Rae Woods:
From Advisory Board, we are bringing you a Radio Advisory. My name is Rachel Woods, you can call me Rae. For years, we've been tracking Site-of-Care Shifts in the healthcare industry, but it's important to remember that this trend isn't limited to the United States. We are seeing a global Site-of-Care Shift and it's accelerating. Today, I want to talk about what shifts we're seeing? Why those shifts are happening? And how leaders should approach their next moves? To do that, I brought US strategy expert, Colin Gelbaugh and global strategy expert, Paul Trigonoplos. Hey Colin, hey Paul.

Colin Gelbaugh:
Hey.

Paul Trigonoplos:
Hey Rae.

Rae Woods:
We're going to be talking about things happening across the globe in healthcare. I know this is an awkward question when we're still in a pandemic, but have you gotten the chance to travel anywhere in the recent months?

Colin Gelbaugh:
I actually went to Disney world and I didn't even win the Super Bowl. That was fun.

Rae Woods:
Amazing.

Colin Gelbaugh:
But with my nieces four and two years old so it was our first experience.

Paul Trigonoplos:
We went to Mexico twice last year, my partner and I, and then Italy in November.

Rae Woods:
Nice.

Paul Trigonoplos:
So been able to get out a few times but we timed them all when COVID waves were at the bottom, in between peaks. So we got lucky.

Rae Woods:
As long as the COVID numbers stay low, I am hoping to make it to Europe this summer so I'll be right with you Paul. We're going to talk about the research that you two are running. But first, I actually want to ask about an experience that you recently had, Colin, with our members. You convened a group of, I think it's hundreds of provider leaders together to talk about site of care shifts. And you actually asked them what they believe the most threatening shift is for their business. What did they say?

Colin Gelbaugh:
We convened over 400 healthcare leaders recently and overwhelmingly, almost half of them said that surgical care shifts were the most immediate and alarming shift that they're worried about.

Rae Woods:
Are they right to be scared about this?

Colin Gelbaugh:
Yeah. Surgical shifts are certainly one of the biggest shifts that we recommend providers to be aware of right now.

Rae Woods:
What are some of the other shifts that we're tracking? Surgical care is a big one, what else?

Colin Gelbaugh:
Of course, there'll be emerging shifts to telehealth and to the home. These are in the early stages but have experienced exponential growth. And then there are other shifts that I would call more opportunistic of convenient care sites, urgent care clinics, retail clinics, the expanding access where access is an issue. And then finally, diagnostic services, more groups expanding onsite diagnostics is the last area I'll call out.

Rae Woods:
And those are all happening here in the US, but Site-of-Care Shifts aren't just limited to what we're seeing in America. Paul, how does that compare with what we're seeing in international markets? Are the threats the same?

Paul Trigonoplos:
I think all of the shifts that Colin mentioned are happening at least in part in other countries, but there's a little bit more nuance there. Internationally, you can think of health systems in two buckets. There's the systems that want more patients and they want to grow. Those systems are private providers. They are generally worried about the same threats that Colin mentioned, surgical and then anything that could harm inpatient volumes namely, home care ships.

Rae Woods:
And what countries are examples of these folks that want to grow?

Paul Trigonoplos:
It's usually not full countries. It is usually private systems within each country.

Rae Woods:
Got it.

Paul Trigonoplos:
40% give or take of the population of Australia has private insurance, they can access private hospitals. Denmark, the UK, most of Scandinavia actually, they all have a small private hospital industry that does want to grow, middle east as well.

Paul Trigonoplos:
For the most part, the public systems in these countries are where most of the care is delivered. Those hospitals don't really want to grow. They're trying to deliver as much care as possible as cheaply and safely as possible because they're responsible for the public tax dollar. For them, they are trying to shift as many services as possible into more scalable settings just to meet booming demand.

Rae Woods:
And Paul, you're getting to exactly where I want to go next, which is not just what we're seeing, but why it's actually happening? What are the drivers of Site-of-Care Shifts? And my hunch is, they're not going to be the same, certainly not between all countries, but also perhaps not between all sites. Let's start high level. What are all the drivers foresight of care shift that we're tracking?

