Healthcare in 2040 by Array Architects

Healthcare in 2040 By Neil Carpenter, Jillian Barbaro, Isabelle Moratti, Alexandra Laramee

INTRODUCTION Array wanted to break out of the incremental nature of most health care evolution white papers and focus on long term trends that might not be felt strongly for a decade or more. Just as a major pandemic was eminently predictable but rarely addressed because it was never a likely near-term event—so are the structural forces we describe in our papers. We interviewed 16 leading healthcare executives across the industry, including representatives from the provider side, payor organizations, technology innovators, and academia and asked them to visualize health care delivery in 2040. The study documents and expands upon the perspectives of these leading thinkers and the four major trends that emerged from these interviews. Each installment unpacks one of the four trends: • Deterioration of trust: following the societal trend, patients will no longer simply listen to what the provider says. As the care delivery process becomes more participative, what are the implications? • Segmentation of healthcare: the big sort is coming to healthcare practices and different demographics will demand different focuses. • Whole person care: an integrated vision of health will mean a much broader definition of physical and mental wellbeing, with less traditional providers and methods of care. • Evolution of healthcare settings and employment: a major shift in how health care dollars are spent coming. Discover how care settings and the workforce will be the key drivers. Not only do we provide research behind why we believe healthcare is heading this way, but we also provide implications for how different players within the industry can prepare themselves to be successful for what is to come. New installments of the study will be issued every week. The first follows. To contact the authors with questions, comments or strategic planning support, see page 38 for their information or contact us.

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INTERVIEWEES Shahid Shah Co-Founder of Citrus Health (technology at home), Founder of Netspective Communications (technology strategy & sale), Health Sciences & Technology Advisor at Larta Institute.

Rasu Shrestha, MD, MBA Chief Strategy & Transformation Officer, Atrium Health

Robert Kramer Marcy Carty, MD, MPH EVP of Strategy at Ready Responders

Paul Keckley The Keckley Group, Healthcare Industry Research and Policy Analysis

Trenor Williams, MD

Founder and Fellow at Nexus Insights; Co-Founder and Strategic Advisor National Investment Center for Seniors Housing & Care

Sara Vaezy Chief of Digital and Growth Strategy at Providence Health, Health Evolution Forum Fellow

Dan Durand, MD

CEO & Co-Founder Socially Determined

Chief Clinical Officer & Chair of Radiology at LifeBridge Health

Tom Cassels

Braden Lambros

President at Rock Health

Executive Vice President at Olive

Michael Tangrea, Ph.D. Endowed Professor in Biology, Former Scientific Director of Innovation & Research

Sunny Ramchandani, MD President and CEO, Stream Health Group, Former Payor Executive

Peter O’Neill

Susan Mani, MD

Executive Director of Cleveland Clinic Innovations & Innovation Consultant

Payor Executive, Former Chief of Population Health at LifeBridge Health

Mark F Victor, MD

Alan Pitt, MD

CEO, Cardiology Consultants of Philadelphia

Neuroradiologist with Dignity Health and Co-Founder of Vitalchat Telehealth

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TABLE OF CONTENTS The Erosion of Trust in Healthcare PAGE 5

Segmentation: The Coming Healthcare Divide PAGE 16

Whole Person Care PAGE 24

Healthcare Spending Will Reshape the Workforce – Here’s How PAGE 32

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The Erosion of Trust in Healthcare

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Healthcare institutions that deliver “good medicine” and demonstrate the ability to engender trust will have far better market and clinical outcomes. Historically trust has been assumed in the health care marketplace; however, as the COVID vaccine situation makes abundantly clear, trust is not inherent to the patient-provider relationship. This paper seeks to describe the micro and macro factors partially responsible for the eroding physician and healthcare system influence as well as a set of recommendations for rebuilding trust. The nature of the factors varies widely, some bold and obvious to laypeople, others barely distinguishable in healthcare settings and easy to forget when strategic planning. Micro-level contributions include large, well-branded entities competing for the attention of patients from their local providers. These disruption forces started with the growth of direct to consumer (DTC) advertising but rapidly took many different forms. The urgent care explosion, the growth of freestanding emergency departments, the rise of Dr. Google, and the introduction of new devices offering to empower consumers with diagnostic insights (e.g., genetic traits, sleep, heart rhythms, etc.) have all provided the healthcare consumer with knowledge and choice. With a newly empowered healthcare consumer in mind, we contemplate if increased population comfort with drug legalization and self-medication through less-traditional means (e.g., supplements, meditation, diet, etc.) are evidence of or a response to the degradation of trust in traditional healthcare providers and their influence. Historically the health care system has tended towards independent companies building independent relationships with consumers in place of integrating into one care team. While a one care team model would build trust with patients and be in their best interest, it may be a cost that companies cannot, or do not want to, bear. As a result, the proliferation of these disrupters has continued and while each incremental step is geared toward empowering the consumer and improving their health, the collective effect is loose attachments across multiple providers and products. Macro level factors progressing the need for trust-enhancement as part of medical care delivery include the overall declines in trust in American society and systems, particularly among younger generations less deferential to perceived sources of expertise. Over the decades one of the constants in American healthcare has been a strong patient-to-physician relationship. In 2020, Gallup reported 51% of respondents saying they had a “Great deal” or “Quite a lot” of trust in the medical system. This level of trust in both individual providers and the “system” overall is an outlier compared to other institutions and peer relationships. Gallup’s survey reported that the percentage of U.S. adults’ trust in institutions has gone down across the board. For example, in 2005, 53% of people had a “Great deal” or “Quite a lot” of trust in Church/Organized Religion, but by 2020 only 42% reported that level of trust. As for institutions such as Congress, the percentage dropped from 22% in 2005 to 13% in 2020.i There is also a growing lack of trust in other people. Pew Research reported that as of 2019, 47% of U.S. adults believe that most people cannot be trusted. Most recently, vaccine hesitancy—particularly for children whose pediatricians are almost universally recommending the vaccine—may be a signal that these same declining trust dynamics are beginning to affect healthcare.

