2022 Digital Predictions
Aaron Martin and Sara Vaezy of the Providence Digital Innovation Group
Each year, we share our thoughts about what we believe is ahead on the digital front in healthcare based on the synthesis of many, many, conversations with Providence operators and clinical leaders, industry leaders, VCs and entrepreneurs. Thanks as always for the conversations and your insights.
This year, much like 2020 and 2021, we expect the formidable business and operational challenges for health systems exacerbated by the COVID-19 pandemic to continue, with the workforce crisis being the most urgent. COVID and the workforce crisis are accelerating the change of how and where care is delivered and increasing competitive pressure from participants inside and outside of healthcare.
Because of the massive amount of capital flowing into healthcare driving new partnerships, models, and innovation, it is critical that health systems address how to remain relevant and viable in the new landscape. This year will be an inflection point—an opportunity for health systems to lean in and open the door for significant change through digital technology – and if they don’t, those who are already struggling as a result of the last two years, may not be around for much longer.
2022 Digital Predictions
Workforce Crisis Front and Center
In a recent OpEd, Providence CEO, Rod Hochman describes the healthcare labor shortage as a national emergency. Caregivers are understandably stressed and exhausted, and many are permanently leaving the healthcare workforce. The healthcare workforce crisis will be the top priority for every health system throughout 2022, creating opportunity for digital solutions that both support our care givers and create guided self-service options for consumers and patients.
- Digital Self-Service Must Scale. Moving work from the health systems to patient self-service is one large opportunity for health systems dealing with shortage of administrative talent. Patients want to take on basic tasks from health system staff through easy to use, convenient, self-service tools. We see an increased value for innovation that eases the way for patients without human intervention including patient self-service portals and navigation technologies that reduce burden on call centers and clinics. Conversational interfaces powered by natural language processing will play a role here as well easing the way for patients navigating through healthcare’s complexity. More to follow below.
- Digital Clinical Support. We also expect a new acceptance and appreciation for digitally-enabled clinical support tools that leverage caregiver time and expertise and broaden their reach. These tools will make the interaction between patient and provider more efficient. Behavioral health, chronic condition management, and whole health offerings that keep people healthy and reduce utilization fall into this arena as do tools that automate rote tasks such as clinical inbox management or documentation burdens.
- New, Digital-First Disruptive Models of Care. During the rush of deploying telehealth during COVID, a thin veneer of digital was laid across many offline models of care. Already overburdened clinicians were asked to support multiple models of care, both on and offline. In addition to making these platforms easier for clinicians and their teams to use, we need to launch new models of care which may compete and disrupt with our existing offline services. This self-disruption is by far the hardest task health systems have ahead of them, however it is also not optional. Soon, most health systems will encounter new, digital-first offerings driven by the national payor-providers, smaller venture backed disruptors, and big tech.
- Care for Caregivers. We see digital behavioral health solutions as critical in helping the workforce cope and get support as the pandemic continues. We believe that digital can play an important role in helping reduce caregiver burnout while better supporting patients.
Digital Patient Engagement, Personalization and Consumer Identity
We see consumer identity informed engagement becoming the basis for key health system initiatives. New competitive forces and consumer expectations evolved quickly during the pandemic, and 2022 promises a transition from check-the-box “we have telehealth” toward sophisticated and highly personalized consumer engagement efforts.
- Consumer Identity. The basic first step to engagement and personalization with a patient is knowing who they are digitally via core technologies like Single Sign-On (SSO). In addition to eliminating the friction of multiple logins, SSO provides health systems with a single patient identity around which a 360 view of the patient can be captured. This identity then drives personalization and engagement programs based on the identity’s profile. An authenticated experience with single patient identity that fully utilizes what is known about the patient combined with population health data and evidence-based treatment approaches can improve outcomes, lower cost, and improve patient loyalty. In 2022, consumer identity will become the basis for new, uniquely health system patient experiences—experiences that technology, payor, employer, and retail operators simply don’t have the data access to deliver—giving health systems an opportunity for advantage.
- Engagement and Personalization. Health systems have a unique advantage in terms of engagement due simply to the very personal relationship with have with patients. They also have a disadvantage in that these patients only use health system services on average 2.5 times a year. Engagement will include streamlining and personalizing traditional patient experiences, and then will quickly evolve to engaging patients between episodes of care to support whole person health, further develop the digital patient profile, and deliver personalized experiences. This type of consumer-identity informed engagement will become the basis for key health system initiatives such as health equity, wellness, and disease prevention and management—and can be highly optimized for specific audiences of interest.