Colin Gelbaugh:
A lot of Site-of-Care Shifts are triggered by regulatory changes. So that's one reason why you might see differences internationally. Reimbursement in the US has been opened up for telehealth and the home setting. Medicare has just approved total knee replacements and coronary interventions for the ASCs, but some is also market level. So you think about the level of payer activism and how much their steering care and also the growth plans of providers in the local market.

Rae Woods:
And Paul, you just got at another factor that's maybe not happening in the US that we are seeing play out in some of these public systems.

Paul Trigonoplos:
Yeah, that is the backlog. So the deferred care or missed care that happened and it's still happening from the pandemic. A lot of that is taking the form of electives that are now on a backlog that public systems have to go through. Some numbers ... the UK as of January had 6.1 million people on their backlog list just Ontario alone as a province had over a million.

Rae Woods:
And these are for surgeries?

Paul Trigonoplos:
These are elective procedures, some surgeries, some diagnostic. This is generally the stuff that they assume you won't get more sick by delaying the service. But the numbers keep growing.

Rae Woods:
Paul, I'm going to ask maybe a silly question. Can those countries just add more beds? There's a backlog that we see in other countries that we don't see here in the US. Is there appetite to hospital build our way out of this?

Paul Trigonoplos:
Hospital building and renovation is still happening. Some of these countries have old facilities, they just need to be up kept. But the focus politically now is much more on building and opening up a more diverse set of care sites. Things like ASC, which historically aren't really very popular outside of the US. Poly clinics in the community, these subacute facilities that are basically a multidisciplinary site that you can go to the CGP or a specialist.

Paul Trigonoplos:
Other countries, we're seeing this in Italy and Denmark and the UK and Canada, there's more appetite now to just diversify and expand the number of access points because for most of these places, the hospital is just where you go for everything.

Rae Woods:
So there is a need and a recognition that something needs to get built. The question is, it a hospital or is it some of these other things that frankly, we still see being very popular in the US or growing in popularity in the US?

Paul Trigonoplos:
Yes, that's exactly right.

Rae Woods:
My understanding is that the backlog isn't necessarily a new problem. It might be a problem that is worse now though than it has ever been. And my guess is, that's the same for some of these other forces that we're tracking when it comes to Site-of-Care Shifts. Why are these forces accelerating now?

Colin Gelbaugh:
I already mentioned one which is, policy has been changing because of the pandemic to open up reimbursement and the ability of sites to perform different procedures. There's also other factors like unprecedented investment into healthcare. Growth of these alternate sites, private equity firms, investing, for example, is one factor.

Rae Woods:
There's one driver that you didn't mention and I'm a little bit surprised and that's consumer preference. Should that be part of the calculus here?

Colin Gelbaugh:
Consumer preference is a factor but it's always been a factor. The acceleration we're seeing today isn't necessarily due to consumers. Physicians, a lot of times are responsive to consumer needs, but they're still the ones driving a lot of these shifts at the end of the day. That's not the case for all Site-of-Care Shifts, if you look at something like Urgent Care, where it's the consumer making the decision, they're going to be the most important factor driving that shift.

Rae Woods:
What you're describing is a web and it might be a little bit hard for our audience to keep track of all the things we're talking about. There's all these different kinds of Site-of-Care Shifts. There are different forces that have accelerated or insulating factors that have broken down that make it more likely that these shifts will actually be threatening. But they play out differently depending on the shift.

Rae Woods:
I wonder if each of you can give me an example of how that might play out, whether it's surgical care, whether it's one of these more consumer preference like places. Give me an example that makes this real.

Colin Gelbaugh:
One example would be, in the freestanding space, freestanding imaging centers, for example. A lot of shifts won't happen unless you have some triggering event to catalyze those shifts to start happening. So if you have a payer in your market that starts to take a really hard line and say, we are not reimbursing hospital based imaging. That is something that could result in acceleration.