US Trust in Institutions

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Disruptors to Healthcare Relationships Direct to Consumer Disruptors In 1997, money spent on health-related direct-to-consumer advertising was $2 billion. By 2016 it was just under $10 billion.ii Even adjusted for inflation, that equates to more than a tripling in spending. The investment in the trust-yourself-and-this-product messaging echoed by advertising seems to be working. A study by Kravitz, Epstein, and Feldman showed that 75% of patients were likely to ask providers about a drug they saw on TV while ~25% reported that they already had. Out of those that had already asked their doctor for a specific drug advertised to them, 16% said they were prescribed that drug. The natural next question became: “What happens to the relationship and trust between patient and provider when patients, equipped with knowledge from advertisers, influenced treatment decisions?” This same study provides an answer: 16% of patients questioned their provider’s expertise upon being denied the drug they had requested after seeing it on TV and another 23% said if they were denied, they might switch clinicians.iii

Urgent Care Could changes in the local and known provider/patient relationship dynamic account for the steady and continued growth of urgent care centers over the past ten years?iv In 2013, there were 6,100 urgent care centers as compared to 9,616 reported in 2019. Much like the rapid growth in the number of facilities across the nation, there has been an explosion in urgent care visits. Between 2008 and 2015, a research study done by JAMA Internal Medicine showed that visits to urgent care clinics increased by 119% among commercially insured Americans under the age of 65.v The growth in visits to urgent care facilities could also be indicative of the growing belief that a primary care visit is not necessary or desirable when urgent care provides a faster, more efficient treatment option for sudden onset sickness. The industry trends show that urgent care patients tend to be young adults

Change in Urgent Care and Emergency Room Visits per 1,000 Members 120 100

and families. A Kaiser Family Foundation poll found that 26% of

urgent care utilizers did not have a primary care doctor. Most

notably, among future healthcare utilizers (those aged 18-28 in

this survey), 45% of them denied having an assigned PCP.

Motivated by the growth in urgent care and the obvious

0 2008

preference for fast, efficient care delivery models among younger care seekers, online care delivery companies are developing the next urgent care iteration: online urgent care services. Dispatch Health created a platform that allows patients to

45%

2016

Percentage of Respondents (by Age Group) Without a PCP

make appointments through their app or website. Within a few hours, a member of their team makes an in-person, home visit

28%

to evaluate the patient and provide recommendations. In 2021,

18%

Dispatch Health reached a total valuation of $1.7 billion.vii Heal,

12%

a tele-based healthcare company, developed an app for house calls and telehealth visits with clinicians, an unfairly fast alternative when compared to the hassle and wait associated with phoning and scheduling with a PCP’s office. Heal received $100 million in funding from Humana in July 2021.vii i

18 to 29

30 to 49

50 to 64

65+

Source: https://www.ashworthcreative.com/blog/2019/06/ how-healthcare-providers-can-differentiate-themselves/

The Rise of the Hospitalist and Segmentation of Care

PCP relationships with their patients could be downgraded by the rise in the hospitalist, a term coined in 1996. At that time, there were less than 1,000 of these hospital-based physicians and they administered only 9% of inpatient care.ix As of 2018, there were more than 57,000 hospitalists in the USx accounting for more than 67% of hospital-based services.xi The use of hospitalists has risen as admitted patients have become more complex over time. These providers offer easier accessibility, improved efficiency, improved LOS and are generally considered better for hospital-based quality.xii However, in a quarter or more of cases, the patient’s PCP did not The Erosion of Trust in Healthcare | PAGE 7

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even know that they had been hospitalized, and the open question is whether the systems of care can have strong relationships with patients when so much care is segmented across such a broad care team.xiii At some level, the health care system today views patients as widgets to be efficiently treated with the latest tools and technologies, but that process today exists in a cultural environment of declining trust. While individually everyone is working hard to keep the trust of the patient, do the individual actions undermine the collective trust of patients in the system or in the pinnacle of the system, primary care?

Direct-to-Consumer Testing The direct-to-consumer genomic testing market has exploded in the past few years. Pew Research reported that 15% of American adults have taken a mail-in DNA test.xiv Over the past 15 years, genetic at-home tests paved the way for several similar at-home tests that claim to measure food sensitivity, fertility, and genetic risk for diseases such as Parkinson’s or diabetes. Access to compelling (albeit still medically scrutinized) self-health data empowers the patient to seek a medical response customized to their specific needs. Armed with information from tests like these, patients expect to have more involvement and control over their healthcare decisions. One professional we spoke to had asked the question “Why would I need to go to an annual wellness visit if I can access all that data from my home?”.

Continual Monitoring Another form of direct-to-consumer advertising exists within new remote monitoring tools, like the Apple Smart Watch. In 2018, a survey was conducted to ask U.S. adults if they would purchase the then-new “Apple Watch Series 4.” The watch included new FDA approved services such as an EKG app, the ability to detect atrial fibrillation, and an emergency services alert that activates if a fall occurs. Among the respondents, almost half of Baby Boomers affirmed their interest in purchasing the new watch.xv Recently, Samsung released their latest smart watch that has additional health sensors—optical heart rate, electrical heart, and bioelectrical impedance analysis—allowing users to monitor their blood pressure, detect AFib, measure blood oxygen level, and calculate their body composition in addition to all the other usual health tracking features found in other watches.xvi The OTC diagnostics and monitoring market is currently valued at $20B but will grow at double-digit rates for years to come.xvii It remains to be seen whether this instantaneous and omnipresent access to personalized health data will drive long term engagement with primary care or independence and be yet another source of dissemination from primary care.

Self-Medication As self-medicating with supplements, health diets, caffeine, illicit and non-illicit (but not prescribed) drugs become more ubiquitous, determining whether self-medicating as a practice is evidence of the provider influence erosion or part of what contributed to the erosion in the first place becomes harder to decipher. A recent poll defined self-medicating as consuming alcohol, illicit drugs, or medication without a prescription to mitigate symptoms of mental or physical illness and reported that nearly 80% of respondents who experienced health issues had self-medicated. Of those self-medicating, 43% continued self-medicating daily despite having seen a physician for their ailment, 26% of those who received a prescription from the physician reported not taking it because they did not trust the ingredients, and 50% of those respondents feared the effects of the prescription.xviii After alcohol, the most popular drug used for self-medicating is marijuana. With more than half of the US legalizing marijuana in some form, an increasing number of people have turned to weed for relief. In states where marijuana use is legal, the drug provides an easily obtainable solution for the symptoms associated with some pain and mental health syndromes. Obtaining a medication script from a local doctor for the same syndromes would require finding an available provider, enduring long office wait times, complying with mandatory follow-up examinations, covering insurance visit co-pay fees, and potentially jockeying conversations between the insurance company and medication provider to have the cost of the medication approved. The bottlenecks that stymie the process and the level of health literacy required to navigate it successfully make the traditional, in-office healthcare experience an unappealing and frankly unrealistic option for many.

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It was only nine years ago that Colorado and Washington’s move to legalize marijuana for recreational use was considered a ‘groundbreaking’ decision. Indicative of the growing acceptance of alternative treatments, since legalization of marijuana for both recreational and medical use has quickly spread across the country: there are now only 16 states in which weed is not legal in some form. In an even bolder display of changing attitudes (that would have been unfathomable 10 years ago), in January of 2021 Oregon decriminalized possession of all drugs—including heroin, cocaine, methamphetamines, and LSD—for personal use.xix

Notable Cohorts Responding to Lower Trust Environment Young people and those with lower health literacy are most at-risk of decaying trust levels in health care and following the broader societal distrust slide. Young people tend to fall into the low trust/high empowerment category while those with lower-thanaverage health literacy tend to have a low trust/low empowerment profile.

