As the healthcare industry transforms, organizations are moving to a more connected future. Connected Health Ecosystem (CHE) 3.0 is a model that organizations can use to assess how they are progressing in becoming a mature, connected health ecosystem.
At a November workshop sponsored by PwC at the Becker's 10th Annual CEO + CFO Roundtable, Inshita Wij, director, customer transformation, PwC Strategy&, moderated a panel discussion on connected health ecosystems including:
- Josette Beran, Managing Director, Enterprise Strategy & Value, PwC Strategy&
- Patrick Maher, Partner, Customer Transformation, PwC Strategy&
- Rob Lemos, Senior VP of Strategy & Growth, Fort Lauderdale, Fla.-based Millennium Physician Group
- Paul Leinwand, Partner, Enterprise Strategy & Value; Author, Beyond Digital and Strategy That Works, PwC Strategy&
Three key takeaways were:
- Healthcare models are evolving from fee-for-service hospitals to connected ecosystems. The integrated delivery network (IDN) approach is a first step from a fragmented, volume-driven environment to a model that emphasizes partnerships, alignment of incentives and higher value. Systems still in this past ("1.0") environment are trying to drive utilization through clinical episodes. They are focusing on inpatient care, improving quality and expansion of physical assets.
The IDN present ("2.0") way of organizing and delivering care has moved the focus away from the hospital alone, into a health system. The focus is on gaining market share and extending clinical episodes to provide more comprehensive care outside of the hospital.
Looking to the future, it will be the Connected Health Ecosystem (CHE) that addresses today's systemic challenges. As individual systems move toward this "3.0" version of healthcare, there will be a greater focus on health and well-being within an overall ecosystem, designed to better serve patients better by more effectively leveraging and connecting community resources. This means making investments to deliver on the lifetime value of consumers/patients, not just the transactional value of a procedure. Mergers and joint ventures will be made strategically to provide longitudinal, whole-person care, with a continued emphasis on digital and virtual health, and market changes will drive more consumer-friendly new products. - Organizations place different priorities on various dimensions of CHE 3.0. Eight dimensions frame the strategic agenda for health systems operating in the dynamic and interconnected CHE 3.0 landscape of the future. These are:
- Consumer
- Care model
- Workforce
- Risk and value-based care
- Data analytics
- Technology and infrastructure
- Operational performance
- ESG
A much more personalized and proactive version of those dimensions, from patient to staff to system, will take shape in the evolution from a 1.0 to a 3.0 environment.
Not every organization is the same, and each must make deliberate choices to enhance specific dimensions aligned to their strategic role in CHE 3.0. One important factor in the journey to 3.0 is the market in which an organization sits, as each market has very different pressures.
"Is the future the same for everyone? No. Even today, the present isn't the same for everyone — you have community systems, you have academic systems and you have a whole bunch of things in between . . . It's very important for executive teams to begin to make choices about where they need to excel and improve their performance," Mr. Maher said.
- Alignment and funding are critical to successful partnerships in CHE 3.0. Stakeholder alignment — committing to a single vision and working together to achieve that vision — and having clearly defined funding paths, whether through capital prioritization, alternative funding sources or another option, are the top needs for successful partnerships in CHE 3.0. Establishing trust can be challenging but removing that barrier will lead to collaboration and cooperation that benefits all stakeholders.
For example, hospitals and physician groups can both reap significant benefits through partnership. Hospitals are losing $150,000-200,000 per primary care physician, while physicians are looking to streamline patient acquisition and funding. By working together, CAHPS scores improve and inpatient utilization increases, while the cost of patient acquisition decreases and funding broadens due to access to more patients across different lines of business.
Industry evolution to CHE 3.0 requires a shift in perspective. "It's very hard for any organization to really have the skills, competencies and capabilities to do everything well," Mr. Leinwand said. Recognizing that these big challenges require that people and health entities must work together is a critical step to aligning incentives and solving problems the right way.
To learn more about how PwC can help your organization please visit https://www.pwc.com/us/en/industries/health-services.html or contact us_healthindustries@pwc.com.