Colin Gelbaugh:
Whereas, let's take the flip side of that. With telehealth, we saw if explosive growth through the pandemic as patients got vaccinated. Some of the incentives, some of the rationale for, this is a safer option, wasn't there anymore. And so we saw a deceleration, so it can work in both ways.

Rae Woods:
Paul, what's an international example here?

Paul Trigonoplos:
I would like to focus on probably ASCs internationally again because it's such a new care model in other countries. It's a new care model because frankly the reimbursement hasn't existed until just now. Payers are starting to think about, maybe we can find a new reimbursement model for this high efficiency surgical site that isn't the hospital. But until then, it was just up to physicians if they wanted to find some business model to stand up in a joint venture and it was often economically unattractive because they just didn't have the reimbursement there.

Rae Woods:
But the backlog is so big that you have to be thinking about other sites of care?

Paul Trigonoplos:
Backlog's so big, there's so much demand to tap into. And a lot of these procedures, you can standardize and make a focus factory model to just churn through the backlog as fast as possible. And I think people are capitalizing on that opportunity.

Rae Woods:
At this point, we've talked about what shifts are happening and why those shifts are accelerating all over the globe. Now, I want to talk about how our listeners should be responding. We've started to give some examples of the Site-of-Care Shifts that we're seeing. I wonder if you can give me an example of some really impressive shifts that are happening in markets.

Colin Gelbaugh:
I think the best way to respond is to be proactive and continually assessing and monitoring the drivers influencing shifts, seeing what progressive orgs, your competitors, what they are doing. Some response strategies might be joint ventures and partnerships with physician groups and taking part in these alternate site options, it might be a pricing adjustment or it might be just deepening your relationship with consumers.

Rae Woods:
It's a lot of blocking and tackling that you just described, Colin. Which I think is tough because people imagine really creative strategy when it comes to managing through a disruptive force like Site-of-Care Shifts. But the answer you just described is very in the weeds.

Colin Gelbaugh:
Right. And it has to be in the weeds because Site-of-Care Shifts are a market level thing. Every market is going to look different based on what the types of providers look like and what payers are doing, what different entities are doing to accelerate these shifts?

Rae Woods:
So let's talk about one of those different kinds of markets. Paul, I understand that you have a really creative story about an organization that's taking Site-of-Care Shifts to a level that we haven't seen here in the United States.

Paul Trigonoplos:
Yeah. So this is a system out of Israel, and Israel is generally a good market to look at for a health system self disrupting its access points because it's an HNMO model. They can afford to move around where people access care to cheaper options.

Paul Trigonoplos:
On the psychiatric side, they actually are working with their payer to create a psychiatric bundle where basically, if someone comes to the ED and they think clinically safe to ... they can keep them healthy at home, they get a bundle to keep that person healthy at home with remote patient monitoring. And if that person remits in 12 months, they don't get paid. They went to the payer to propose this. They had to convince the payer to actually do this. It's totally flipped, at least in the US, you'd imagine the payer would be more pushy, right?

Rae Woods:
Yeah. That's completely backwards to how I would normally think of things going. Why was the provider proactive in asking the payer to do this?

Paul Trigonoplos:
Because they, and other health systems in Israel, are very tapped into the local tech startup economy. A lot of tech startups are able to plug into the healthcare business and keep people healthy at home, serve a lot of other uses as well. But they have just been on this journey for the last few decades of embedding technology into healthcare delivery to the point where now they're comfortable actually just disrupting their access models.

Rae Woods:
I love this example, but let me reveal to you what makes me worried about it. As innovative and provocative as it is, it also presents a new risk that the system just gets even more fragmented, which we all know is already a problem with healthcare in the US and beyond. So how do we balance, taking a proactive approach making some of these shifts happen without just further fragmenting healthcare?

Paul Trigonoplos:
And this is where I think it's more helpful to look away from that Israel example. They are able to keep all of their home care alternatives in check because they are so technologically advanced, they have a brain hub in their system that they can organize and understand all the non-hospital care that's happening.