Young People: The Do-It-Yourself Generation Spectrum of Personal Trust Distribution by Age

Generalized feelings for trust in healthcare remain favorable when compared to trust for other American industries and establishments, but there is a significant difference between older and younger generation’s trust in information. Only 42% of adults aged 18-29 believe that doctors “Provide fair and accurate information” compared to 55% of those over 50. In general, young people are a low trust segment, Pew research looked at these levels of trust and

All Adults

30—49

As a whole, 22% of the population are considered “high trusters.”

50—64

11% of those aged 18-29 fall into this category.XX

MEDIUM

LOW

22%

41%

35%

Ages 18—29 11%

categorized citizens as “high trust,” “medium trust,” and “low trust.” However, while 37% of those aged 65+ are “high trusters,” a mere

HIGH

65+

42%

18%

46% 41%

25% 37%

39%

41%

31% 40%

19%

With their eroding trust in institutions, young people show more willingness and comfort with utilizing technology for answers. Google receives more than one billion health questions every single day.xxi A younger generation appears to have placed their trust in the most responsive, customized and reliable experience they know. Their lives are structured around and habituated to technology and its ability to provide access to obtain information, goods, and responses quickly. Etactics’ report, “What Different Generations Want in Healthcare,” analyzed how expectations and buyer behavior within generations would shift the model of healthcare. They reported that younger generations or Gen Z had concerns of decision making and convenience pertaining to healthcare and a primary want of digital options. This cohort makes healthcare engagement decisions based on convenience and digital offerings and information.xxii The information they access about health, health-providers, and health systems via media or online, will heavily influence their care decisions. Given their habituation to a responsive tech society, they expect their treatment preferences to be considered when healthcare decisions are being made. As discussed earlier, adults under the age of 30 are more than twice as likely not to have a primary care physician as their older counterparts, according to a new report by Vitals, a healthcare information website. The trend points to the increased use of alternative care facilities, such as retail health clinics and urgent care centers, with 41% of people aged 18-29 indicating they used urgent care centers to address health concerns.xxiii A former payor emphasized the impact of generational trust and the future of healthcare stating, “There is a generational thing around trust…some demographics trust Google more than a doctor.”

Americans with Lower Health Literacy Low health literacy is most prevalent with older adults, people with limited access to higher education, populations in lowerincome brackets, non-English speakers, and patients with chronic medical conditions (diabetes, hyperlipidemia, congestive heart failure etc.). This group is associated with high utilization of the emergency department for primary care needs, difficulty managing multiple medications or treatment providers, poor health outcomes and high healthcare costs when compared to healthcare utilizers with higher health literacy.xxiv Competencies required for health literacy include: “the ability to access health information (seeking, finding, and obtaining health information); understanding, applying, and appraising health information.” xxv

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Spectrum of Personal Trust Distribution by Education Level

This lower health literacy population expresses less willingness to trust health information from treatment providers and is more likely to trust health information being shared by television, social media, blogs/celebrities, friends, and pharmaceutical companies.

All Adults

HIGH

MEDIUM

LOW

22%

41%

35%

This group is the most vaccine-hesitant and expresses a lack of trust in institutions in general. Turning back to the “high trust” to

High School or Less 15%

“low trust” spectrum, we see that one attribute associated with

Some College

this population—those with limited access to higher education— has only 15% “high trusters,” less than half the amount compared

Bachelor’s Degree Post-graduate

to their most educated counterparts.xxvi

22% 29% 33%

40%

43%

39%

37% 46% 44%

24% 20%

How do we understand the lack of trust here? From one report, many within this group perceive health providers as uncaring and that information shared is not valued by the provider. Additionally, this population reports not understanding provider instructions and is more likely to be seen by multiple providers without opportunity for establishing a relationship that results in trust or patient empowerment.xxvii Given the disempowered stance of these care utilizers, systems are unlikely to hear complaints about poor performance with this group unless they ask for it directly. Backlash of inadequate care pathways for and lack of trust from this group is more likely to be felt fiscally due to high care costs that result from this population being mismanaged and by institutions and providers within geographic proximity to low health literacy populations.

Implications We evaluated micro and macro factors that illustrate how standard practices within healthcare and external factors devalued and eroded trust within the practitioner/patient relationship. Given the trends outlined above, we recommend providers, institutions, regulators and new healthcare entrants follow a two-pronged approach that both leverages practices that may have eroded trust in the first place (urgent care, DTC advertising, self-medicating, at home testing) and re-establishes trust in a format that is newly defined by a younger, more tech-savvy generation.

For Providers: Encourage online peer — reviews and feature positive reviews on your website

Ensure patients understand instructions by using alternate forms of instructions and making

longer appointments when needed

Adjust traditional care philosophies to allow room for patient participation in their health experiences

AT ACT TR

to improve your practice

NVERT CO

action on that feedback

RET A

Solicit feedback from patients and then take

Niche Down – Establish yourself as a specialists, expert, ally, or advocate for a particular disease, population, or type of treatment experience

Invest in digital systems that

enhance responsiveness and improve front office efficiency so potential patients receive quick responses and to not have to deal with duplicative forms and processes

Train on mission and values so all staff implement them during micro interactions with patients from start to finish

Improve communication techniques – Hone and implement active listening, validation, and collaborative problem solving

