Life Sciences & Industry: Strategic Priorities for CEO Health System Stakeholders

Editor’s note: Sg2 Principal Jeff Moser contributed to this post.

The COVID-19 pandemic accelerated a myriad of operational and strategic priorities for integrated delivery networks (IDNs) and brought to their attention the importance of an agile, rapid-cycle strategic planning process. In today’s health care climate, it has become clear that partnerships are not only beneficial, they are necessary, and this realization creates a unique window of opportunity for Life Sciences & Industry (LSI) firms to not only tune in to the diverse challenges facing IDN leadership and their local markets, but also to become the trusted supplier and strategic partner for key IDN customers.

In order to provide LSI firms with a direct channel to IDN customers and translate Sg2 perspective on what LSI firms need to do differently in a post–COVID-19 world, we recently hosted an interactive, voice-of-the-CEO panel discussion with a select group of our LSI members (representing pharma, medical devices, diagnostics, logistics, purchased services, etc), along with three CEOs from IDNs across the country with different organizational structures, patient populations, and strategic, clinical, operational and financial challenges.

Below we have distilled IDNs’ key strategic priorities from the main panel discussion and individual CEO breakout sessions to provide LSI firms with specific collaboration opportunities. (Sg2 members can watch the panel discussion on-demand on our Sg2 Intelligence member website.)

Leverage digital health capabilities to reengage and activate the most vulnerable patient populations

Medication adherence remains a challenge that disproportionately disadvantages select patient populations. The need to reduce variability in adherence between commercially insured populations and Medicaid creates challenges in terms of managing avoidable utilization, population health and total cost of care. IDNs are increasingly aware of “hot spots” and underserved patient populations through deep knowledge across their care teams and insights from querying patient-level analytics, but there is a gap that LSI firms can help fill when it comes to having the right set of resources to prioritize and seamlessly implement targeted interventions, whether digitally enabled or culturally nuanced.

Find the right solutions to accelerate consumerism strategy

For at least one of the participating IDN organizations, consumerism strategy has become a top priority due to COVID-19. Perhaps long overdue, the need to shift from a patient-centric to a consumer-focused approach creates the need for a better, deeper understanding of both existing consumers of health care services, as well as prospective and future consumers (prior to becoming patients).

Two areas in which IDNs will need help include how to reengage various patient populations that have become harder to reach and activate due to COVID-19 and how to collaborate on patient digital health solutions. LSI firms can support IDNs with their consumerism strategy by providing insights on how to best educate and engage patients and providers, as well as how patients use (or fail to use) innovative therapies.

Move beyond bricks and mortar to appropriately expand footprint and ambulatory capacity while improving efficiency

Our CEO panel told us that while volumes are quickly rebounding, the mix of activities may have forever changed. Pent-up demand for elective procedures creates a short-term need to optimally deliver on delayed procedures for a range of patients who have been reluctant to seek care or were required to wait due to state mandates, pauses on elective procedures, organizational capacity and the redirection of resources to manage COVID-19 cases. Additionally, some activity may not return at all and permanently shift to alternative care sites. For example, there was a noted decline in ED visits with a rise in urgent care visits, as well as the expected partial—but permanent—shift to virtual visits that displaces traditional in-person visits.

Care shifts will accelerate, which has implications for IDNs’ capital investment, workforce needs and where products will be utilized. Impact will vary by service line, market environment and organizational readiness, but watch for the care shift to ambulatory surgical centers.

There is also heightened attention on operational excellence. Reengaging with patients and appropriately bringing back higher margin elective procedures creates opportunities for LSI and IDNs to partner on activating patients across the care continuum and using product value propositions to improve turnaround times, facilitate bedside testing, reduce length of stay and avoid unnecessary readmissions.

Make the care continuum work for episodic patient interactions

One of the participating IDN organizations is located in a market with adjacent ski resorts and faces a unique challenge: how do you provide a continuum of services to patients who may only need care for acute orthopedic services? The difficulties of connecting health records to providers serving patients across geographies will remain a challenge for all providers regardless of their population health focus.

However, LSI firms can position themselves as invaluable strategic partners for IDNs by ensuring their patients stay connected to providers. We like the range of innovative partnerships currently taking shape such as those that are helping improve care for chronic disease patients, preventing unplanned admissions and optimizing adherence to cardiac rehabilitation.

Define the organizational role in public health

COVID-19 has been one of the greatest health care challenges we have experienced in recent times, and while health systems and pharma/diagnostics manufacturers may have benefited from a positive public health image as a result of meeting the challenge head on, the CEO panel agreed that their organizations do not have a choice when it comes to managing public health and addressing social determinants of health and inequities in health care access—they must expand their roles. However, each CEO also recognized that solving for public health does not rest solely on any single stakeholder across the health care ecosystem.

We encourage our LSI members and other LSI firms to focus on finding creative solutions to support IDNs to ultimately transform health care for the most vulnerable populations and take ownership in public health awareness.

Empower and engage an exhausted workforce

COVID-19 has elevated the importance of managing our health care workforce. While burnout was an evolving theme before the pandemic, it has been rising in strategic importance for each of the CEOs from our panel. Ensuring a sustainable workforce that is safe, engaged and operating at top-of-license to impact patient outcome creates opportunities for LSI firms to lean in. This may mean helping to improve operational efficiency and timely information and diagnosis or simply providing education around new products and guidelines.

Offer competitive pricing

Sg2 continues to highlight the importance of broadening LSI firms’ IDN account strategy to look for strategic partnership opportunities beyond the “big” IDNs. One participating CEO articulated that size should not be the sole driver for offering competitive pricing on product and supplies, nor a deterrent to being bold and exploring strategic partnerships. Relatively speaking, a smaller organization may in fact enable a faster, more nimble partnership which—regardless of the focus—will help demonstrate proof-of-concept and any potential return on investment.

Strategic areas we did not hear about…

While neither consolidation nor convergence were direct topics discussed, Sg2 still believes these two areas will be important in 2021. The ongoing consolidation within and across the health care industry and unprecedented investment across the ecosystem in analytics and digitally enabled solutions positions us over time to solve for many of our health care challenges including access, affordability and equity. The first quarter of 2021 substantiated the ongoing momentum in investing in new health care concepts, solutions and start-ups with investments hitting $8.5 billion, potentially reaching 30 times what was invested a decade ago. While this needed investment holds promise, the convergence across the industry also raises the risk of too many new entrants and competition for IDN executives’ “mind share.” However, remember that one-size-fits-all does not exist. Also, with the increasing competition among new disrupters and market entrants, there is the risk of limited mind share among IDN leadership, thus emphasizing the importance of LSI firms being relevant in conversations and providing the right solution to solve for a “big problem.”

While we still hold true to the 5 Cs of disruption for IDNs (care shifts, consumerism, cost optimization, consolidation and convergence), the spirit and tangible examples from our IDN CEO panel proves there is an interest and a need to explore different ways of transforming health care—ways that accelerate strategic opportunities and focus on how to meet our communities’ needs vs purely solving for short-term financial circumstances. This spirit needs to be embraced by the wider health care sector, and LSI firms have distinct opportunity to advance relationships and partnerships in an unprecedented time of need. Now is the time to shift the conversation and be bold with driving improved affordability, access and appropriate utilization of products and services.

Our Sg2 LSI Consulting team combines analytics, industry knowledge and expertise to provide a “voice of the customer” perspective that helps nonprovider organizations understand the transformation of health care and develop strategies to become a more value-focused partner. Reach out to us for help with segmentation and archetyping, value-based solutions strategies, disease-specific value analysis and future demand forecasting.

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