This year will just be the beginning of the healthcare system that consumers built. That means transitioning towards seamless omnichannel experiences that are as critical for healthcare providers as they are for retailers. We hope to see a type of health engagement that has an impact on everything from the overall healthcare business model to the experience, internal culture, and our overall health.
The Platforming of Consumer Healthcare
While the industry is beginning to talk about simple point-solution consolidation, we’re predicting a highly critical infrastructure shift toward strategic health system platforms. With telehealth now commoditized and significant advances of in the digitization of healthcare end points through point solutions (e.g. appointment scheduling, medical records, navigation services, etc.) we expect a platforming of digital health solutions—moving digital efforts from execution of tactical point solutions to development of strategic digital infrastructure within the health system.
- Platforming Healthcare. This will require high-level partnerships and technical collaboration between health systems, payors, engagement platform companies and big tech enablers to do right with the recent Cerner-Oracle announcement as a precursor. We expect to see health systems partner to load balance services and technologies as well—leveraging their national scale, clinical expertise and brand recognition to deliver new data, supply chain, revenue cycle, national network and home care solutions.
We also anticipate there will be a wave of consolidation as well as a continuation of huge infusion of capital into the market to support the creation of this new digital infrastructure that will support consumer and patient engagement.
With or Without Value, Disruption & Consolidation will Continue
As such, we see no end in sight to the disruption and industry consolidation that has been in full force over the last 18 months.
- Consolidation of Business Models. Companies with new models and innovative solutions that are showing success will continue to become targets for consolidation by the organizations with proven models as a way to reduce total cost of care. Acquirers will be national payor-providers who are disrupting markets through acquisition of both traditional and new models of care.
- Consolidation of Technology Platforms. The implications for platforming of consumer healthcare is consolidation of SaaS providers as part of larger digital platforms. Acquirers include Big Tech (Oracle, Microsoft, Google, Amazon) and Big VC/PE (General Catalyst, a16z, etc.) who are funding consolidation through massive growth/PE rounds.
Digital Navigation Powered by AI
The new digital infrastructure and the engagement and digital transaction volume that it aims to drive, are irrelevant without digital and AI-powered navigation that guides patients through healthcare and wellness journeys. A guided experience has long been an aspiration for serving patients, however, health systems have consistently fallen short.
- COVID Launched Patient-Facing AI. COVID drove the first real-life, highly-adopted use cases for AI-powered assessment, screening, and triage use cases – surfacing through chatbots living on digital properties like web pages and mobile applications.
- Move to AI Navigation. Building on the success of these chatbots to get folks the care they needed in their homes, AI-powered digital assistants are now being investigated for many use cases – such as booking the right next appointment for my needs as a patient, paying my bill, refilling my prescription, etc.
This will be the year where we see an explosion of these real-life use cases and their application for patients. It will require deep integration and understanding of the operating workflows as well as the business logic for health system operations to be surfaced in the context of digital assistants. Health systems will need to get onboard.
Payor Provider Convergence
Consumers don’t care about the difference between a payor and provider. They want the information they need to manage their care everywhere. They also want a seamless interaction between the payor and provider. Very few examples of this desired experience exist; and where they do, they’re winning consumer hearts and minds.
True platforming of healthcare requires interoperability and collaboration between the different segments of the healthcare industry to create experiences for consumers that extend beyond a single channel of their health (payor, employer, provider, consumer). The ideal future state for consumers is a ‘no wrong door’ approach where regardless of which channel a consumer enters the healthcare system (provider or payor), they have access to the full breadth of information needed to manage their healthcare.
- Pay-vider’s Are Investing Heavily in Seamlessness. The “pay-vider” approach has created payors like United Health Group and Humana who are becoming healthcare companies with large provider and delivery services arms. Optum (UHG) is now the largest employed medical group in the country. Humana has stated that it is a healthcare company with an insurance arm.
- Health Systems Need to Catch Up. Health systems need to integrate with traditional providers and medical groups through payment models and unique delivery models, to develop tighter integration without building their own provider assets. The digital integration needs to be seamless as well.
- Health Systems that Have Captive Payors Have a Valuable Asset. Health systems that are fortunate enough to have already invested in a viable health plan need to quickly expand and leverage this asset.
