The healthcare industry has been primed for healthcare reform and according to GHX, 2014 will bring even more change to the business of healthcare. The company is predicting that 2014 will be a year of great healthcare evolution, not necessarily revolution, with organizations focused on lowering costs while improving patient care. GHX has identified what it considers the biggest trends for the coming year: industry consolidation and partnerships, collaborative approaches to industry issues, cooperation between healthcare trading partners and institutions and having technology closer to the point of care to gain real-time analytics for better decisions for patient outcomes.
“For years, we’ve heard about how ‘far behind’ healthcare is technologically compared to other industries. To meet the demands of healthcare reform we have to close that gap,” said Bruce Johnson, CEO, GHX. “Over the past few years, we’ve all become smarter practitioners and consumers of healthcare, and I believe we’re on the cusp of something great. The way to mature as a healthy industry is through more deliberate collaboration. We operate in such an integrated business ecosystem that we have to apply the disciplines of working together to deliver on the promise of an effective healthcare system.”
Mergers, Acquisitions and Partnerships—Consolidation and Coordination across the Continuum of Healthcare
While a large part of the Affordable Care Act focuses on the area of patient coverage, it also provides many different incentives to keep people healthy by being accountable for patients during their entire lifespan. GHX predicts the healthcare industry will continue to see a preponderance of merger and acquisition (M&A) activity, as well as a large increase in partnerships. M&A is nothing new in healthcare, but a large part of these deals will be driven by the fact that care is moving outside of the traditional healthcare setting, such as home healthcare, nursing homes, retail clinics and sub-acute centers. Healthcare organizations are also increasingly looking at establishing partnerships within their care delivery system to improve overall care; connecting with patients not only when they are sick, but being actively involved with them from a wellness perspective.
According to Marco de Vries, executive director, Strategic Marketing, GHX: “We see consolidation as a predictable outcome of accountable care, reimbursement declines and the general financial stress in the system. But what appears to also be driving some of the M&A activities and new partnerships is the requirement for a broader continuum of care. In the future, healthcare organizations may see better control over the quality of care as they can become more accountable for ‘360 degrees of patient care’—not just sickness and recovery, but overall wellness too.”
Shared Technologies to Address Common Industry Problems
In 2014, GHX predicts we’ll see healthcare leaders seek out shared technologies that they can use to collaboratively address common industry problems. The healthcare supply chain provides a perfect opportunity to demonstrate the value of this approach because the costs caused by inefficiencies and lack of visibility are shared by all parties: manufacturers, distributors, group purchasing organizations (GPOs), and hospitals and healthcare systems.
According to Karen Conway, executive director, Industry Relations. GHX: “There is an emerging market trend toward business models that allow customers to share versus own. Think about Avis’ Zip Cars ’car sharing’ program that offers an alternative to owning or renting. In healthcare, cost constraints create the motivation for organizations to find opportunities to share technology, rather than build or buy their own point-to-point solutions. Some of the best applications in healthcare have been built around the need to improve collaboration and visibility to things such as: data used by parties involved in purchasing contracts, better tracking and management of devices within the implantable device supply chain, and pharmaceutical track and trace.”
Increased Cooperation Across All Healthcare Parties
While the idea of strengthening relationships between healthcare organizations has been a recurring theme, GHX predicts that 2014 is a critical year for healthcare to increase cooperation and collaboration among parties, including hospitals, suppliers, distributors, regulators and GPOs, to name just a few. One way these organizations will get there is through increased visibility and data sharing. Many healthcare trading partners have realized this is a critical way to better understand what drives positive outcomes at lower costs—and this will begin to happen on a global scale. Prepare to see more cooperation with regulatory bodies around the world (we saw a hint of this in 2013 with the FDA working closely with its counterparts overseas to develop the UDI rule) to start working toward more standardization around how the business of healthcare is done globally.
According to Derek Smith, chief commercial officer, GHX: “The pressure on costs, quality and outcomes will force even once adversarial relationships into cooperative ones. Moving toward the trend of more visibility, collaboration, standardization and synchronization between institutions will ensure the healthcare industry becomes more efficient while operating in a way that delivers a strong value to outcomes ratio.”
Big Data: The Next Step in the Evolution to Get Closer to the Patient
With the healthcare industry laser-focused on quality patient outcomes, the next step to get even closer to the patient to drive quality care lies in the use of big data. Specifically, hospitals and other healthcare organizations will be exploring ways to get technology (i.e., sensors, scanners) closer to the delivery of care (i.e., triage, ORs, recovery) to capture real-time data and compare it against large quantities of existing data to make better decisions to improve patient outcomes.
According to Steve Cochran, chief technology officer, GHX: “From a technology perspective, we’re embarking on a time of ‘sensing and understanding’ in healthcare. Hospitals and other organizations will be looking to capture data closer to the patient, closer to ‘the action,’ and analyze that data to make smarter, faster, better decisions that result in quality patient care and positive outcomes. Other industries have embraced the notion of big data analytics successfully, and we believe that 2014 is the time when healthcare will as well.”
Viewing the Supply Chain as a Strategic Asset
With every healthcare organization focused on the goals of cost reduction and improved outcomes, GHX predicts the ones that succeed in 2014 will be those that look at the supply chain strategically. Other industries, most notably retail, have mastered the art of the supply chain. And while it’s possible to overuse the comparison—tracking a box of cereal is not the same as tracking a potentially life-saving device—there are lessons to be learned from other industries that approach the supply chain as a strategic asset.
According to Rachel Hall, vice president, Product Management, GHX: “Healthcare organizations—and especially their CFOs—will look for the supply chain to help healthcare become a more efficient system. Supply chain importance will grow as organizations recognize it’s not just a process to get more volume at a lower cost, but really an asset to work collaboratively with trading partners—to reduce inefficiencies, improve accuracy, increase visibility and transparency, and provide analytical intelligence to help organizations make smarter, better, faster decisions.”