I have something to say here," or, "My organization is making good progress," we want you to get in touch with us. I can connect you to the folks on the research team. Just email us at podcasts@advisory.com. That's podcasts with an S.

(23:31):
And remember, as always, we are here to help. If you like Radio Advisory, please share it with your networks. Subscribe wherever you get your podcasts and leave a rating and a review. 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.