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Niche-down. Younger generations favor a customized treatment experience from providers displaying integrity to mission and stated purpose. To the extent that you can establish yourself as a specialist, expert, ally or advocate for a particular disease, population, or type of treatment experience, you should. Niching not only improves your trust and likeability factor, but it also leaves you better positioned for search engine optimization. Invest in developing your mission and train staff in expression of company values in micro interactions. These signals of purpose and integrity to the customer, in addition to quality care provision, help engender trust and cultivate loyalty. This “niching” of yourself is easier in a digital environment than a physical one, since geography is a much more limited factor in the former. However, the tendency towards self-segmentation is strong in both the online and offline world. We will write in more detail about the strong trend towards self-segmenting ourselves in society generally and health care specifically, in our next white paper, “The Big Sort Comes to Healthcare” Invest in digital systems that collect data for personalization, enhance responsiveness and improve front office efficiency. You can’t niche what you don’t know. Every interaction between a provider and patient is an opportunity for data collection that can lead to patient customization. As discussed, systems and providers that are highly responsive will be favored over those that usher callers through phone trees to unattended voice mailboxes. Offering chat features for administrative questions/to triage need and online scheduling will improve patient satisfaction. Eliminating pen, paper and duplicative forms in favor of forms that integrate with the electronic record and physician practice will be necessary to attract and maintain a patient load. The healthcare consumers of tomorrow will track responsiveness to their complaints as well as their recommendations for quality improvement. Solicit brief feedback often in 1-2 question electronic format (i.e. ‘What could we improve before your next visit?’ ‘What is your best suggestion for how we can improve that?’) and be ready to take action towards implementation of suggestions. This data will also give you a view of your team’s performance over time. Finally, harness the power of peer-reviews by soliciting them, replying when possible (avoiding any HIPAA violations), and featuring text from positive reviews on your website. Broaden care philosophy. The healthcare customer is and will continue to seek treatment and testing alternatives that are not comfortable to all providers due to a lack of rigorous evidence base. However, care providers will need to develop an openness to the care alternatives, as we will detail in a future white paper in this series (Whole Health). The customer base will only grow in their expectation to be regarded as an informed expert in their own health experience. Make time for understanding. To consider the unique needs of everyone, particularly the low health literacy population, enhanced provider communication strategies are needed. Providers who can train and hone communication skills that prioritize active listening, validation and collaborative problem solving will generate a loyal patient roster. This new strategy could extend appointment times for providers still honing these skills. If you remain in an FFS model, be aware of costs associated with populations that are likely to require extra time. Hire doctors who like patients and help give them patients they will like. Part of the value for a refined patient provider matching process will mean more providers who actually…. like their patients. Anyone who has spent time in a medical staff lounge knows very well the mixed feeling that many providers have with their patients and in light of the refusal of millions of Americans to be vaccinated, this is only increasing. As we will discuss in a later paper, providers emotional intelligence (EQ) will matter more over time, and we will need to use data to help match providers to patients based not just on clinical needs but communication fit: the better the fit, the better the trust. Adjusting to this future state will help you find the right patients for you, give you better outcomes, and help you keep those patients.

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For Systems:

Scale • Algorithmic infrastructure • Small players join forces • Home is the new influence point (expand care locations) • Integration in relationships, not just medical information

Differentiation • Shape the review marketplace • Responsiveness builds trust • Recognizable brand identity • Create a unique experience • Position with purpose

Algorithmic infrastructure. Begin to find your algorithm of influence. Today, there is significant data driven research on what providers should tell patients, but very little on how to communicate with patients in a way that generates influence. The industry will benefit from exploring use of data driven archetypes to match communication and treatment approaches with a patient profile type. Healthcare has largely borrowed from other industries on invented anecdotal profiles. This will not cut it in the world we are headed. Other industries have been doing AI testing on every word electronically communicated to consumers to determine which messages move which consumers to action and healthcare efficiency will improve from doing the same. Small players join forces to become builders not buyers. Investing in an algorithmic infrastructure is not a recommended undertaking for a solo hospital or even a smaller system, but rather will require alliances to fund and build. If how you communicate with patients is central to your value proposition, don’t just buy the tool—help create and own the tool. Otherwise, systems could repeat the mistake of EMRs and end up funneling billions to EMR vendors who drive nicer cars than their own staff. There is nothing wrong with JVs even for systems of $5, $10 or $15B of Net Patient Revenue with developers and other systems. This might require expertise to be a Google/Apple/Amazon level lift. One big benefit of doing this in a collaboration, beyond capital risk and expertise sharing, is the political messaging to providers and the community is stronger. It’s not a toy some CEO saw, but an expensive tool that lots of players collaborated on to build, test and deploy with the rigor of a new drug or medical device. This infrastructure should be validated and published in peer reviewed journals. The ask for providers to communicate in new ways might otherwise draw skepticism and resentment for yet another add to their workflow. Showcasing that these communication styles will generate enhanced patient outcomes and time-saved for providers will be necessary for systems to take on the change. Integration in relationships not just medical information. While the health care sector has made great strides in patient data being shared across care settings regardless of the organization delivering the care, less progress has been made in relationships management. While some systems are aggressively deploying CRM, it’s only within organization walls and often not even with its JV partners in care. Systems need to think about how to expand clinical data portability to a more complete picture of the patient’s life and care environment. Shape the review marketplace: Three out of four Americans say that they use online patient reviews as the first step in choosing a new providerxxviii, and 90% say they consider online reviews before deciding.xxix Based on the evidence we see, a hospital’s Yelp reviews have more credibility with patients than their CMS star ratings or other much more objective measures. If you want to build trust learn from other industries on how to shape reviews. That investment not only pays a likely market share dividend but also could offer a compliance bonus as a cultivated narrative of the health care experience is created helping itself shape patient choices.

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Responsiveness builds trust. The algorithmic approach can be relied upon to generate motivation for action within a healthcare consumer, but the human-to-human interaction is a large part of what systems must upgrade to re-establish trust. On a micro scale this requires training validation and collaboration skills within providers, most especially when discussing alternative treatment options a patient may be interested in. On a macro scale, this means creating healthcare systems that are sensitive and responsive to the patient care experience. We recommend continued investment in tele-treatment platforms that integrate with existing billing/ coding, registration, and medical records. This offers convenience and efficiency to consumers and staff and presents a cohesive online and in-vivo care experience. The seamless experience from online to in-person care reinforces trust in an establishment. Young healthcare consumers expect alignment between their experience of you on the internet and their experience of care at your institution. Systems can position themselves as highly responsive by obtaining and merging patient care feedback from multiple sources (website, app, electronic bedside rounding tools, call centers, chat communication streams) to generate a patient composite. That composite should be utilized to communicate what a patient favors and expects from their healthcare system. Currently the information and communication channel between actual bedside providers and patient experience/marketing teams is not heavily prioritized. Which is to say that patient complaints are addressed individually and manually but rarely compiled in trends to generate opportunities for improvement. Since restoration of trust in medicine and creation of a loyal customer base hinges upon a system being perceived as able and responsive, we recommend enhancement efforts here. Recognizable brand identity. Influential brand messaging and language should be utilized to enhance one-to-one patient care interactions but also to draw patients from competitors. Health systems have been organized for economic scale and clinical excellence and have thought much less about the science of engaging with communities or individuals towards creating an emotional impact. To get people to listen to the system about both clinical and economic matters (e.g., take this medicine, use this provider), a public facing message of purpose and public interfacing team will need to be created. That could mean taking on community health workers, but even more intriguing is the idea of utilizing health influencers since most consumers will go online for trusted sources of information. Regardless of what the medical establishment or their local doctor says, millions of Americans are getting their sources of COVID information online. Learning to have online influence for your patients is one of the greatest research challenges for providers today. To those hospitals and health systems who use their Medical Staff or Board as the ultimate brand focus group—stop it. The board and providers are incredibly important stakeholders but simply not representative of the vast majority of your stakeholders. Other industries use front line feedback as branding input—not judges. Creating a unique experience in healthcare. Younger generations are showing preference for brands that generate a novel experience in their industry. We recommend health systems invest more in integrating at-home testing and metabolic tracking results with an existing and patient responsive medical record so that providers and consumers can make joint care decisions even when geographically separated. Predictive analytics as a staff-monitored portion of this patient responsive medical record would allow for quick processing of home data towards a care recommendation. Adjust business models. Recognize that those referral pipelines from primary care to sub specialists that are central to health systems’ business models will be under strain in a lower trust environment. It is often said “patients go where you send them”. The data doesn’t fully back that up in today’s environment and certainly won’t tomorrow. Systems should also think twice about how they evaluate and deploy disruptors in their own market. Remember there is a price to be paid when you disrupt the provider patient relationship, but if done right it could strengthen the PCP relationship by tightly coordinating and deferring to primary care. Most of all, consider investing in disruptors which can find new, deep patient influence points that can wrap around your key providers. Home is the new influence point. Expanding and tightly integrating with assisted living, independent living, home health providers, mental health and mental health in-home providers to influence patient behavior via apps to meet shared goals (i.e. reduce hospital readmissions) has potential. Imagine having a small primary care workforce living in those kinds of communities. In addition, while before COVID it would be unimaginable for a patient to change physician providers based on who their home care aid recommends, it is very imaginable today. With less trust given to fewer people, this part of the workforce could have significant influence over patient loyalties over time. These workers earn patients’ trust with their near-constant physical presence and acts of support and caring—literal sweat equity. Are we talking about home care aids as an important part of the care teams, yes.

