The healthcare industry has undergone tremendous transformation in the past three years, driven by the global pandemic. The pandemic has forced healthcare providers to adopt new technologies and innovative solutions to cater to the growing demand for healthcare services. However, this disruption is not just limited to the pandemic; there are several other factors, such as Big Tech and Retail, Vertical Integration, Regulation, Reimbursements, Supply Chains, Labor Costs, Clinician Shortage and Burn Outs, and now, ChatGPT, that are driving significant changes in the healthcare industry.
The emergence of Big Box Retail and Big Tech companies such as Walmart, Walgreens, Amazon, Google, and Apple has brought about a paradigm shift in the healthcare industry. These companies have disrupted traditional healthcare models and introduced innovative solutions transforming healthcare services.
For instance, Amazon has been making significant investments in healthcare in recent years, including the acquisition of online pharmacy PillPack and the launch of Amazon Pharmacy. With its vast network of warehouses, delivery infrastructure, and data analytics capabilities, Amazon can potentially disrupt the pharmacy and primary care markets by offering consumers more convenient and affordable healthcare services.
Walgreens, a pharmacy chain with over 9,000 locations in the United States, has expanded its healthcare offerings. In 2019, Walgreens announced a partnership with primary care provider VillageMD to open clinics inside its stores and to open 500 clinics by 2025. These clinics will offer various services, including preventative care, chronic care management, and behavioral health services.
Walmart, the world’s largest retailer, has also been expanding its healthcare services with the launch of Walmart Health. This primary care clinic offers various services, including primary care, dental, and behavioral health. Walmart is also partnering with healthcare providers to provide telemedicine services to its customers, making it easier and more convenient for them to access healthcare.
Overall, the entry of these major players into the healthcare industry is likely to disrupt the traditional model of primary care and pharmacy services by offering more convenient, affordable, and accessible healthcare services to consumers. This trend will surely disrupt referral patterns to your local hospital, forcing new partnerships and financial models to ensure solvency for inpatient services in our communities. While this disruption could lead to better patient outcomes, it may also raise concerns about patient privacy and the quality of care these non-traditional healthcare providers provide.
Vertical integration is another trend that is transforming the healthcare industry. Hospitals and healthcare providers are merging with other healthcare organizations, including health insurance plans to gain more control over the entire healthcare continuum, from primary care to specialty care. This vertical integration can lead to more coordinated care, improved patient and care team experience and outcomes, and cost savings, if that is the dominant intention of the integration. More dubious purposes to benefit financially through market dominance will likely not result in a better healthcare system worthy of our family and friends.
Regulations have always been a significant factor in the healthcare industry, but the pandemic has highlighted their importance even further. The pandemic has led to increased scrutiny of healthcare providers, with regulatory bodies implementing strict guidelines to ensure patient safety. Healthcare providers need to adapt to these regulations to ensure compliance and provide high-quality care. However, the demands of these good-intentioned regulations have contributed mainly to physician burnout and our nurse and physician shortages threatening future generations.
Reimbursements are another critical factor driving innovation in the healthcare industry. With the rise of value-based care models, healthcare providers are incentivized to deliver high-quality care while reducing costs. This, along with the significant adoption of virtual care over the pandemic, has led to innovative solutions such as telemedicine, remote patient monitoring, digital therapeutics, and other digital health tools to help providers achieve these goals.
Supply chains have also come under increased scrutiny during the pandemic, with disruptions in the global supply chain causing shortages of essential medical supplies. Healthcare providers need robust supply chains that can withstand disruptions to ensure the continuity of care.
Labor costs and clinician shortages, and burnouts are also significant factors driving innovation in the healthcare industry. Healthcare Finance News recently shared that compared to before the pandemic, total hospital expense per patient, as measured by median total expense per adjusted discharge, rose 22.5% – due mainly to a 24.8% increase in labor expense per adjusted discharge from 2019 to 2022. Total costs rose 17.5%, and total labor expenses jumped 20.8% over the same period. To respond, providers are leveraging technology solutions to automate routine tasks and reduce the workload of clinicians. This could improve patient outcomes, reduce costs, increase efficiency, and make care delivery fun again for our clinicians.
Stay tuned next week for the next article in this series, where we’ll discuss how modern technologies are poised to address these challenges and shape a digital healthcare system capable of responding to whatever comes next.
Looking for part 2? You can find it here: https://bit.ly/3H5TyD8