- Health System Partnerships. Finally, health systems need to work together to build novel direct-to-employer models that have a national footprint to compete with the national pay-viders.
In either case, we expect this trend to continue and even intensify as outside disruption grows and healthcare as an industry becomes more competitive, while moving not only toward value-based models, but other forms of economic models as well.
Health System Business Model Bifurcation Accelerates
To that point, in a piece we wrote in 2020 about the evolution of business models, in particular the accelerated creation of a bifurcated market, where we posited that healthcare economic models were going to increasingly fall into one of two categories:
- Consumer-driven models unconstrained by historical insurance-driven payment mechanisms, and;
- Risk and value-driven models primarily for special populations with compressible costs
Over the last 18 months, there is strong evidence that this trend is in fact real and continuing. As such, we expect 2022 will contribute to the rise of new tech enabled services models around specific patient populations, conditions, and complete episodes of care.
For instance, 2020 and 2021 saw several major successful IPOs for the first generation of clinic models like One Medical, Iora Health (now acquired by One Medical), Village MD, and Oak Street Health. The next generation of these models such as Everside, CityBlock and Tia, will continue to gain momentum and drive new consumer- and employer-financing models such as subscriptions. These in turn will drive new forms of consumer-driven engagement.
A Reckoning for Medicare Advantage and Tech Adoption
Medicare Advantage has seen tremendous success in terms of its penetration and uptake over the last several years and is often heralded as the prototypical successful public-private partnership. However, 2022 will be a reckoning for Medicare Advantage. Value can no longer be only based on optimizing RAF-scoring and we’ll see real expectations for total cost of care management.
- Tech for the Medicare Population. As such, this will drive something that has historically eluded digital health – the tech enablement of healthcare for older patient populations. The pressure on Medicare Advantage programs to perform better under value-based models will necessitate that we shed old preconceptions that older people do not utilize technology (they do) and drive a wave of tech-enabled services combining care management and consumer-facing technology tools to enable high-value care delivery at scale.
We’ll check back in a year and see what we got right and what we got wrong—but most importantly, we’re looking forward to the discussions among the digital health technologists, ‘big thinkers’ and line of business owners and the hopes of sparking some of the new collaboration required to truly disrupt healthcare through digital.
Aaron Martin is the Executive Vice President and Chief Digital and Innovation Officer for Providence where he leads Digital, Marketing, and Ventures for Providence. Aaron is also Managing General Partner for Providence Ventures where he is responsible for early stage/venture technology and device investments for the $300M Providence Venture fund.
Aaron has more than 25 years of experience in product, ventures and technology, including leadership of the Amazon teams that transitioned traditional publishing from physical books to Kindle. He has experience as an executive/founder at two venture-backed startups and has held strategy positions at McKinsey & Company. He currently serves on the board of Wildflower Health, Avia, Xealth and Kyruus. He is also a board member of Presbyterian Healthcare Services in New Mexico. Aaron holds a BS in Economics and Music from Austin College and an MBA in finance and health care management from The Wharton School.
Sara Vaezy is the SVP and Chief of Digital & Growth Strategy for Providence leading digital strategy and roadmap, digital partnerships and business development, commercialization, technology evaluation and pilots, and digital thought leadership as a part of the Providence Digital Innovation Group. Sara also general manages the Growth and Consumer Councils for the Providence organization.
Prior to Providence, Sara was at The Chartis Group, a health care management consulting firm, where she advised clients on enterprise strategy, payer-provider partnership, and the development of population health companies. She holds a BA in Physics and Philosophy from the University of California Berkeley, and an MHA and MPH in Healthcare Policy from The University of Washington’s School of Public Health.
About the Providence Digital Innovation Group
The Providence Digital Innovation Group is a team of strategists, software engineers, marketers and investors focused on digital innovation that further Providence’s vision of “Health for a Better World.” The organization works hand-in-hand with clinical and operational teams at Providence to identify opportunities and deliver innovative solutions through the use of technology that will have an impact on patients, clinicians, communities, and the strength of our organization
As leaders of the Providence Digital Innovation Group, we are fortunate to have a unique vantage point not only as individuals who are leading digital transformation from within a health system, but also as innovators who are constantly monitoring the market and innovating through technology incubation, to serve not only our own health system, but others as well.