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Position with purpose. Commitment to improved health literacy for all and building trust with a low health literacy population will be challenging. It will require correctly identifying low health literacy risk through social determinant and health literacy screening tools at every care point of entry and providing practitioner education around non-judgmental and collaborative response at the time of a positive screen. Utilization of medical interpreters, assessing patient understanding and comfort at various points during care delivery, tailoring interventions, as well as health and diagnosis education to various learning styles (audio, visual and kinesthetic) will go a long way to generate trust from this group. Systems investing in generating evidence-based but easy to follow medical infotainment can position as a trusted source of information for the low health literacy and younger consumer populations.

For New Entrants: Every incumbent who loses trust is an opportunity for a new entrant to gain that person’s trust. Look at the demographic data to see areas where trust is likely to have fallen as a criterion to screen or prioritize markets. However, you can get bitten by the same forces that bit your competition, so have a trust plan for each market segment you wish to attract. Algorithm development for patient management is the great white whale of the coming years. Today the media and politicians are ahead of health care in knowing how to scientifically frame and communicate to get desired outcomes.

For Regulators: Psychosocial factors as a SDOH. Regulators and payors are already burdened thinking about how to incorporate existing social determinants into health risk adjustments. While very important work, it may not be the deepest we can go. It is not just physical realties that drive clinical risk. The ultimate social determinant of care outcomes might be trust and the interwoven social networks that drive trust. Those countries with more broken social trust are clearly having more problems getting their populations vaccinated. Rethink CON laws: We tend to focus CON laws on obvious economic and clinical outcomes for communities without thinking about the relationships that get formed and how to promote them. Technology will make CON laws weaker over time, but regulators need to think about them as tools for social cohesion within health care.

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Footnotes: i. ii. iii.

https://news.gallup.com/poll/1597/confidence-institutions.aspx https://pubmed.ncbi.nlm.nih.gov/30620375/ Kravitz RL, Epstein RM, Feldman MD. Influence of patients’ requests for direct-to-consumer advertised antidepressants: a randomized controlled trial. JAMA. 2005;293(16):1995–2002. iv. https://healthcareappraisers.com/urgent-care-center-industry-in-2020/ v. https://time.com/5386256/urgent-care-centers/ vi. https://khn.org/news/spurred-by-convenience-millennials-often-spurn-the-family-doctor-model/ vii. https://hitconsultant.net/2021/03/03/dispatchhealth-series-d-funding/#.YUDt5o5Kjcs viii. https://techcrunch.com/2020/07/29/humana-partners-with-heal-and-invests-100-million-in-the-companys-doctor-on-demandservice/?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAAqiV7h6-vhPbcX-ufM5IoierAWK_aasl_S2H56uWSWXcdZFvhVRav07sfk38rtCUHf2QrEBf1Zvnvp9XEyIrl6GaziKUzuxuAllppbCKTX69bLAQhyATzJiHUx9QBEnQ0 aqXYJbvKiQRZWaCVC2b9dHCIUVbYoIFnk-Ittl3tix. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5804680/ x. https://www.aamc.org/news-insights/many-hospital-patients-doctors-are-house xi. https://www.beckershospitalreview.com/hospital-physician-relationships/4-statistics-on-hospitalists.html xii. https://www.aamc.org/news-insights/many-hospital-patients-doctors-are-house xiii. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2642573/#CR9 xiv. https://www.pewresearch.org/fact-tank/2019/08/06/mail-in-dna-test-results-bring-surprises-about-family-history-for-many-users/ xv. https://www.businessinsider.com/baby-boomers-appetite-for-apple-watch-4-2018-9#:~:text=In%20an%20informal%20survey%20 of,%25)%20who%20said%20the%20same. xvi. https://news.samsung.com/global/galaxy-watch4-and-galaxy-watch4-classic-reshaping-the-smartwatch-experience xvii. https://www.chiefoutsiders.com/blog/growth-for-in-home-diagnostics xviii. https://www.niznikhealth.com/research-articles/self-medicating-in-america/ xix. https://www.google.com/search?q=is+lsd+a+methamphetamine&rlz=1C1GCEU_ enUS948US948&oq=is+lsd+a+methamphetamine&aqs=chrome..69i57.5969j0j7&sourceid=chrome&ie=UTF-8 xx. https://www.pewresearch.org/politics/2019/07/22/the-state-of-personal-trust/#people-sort-along-a-continuum-of-personal-trustdepending-on-their-views-about-trusting-others-and-the-risks-that-might-arise-from-that xxi. https://www.beckershospitalreview.com/healthcare-information-technology/google-receives-more-than-1-billion-health-questionsevery-day.html xxii. https://etactics.com/blog/generations-in-healthcare xxiii. https://www.fiercehealthcare.com/healthcare/young-adults-more-likely-to-turn-to-urgent-care-centers-instead-primary-carephysicians xxiv. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6391993/ xxv. Institute of Medicine, 2004; Baker, 2006; Manganello, 2008; Nutbeam, 2008; Sørensen et al., 2012; Squiers, Peinado, Berkman, Boudewyns, & McCormack, 2012 xxvi. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6295319/ xxvii. Predictors of health care system and physician distrust in hospitalized cardiac patients. Gupta C, Bell SP, Schildcrout JS, Fletcher S, Goggins KM, Kripalani S, Vanderbilt Inpatient Cohort Study (VICS).J Health Commun. 2014; 19 Suppl 2():44-60. xxviii. https://www.patientpop.com/blog/running-a-practice/internet-new-ways-patients-find-physicians/ xxix. https://www.softwareadvice.com/resources/how-patients-use-online-reviews/

The Erosion of Trust in Healthcare | PAGE 15

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Segmentation: The Coming Healthcare Divide

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This is the age of the “big sort” as coined by the author Bill Bishop. The American public has self-segmented in numerous ways. Our neighbors

More and more counties are uncompetitive

are more likely to be just like us than at any time in the last 100 years.