Paul Trigonoplos:
But your average system is not that advanced, they are not that sophisticated. What they're doing instead is, centralizing the work and the change management and the identification of what service should shift somewhere else and the rollout and implementation of that shift. They're centralizing that into a dedicated team, a dedicated function to at least have a single view over what is happening? Where care is shifting? What the opportunities are? And then working with clinicians to get them off the ground.

Rae Woods:
I want to highlight something that you just said because our audience may have missed it. You said that managing Site-of-Care Shifts is actually a change management problem. Colin, frankly, you mentioned something like this earlier and said, a lot of this is a lot of blocking and tackling. It's looking at where your market is. It's managing the data, it's understanding the specific threats that you face from the payers and the disruptors and the competitive landscape in your specific area. And I don't think our audience would typically think of something like Site-of-Care Shifts as a change management problem. Do you have any examples of someone who's doing that change management really well?

Paul Trigonoplos:
Yeah. I think the best example we have is a system called West Morton Health and Hospital Service, they come out of Australia. They're a 350 bed hospital with four sites in rural Queensland, very under bedded for their population and they have the most drastic population growth in all of Queensland. So they really are in need of getting more ways to deliver care in a scalable fashion that isn't just in a hospital bed. They are really betting on a shift of virtual care. They partnered with Phillips to stand up a pretty comprehensive virtual care model and they can just tack on virtual care programs to this platform. So just one place in the Phillips system that all of their virtual care program sit. And they are just going to go service by service and put as many virtual options on that program as possible.

Paul Trigonoplos:
And they actually set up a dedicated team, it's called the Virtual Care Support Team. And they think about it and talk about it like a center of excellence. This team is responsible for doing all the data analysis to identify opportunities, to create new virtual models. They do financial forecasting and modeling. They get clinical buy-in. They implement the models along with the clinicians. There's a few other functions that they serve, but this is how they think of side of care shift specifically for them in the virtual space but I think it can be adapted. For them, it's a center of excellence in a single place where all of this institutional knowledge and muscle memory sits.

Colin Gelbaugh:
Change management is an issue. It's harder than just saying, we need physicians to start performing their surgeries in a surgery center. That's not easy to do when habits are entrenched.

Rae Woods:
Exactly.

Colin Gelbaugh:
But it's not just about that, it's about being smart about where you place new sites not to cannibalize yourself? What operational changes you need? What care model changes you need? It's a different facility, you have different staff and you need to be able to manage that change because it is different than what you've done in the past.

Rae Woods:
And that gets into not just how we respond but when do we respond? And frankly, that's the biggest question that I get from senior leaders. They loosely agree that Site-of-Care Shifts will happen, but many are not willing to cannibalize their own business. Especially, now after we've been living through two years of the greatest public health crisis of our time. So what advice do you have for leaders who are trying to understand when the right move is?

Colin Gelbaugh:
I think when is going back to those market variables, like when is the right time to make the move? But to answer your question about cannibalization, the easy answer there is, let's place sites not in our service area, let's put it in another service area and it's no longer a disruptive threat to me, then it's a growth opportunity.

Rae Woods:
Which is an interesting philosophical shift. Because I hear most people saying, we must be willing to disrupt ourselves. And you're saying there's another way, which is a growth path.

Colin Gelbaugh:
You have to have options and one of the benefits of the whole shift to outpatient is being closer to patients and not having just a central hub but moving towards a distributed model that's more convenient for patients. Also, allows you to reach more patients in new markets.

Paul Trigonoplos:
And I just want to add on to what Colin said, Rae, you mentioned that what you hear in the market is that we just know that Site-of-Care Shifts are happening. We actually do know this and we have data on it. Last year, KPMG did their survey of 200 healthcare CEOs across eight to 10 countries including the US. And they specifically asked about Site-of-Care Shifts. The question was, what is your stance on shifting the delivery of care out of hospitals into the community? 63% of respondents said it was a priority, 18% were doing anything about it.

Rae Woods:
My God, no.

Paul Trigonoplos:
Right. And then it goes a step further just specifically with virtual care, 66% said shifting from in person to digital care delivery was a priority, 7% we're doing something about it.