Counties where presidential candidates won the two-party popular vote by more than 20 percentage points

This is evident in everything from how we shop, to our religious preferences, what we eat, and even how we vote. For example, in 2020 Biden won 85% of counties with Whole Foods and 32% of counties with Cracker Barrel. In 2016, Trump won 74% of counties with Cracker Barrel and just 22% of those with Whole Foods.i Healthcare is one sector that has been slow to sort. Until recently, doctor’s offices, ERs and many care venues were very democratic. Insurance plans, with some exceptions, were relatively standardized. Even top Academic Medical Centers, like Johns Hopkins Hospital, have a payor mix that looks very similar to little-known community providers in their geographies.ii The reasons for this similarity range from laws, such as EMTALA which says you can’t turn away patients from an ER, to

SOURCE: FiveThirtyEight, Cook Political Report

culture – providers generally believe everyone deserves good care.

However, the big sort is coming to health care—albeit slowly. The diversity of payor products has emerged over the last decade. From high deductible plans on the commercial side to Medicare Advantage and Medicaid wraparound services (e.g., Absolute Care, PACE) on the public payor side, patients are being grouped and treated very differently. These models may not all be proven to work, but the process of individualization has begun. Currently the segments forming are not determined by the customer’s ability to pay or their desires for certain products, but by the costs that they are willing to endure. This same process is coming to the provider side, but a bit more slowly and in different forms.

Percentage of Covered Workers Enrolled in an HDHP/HRA or an HSA-Qualified HDHP, 2006-2020

HDHP/HRA HDHP/HRA

Total Medicare Advantage Enrollment, 1999-2019 (in millions)

HSA-Qualified HSA-Qualified HDHP HDHP 22.0 22.0

30% 30%

20.4 20.4 19.0 19.0 17.6 17.6 16.8 16.8 15.7 15.7

20% 20%

10% 10%

14.4 14.4 13.1 13.1 11.9 11.9 11.1 11.1 10.5 10.5 9.7 9.7 8.4 8.4 6.9 6.8 6.9 6.8 6.8 6.8 6.2 6.2 5.6 5.3 5.6 5.3 5.6 5.3 5.3 5.6

2006 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 2015 2015 2016 2016 2017 2017 2018 2018 2019 2019 2020 2020 ‘99 ‘00 ‘99 ‘01 ‘00 ‘02 ‘01 ‘03 ‘02 ‘04 ‘03 ‘05 ‘04 ‘06 ‘05 ‘07 ‘06 ‘08 ‘07 ‘09 ‘08 ‘10 ‘09 ‘11 ‘10 ‘12 ‘11 ‘13 ‘12 ‘14 ‘13 ‘15 ‘14 ‘16 ‘15 ‘17 ‘16 ‘18 ‘17 ‘19 ‘18 ‘19 18% 17% 18%15% 17%14% 15%13% 14%13% 13%13% 13%16% 13%19% 16%22% 19%23% 22%24% 23%25% 24%27% 25%28% 27%30% 28%31% 30%31% 31%33% 31%34% 33%34% 34% 34% NOTE: Covered workers enrolled in an HDHP/SO are enrolled in either an % of Medicare % of Medicare Beneficiaries Beneficiaries HDHP/HRA or HSA-Qualified HDHP. Values may not sum to toals due to rounding. NOTE: Includes cost plans as well as Medicare Advantage plans. About 64 SOURCE: https://www.healthsystemtracker.org/indicator/ million people are enrolled in medicare in 2019. access-affordability/percent-covered-workers-high-deductible-health-plans/ SOURCE: https://www.kff.org/medicare/ issue-brief/a-dozen-facts-about-medicare-advantage-in-2019/

Segmentation: The Coming Healthcare Divide | PAGE 17

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The rise of the gated health care community. One Medical and many other VIP services are exploding. For example, One Medical showed a 30% increase in membership count going from 422K to 559K in 2020. Net revenue was $122 million compared to $77 million in 2019, a 57% increase.iii As income inequality continues to increase, it is not a surprise that those who can afford it are seeking a differentiated experience that values their time and has a different level of provider-patient interaction. With One Medical, members have access to 24/7 virtual care; a mobile app that provides the ability to asynchronously communicate with their provider, renew prescriptions and schedule appointments; and access to practices near where they live and work. These concierge doctor’s services generally run $125-$200 per month.iv There are also new technologies to engage people with their health from Fitbit, Apple etc. that target not just the worried well, but specifically the wealthy worried well. Fitbit, the lower end of the health fitness tracking movement, has its strongest penetration with those holding Advanced Degrees and over 125K of income according to Numerator Insights.v These new startups are responding to market signals but not traditional medical needs. High income individuals on average have a life expectancy 10-15 years longer compared to the poorest Americans.vi The Urban Institute published a report that showed 22.8% of people earning an income of $35k reported poor health based on self-report of fair or poor health. People in the report with an income of $100k or more reported poor health at just 5.6%.vii The question becomes: when does this group’s health, income, and approach to health lead them to break away from the system overall? It is just like when this same group makes the decision to leave the public school system. One panelist put it: “This group could have an entirely different experience just buying catastrophic care insurance and entering a different membership like Amazon Prime [for their own care].” Most high-income individuals (e.g., income above 250K) could self-insure just like most businesses have some level of self-insurance. These gates, meanwhile, are not revealing one well-off subdivision versus the rest but many subdivisions of different incomes.

Segments are not just arising based on consumer wealth. Super-Users One segment that is not driven by the high wealth of the consumers but the high cost of their healthcare is sometimes referred to as “super-users”. This well-known minority of people, account for 5% of the population and 50% of healthcare costs in the United States. viii

Their healthcare costs are on average 5-15 times moreix than the average patient health care costs a year. If cost control is important,

then by definition there needs to be a different plan for those patients than everyone else. To paraphrase one of our panelists, eventually America will need to control costs of health care spending like the rest of the world with a NICE-like panel evaluating what actually works well before paying for it, at least for patients who cannot afford to buy themselves into a different tier of insurance coverage. The recent controversy over the Alzheimer drug Aduhelm is a great example of the cost implications (tens of billions) of long shot medicine.

Segmentation: The Coming Healthcare Divide | PAGE 18

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In the UK, NICE’s role is to improve outcomes for people using the National Health Service and other public health and social care services by: 1. Producing evidence-based guidance and advice 2. Developing quality standards and performance metrics for those providing and commissioning health 3. Providing a range of information services for commissioners, practitioners, and managers across health and social care.

Another avenue for the cost control segment, which is more politically palpable but with only developing evidence of cost-effective impact, is the rise of “hot spotting” social determinants of health and other wraparound service providers to create less demand for health care services and net savings. Cityblock (the Google spin off) is one of the most prominent value-based providers. They were designed for Medicaid and lower-income Medicare beneficiaries, who tend to fit the high spending segment identified earlier. Cityblock has raised $500 million—some of their initial results are positive. However, the Camden Coalition and their work on “hot spotting” looked very effective until deeper research dispelled the hype.x The ability to help the community is generally not questioned with any of these efforts, but the purely economic ROI (with studies done to the same standard as drugs and medical devices) are debated.

Women’s Care Another segment is the crossover of concierge and demographically nuanced healthcare with women’s care. For example, Tia is a women’s health startup that in 2020 only had one clinic in New York. However, like many others, the startup shifted to telehealth amidst the pandemic. Their New York office worked with just two physicians, two nurse practitioners, and two therapists. By September 2021, Tia had raised $100 million in funding.xi Their focus, like One Medical, is easy access through an app and availability to same day appointments. Tia’s member fee is $150 per year to access these same day appointments and other features they provide for women-specific care. In the future, they are looking to expand clinics and care to an all-encompassing healthcare model for women. They have said that their goal is to, “Personalize care delivery models that are built for people instead of specialties.”xii

The LGBTQ+ Community The healthcare system is also segmenting to become more inclusive of members of the LGBTQ+ community. Many people within this community fear being discriminated against and/or turned away from service due to their preferred gender or sexual orientation. One report showed that there was a 46% increase in the proportion of adults within LGBTQ+ who reported mental distress due to fear and anxiety surrounding the chance of refusal of care.xiii

Segmentation: The Coming Healthcare Divide | PAGE 19

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Investors are funding numerous digital health startups focused on queer and transgender people. Denver-based company, Plume, had $14 million in new funding.xiv Another startup, Folx health in Boston, had $25 million in new funding led by Bessemer Venture Partners.xv Venture capital funding surged for these types of startups, surpassing the 2020 funding recorder of $30 million and reached $40 million in 2021.xvi With or without the pandemic, these LGBTQ+ practices offer queer and transgender people their preferred option of digital health due to a history of discrimination and violence. As of now, these startups lack primary care but offer apps to address specific patient needs in 33 states where the actual physician is not required to be present. These startups are based on membership fees as well.

As care urgency decreases, patients will have more choice, which propogates segmentation. One macro-level factor that has both allowed for and will continue to cause segmentation in healthcare is the move away from emergent, inpatient care. In 1994, outpatient services accounted for just 28% of total hospital revenue.xvii At that time much of healthcare, especially hospital care, was lifesaving, critical care, and under those circumstances individuals could only be so picky about what hospital they went to or doctor they saw. The balance of urgency has shifted, however. Today, outpatient services comprise over 50% of total hospital revenue.xviii Further, over the past 20 years inpatient admissions have decreased from 120 to 103 per 1,000 persons (a 14% decrease) while outpatient admissions per capita grew by 26% over the same period.xix Over the next ten years this trend is forecasted to continue with a 1% decrease in the overall inpatient use rate and a 21% increase in the outpatient use rate according to Advisory Board.xx As discussed in our earlier “Erosion of Trust” paper, new remote monitoring technology that can detect health problems for patients before they are at a critical juncture will continue to drive down emergent care and push elective care, in which case individuals will have the time and luxury to choose where they go and who they see. As patient’s gain the power of choice through time, they will sort themselves by the very care decisions they choose.

Implications for health providers: Doctors early in their practice, pick your segment (i.e., Niche down). It will be hard to be an “all-comer” practice. Over time, different groups will get picked off from you because of consumer demand or paer channeling. Like an oldfashioned general store, you may be forced to pivot. If you are early in your career you may want to think about a group of patients you really connect with and figure out if they have similar demographics and care needs. Then think about how to really connect with that group: who should you work with, where do you locate your office, etc. Many providers choosing rural communities or high-need communities have been picking a lane for a long time because the community they served was relatively homogenous. However, more folks will need to choose going forward. Practices—pick your niche or collection of niches. A few stores can handle a wide range of brands catering to different audiences under one roof but most can’t. Practices, just like providers, are used to a diverse source of patients and revenue. The big sort makes this harder. Focusing is a path towards relevance in a low trust, highly segmented society with insurance schemes that may look very different depending on who you are (i.e.. self-insured One Medical patients vs. MA patients). If the cross-referral volume is hard (because people don’t just go where there doctor tells them) then the economic logic of bundling makes less sense. However, the economic logic of scale can still hold through management service organizations (MSOs) or even multiple brands in a market. Just like GM has different brands in its portfolio, so could a health practice with teams/staffing/design aligned to the targeted segment. Match infrastructure to your segment. As providers pick a lane, the matching infrastructure needs to be there. That likely means real scale for IT and modular delivery. Because winners will “nail” their niche, and that means less room for experimentation/deviation at scale. All Apple stores look the same for a reason. All stores have the same processes for a reason. Practice that re-invent the wheel on design, operations, and especially IT will get somethings wrong and lose to competitors who have data backing every choice.

Segmentation: The Coming Healthcare Divide | PAGE 20

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Knowing value and tech can help to inform the provider who from the segment they need to see, or possibly beneficial segment adjacencies.

Doctor/Practice chooses

The patient segment dictates the

CRM technology may

a patient segment

technology and infrastructure

help to ‘know’ or ‘value’

(patient will only choose

needed to cater to them

patients or who to target

back if it’s a match)

New Entrants target the segments or groups that have not been catered to yet to be successful.