Rae Woods:
My goodness.

Paul Trigonoplos:
So there's a huge Gulf between intent and action here. I think internationally, the answer to your question, which is when you start embarking on this now that the cat's out of the bag and all these insulating factors have turned into tailwinds to push systems to shift care. I think the sooner the better.

Rae Woods:
If I'm honest with the two of you, I have questions about the role of the hospital period. Think about it, hospitals used to be the center of the health system. In fact, at advisory board, we used to call them hospital systems, today we call them health systems.

Rae Woods:
I want you to roll the tape forward for me in a world where care has fundamentally moved into the community, in a world where executives not just agree with the idea of Site-of-Care Shifts but are actually taking action and actually doing the change management. Well, do we need to change the way that we think about hospitals? Do hospitals exist?

Colin Gelbaugh:
My personal take, we will always need hospitals. The role of the hospital might change in the community. You could see a future where hospitals are serving more of the emergent need, more of the intensive care. And some of the routine surgical care, the physician office visits are pushed out into the community. I think that's probably the most likely scenario.

Colin Gelbaugh:
The other scenario is, hospitals respond. They reduce their cost structures, which is a lot of the driving force behind these shifts. And they are competitive from a cost standpoint operationally and that would translate to lower prices eventually or at least moderation of growth in prices.

Rae Woods:
Paul, what do you think the future of the hospital is maybe outside of the US?

Paul Trigonoplos:
I think what Colin said in just his first scenario is already happening in other countries. Denmark has been after this since the mid 2000s. They're the first country at the gate, legislatively they started repurposing acute care sites in 2007 into subacute facilities and community clinics. And then taking the saved money from their fixed cost infrastructure and reinvesting that into existing hospitals to make them like quaternary state-of-the-art facilities that are just acute and trauma sites. So the balance where you get care is more often than not in the community or just not in a clinical hospital in Denmark.

Paul Trigonoplos:
And we interviewed their VP of policy last year for this work and they said they're going to keep doing it and try to shift more outpatient visits into primary care into the community for the next 10, 15 years. This is the path that they're headed on and other countries, especially in Europe, but New Zealand, Canada, they're thinking and talking this way as well, just a little bit behind.

Rae Woods:
Well, Colin, Paul, when it comes to Site-of-Care Shifts, what is the one thing that you want leaders in the US and across the globe to take away from this discussion? Colin, let's start with you.

Colin Gelbaugh:
For me, especially from the hospital perspective, just keep in mind you don't have to take this line down. You can be an active participant in the shifts and benefit from them. It doesn't always have to be a negative thing and in fact, that is likely going to be the next phase of your growth, is in the outpatient space. And so being active there will ultimately benefit incumbents in the long run.

Rae Woods:
Paul, what about you?

Paul Trigonoplos:
I think internationally, it's important for leaders to recognize and internalize that this is a slow burn. This is going to happen year over year for the foreseeable future. And because of that, there's a big risk in where health systems are now, which is leaving this work as cited desperate work. We're just having it up to the clinicians of proposing new shifts or proposing new models.

Paul Trigonoplos:
There's a lot of gaps in the critical components that a system needs to elevate this to a strategic and purposeful level. We are actually coming out with a strategy gut check audit tool in the next couple weeks that itemizes all of the components of a good strategy and then allows systems to benchmark where they are against their peers around the world. So hopefully, that at least helps with some of the problem.

Rae Woods:
Way to tease upcoming advisory board resources. Stay tuned for more from Advisory Board International. I love it. Well, Colin, Paul, thanks so much for coming on Radio Advisory.

Colin Gelbaugh:
Thanks.

Paul Trigonoplos:
Thank you, Rae.

Rae Woods:
When it comes to Site-of-Care Shifts, it's easy for leaders to be pessimistic about what that will look like for their future and frankly for their of financial outlook. But I hope what you heard from Colin and Paul is that there's actually a lot to be optimistic about and that this can be the new growth path for today's health systems, whether that's in the US or anywhere around the globe. We have so much more to say on this. So remember, as always, we're here to help.