Health Systems: There will be a new breed of mega wealthy systems with a different business model—like mega wealthy universities. Today, Cleveland Clinic, John Hopkins and others have outposts across the globe catering not only to the traditionally wealthy but also to the global millionaires/billionaires. This has already helped Johns Hopkins fund an institute for stroke treatment with a $50 million donation by The United Arab Emirates.xxi It is named after UAE President Sheikh Khalifa bin Zayed Al Nahyan who had been receiving care from Johns Hopkins after suffering from a stroke and requiring emergency care. Additionally, the oil rich nation has donated an undisclosed amount of money previously to support the building of a two-tower hospital building named after former UAE president, Sheikh Zayed bin Sultan Al Nahyan, which was finished in 2012.xxii Reportedly the billion dollar tower was funded half through the Sheikh and half via Michael Bloomberg.xxiii Just like colleges, who serve the global elite, don’t need tuition to operate, these hospitals will be on their way to a more endowment-centric funding model as well. What that wealth will enable is the ability to finance ventures other players cannot and a brand advantage with serving the mega wealthy. The elite’s choice of care locations are literally news items, and people logically assume that since the rich can get their care anywhere, wherever they go is the best place. Geography will be less of a barrier. These globalized health systems will be able to “reach into” communities of wealth around the world through partnerships and other alliances in ways that are just becoming visible now. Eventually this will include winning over local big donors who may become scooped up by big name nationally branded systems and take away key revenue from local providers. The growth of traditional telemedicine will just make this market expansion easier for them as will the growth of remote monitoring, other personalized medicine, and increasing use of home care (all discussed in latter papers). However, the decline in geographic barriers to entry along with self-segmentation also applies to the less famous providers of care. Other providers can still expand (especially with a good segment fit) outside their current geographic boundaries. Be ready to build a focused brand. There are generally two types of campaigns out there today—AMCs saying they are the best at what they do (locally) and community hospital types selling their access, ease, and localness. That’s fine for now, but owning a segment means owning a real brand. Among health care providers these efforts are nascent, but examples include owning a standard delivery style (e.g., Kaiser) or owning a demographic (e.g., MD Anderson’s suburban health system affiliation strategy).

Segmentation: The Coming Healthcare Divide | PAGE 21

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CRM is just the beginning of managing the patient experience. Even today some players are creating systems to align patient access with patient value. In these systems, the patients being called have a known value to the system and have slots aligned with that value ready to go (no violation of EMTALA given the lack of emergency). Given the potential legal and board issues, we would urge you to be very careful going down that path, but the logic makes sense. Today big donors have different access than you and I—and maybe these new systems will ensure high-risk readmission patients have the same gold standard of access. Provider-payor integration could slow down or speed up segmentation. Many segmentation plays are with payors as partners. This is very logical since a big part of a local provider’s strategy is to stymie competition, and these new players bring competition into markets. If a big local system and a big local payor where to integrate, that would recreate some local barriers to entry. This move would mitigate niche plays as payors gravitate towards the local providers. Supplemented with network design, this strategy could deter niche players from entering the market.

New Entrants: Someone will be the new Kayak (or Tinder) of healthcare: As one panelist said, there is a lack of companies who can organize care for people based on what they want. New entrants, even Amazon, are in effect insurgents in health care delivery. One of the keys to insurgency is understanding where there are weaknesses and focusing there. Your best ally in this fight is local providers who won’t change for a variety of reasons. Leverage that, think hard about the organization whose patients you have to pick off to win. Some examples of specific signs of exposure: health systems with high payor rates (and often the high-cost structure that goes with it), systems with poor EDs (and hence a bad or mediocre reputation in the community), or even good systems with CEOs that will retire in a year or two (less likely to rock the boat at the end). The happier they are—the less likely they will immediately react to market signals, leverage that complacency.

Segmentation: The Coming Healthcare Divide | PAGE 22

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Footnotes: i. ii. iii. iv. v. vi. vii. viii. ix. x. xi. xii. xiii. xiv. xv. xvi. xvii. xviii. xix. xx. xxi. xxii. xxiii.

https://twitter.com/redistrict/status/1336349272950890497?lang=en Maryland hospital based reporting data https://investor.onemedical.com/news-releases/news-release-details/one-medical-announces-results-fourth-quarter-and-fullyear-2020 https://www.washingtonpost.com/lifestyle/home/before-you-pay-extra-to-join-a-concierge-medical-practice-consider-thesequestions/2019/10/21/90d8206a-ef8b-11e9-b648-76bcf86eb67e_story.html Fitbit Demographics and Consumer Insights | Numerator https://newrepublic.com/article/153870/inequality-death-america-life-expectancy-gap https://www.urban.org/sites/default/files/publication/49116/2000178-How-are-Income-and-Wealth-Linked-to-Health-andLongevity.pdf https://www.theatlantic.com/health/archive/2017/06/fixing-the-5-percent/532077/ https://www.healthsystemtracker.org/brief/a-look-at-people-who-have-persistently-high-spending-on-health-care/ https://www.nejm.org/doi/full/10.1056/NEJMsa1906848 https://www.fiercehealthcare.com/tech/tia-clinches-100m-as-investors-bank-women-s-health-startups https://asktia.com/article/a-new-and-distinctly-female-model-of-care-for-the-healthcare-system https://www.hrw.org/report/2018/07/23/you-dont-want-second-best/anti-lgbt-discrimination-us-health-care https://www.outfrontmagazine.com/gender-affirming-healthcare-app-plume-receives-14-million-in-funding/ https://www.fiercehealthcare.com/tech/folx-health-snaps-up-25m-to-expand-virtual-care-for-lgbtqia-community https://rockhealth.com/insights/enabling-more-inclusive-healthcare-four-market-approaches-to-lgbtq-digital-health/ https://revcycleintelligence.com/news/inpatient-no-longer-king-as-hospital-outpatient-revenue-grows https://revcycleintelligence.com/news/inpatient-no-longer-king-as-hospital-outpatient-revenue-grows https://wolfmediausa.com/2021/07/06/thought-leaders-unprecedented-growth-in-outpatient-care-in-next-10-years/ https://dag.advisory.com/2015_E_DAG_Estimator/?var=b7602a01-33fe-4fae-9e91-772dd8de6c57 https://www.baltimoresun.com/health/bs-hs-hopkins-uae-stroke-20180130-story.html#:~:text=The%20United%20Arab%20 Emirates%20has,stroke%20patients%20across%20the%20globe. https://www.hopkinsmedicine.org/news/media/releases/major_gift_to_johns_hopkins_medicine_honors_uae_sheikh_zayed_bin_ sultan_al_nahyan https://www.baltimoresun.com/health/bs-hs-hopkins-bloomberg-20120412-story.html

Segmentation: The Coming Healthcare Divide | PAGE 23

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Whole Person Care

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Whole person care will not only change how health care is delivered, but how it is defined. Based on interviews and research, whole person care will be defined using two overlapping venns: holistic health and personalization of care. In other words, whole person care is not just about mental health, nontraditional, or overlooked health care issues but also recognition that every person is an N of 1. While voice has been given to the clinical application of an N of 1 in the form of patient-centered care and the beginning of genetic discovery, today’s healthcare model is still “episodic” with doctors’ culture and the organization’s business dominating the conversation over patients’ unique needs. The future, however, calls for the transformation of healthcare into a model that is much broader and “ubiquitous” while being deeply personal to the patient. As put by one panel member, “Health is more than diagnosis and the doctor’s office”. This clinical shift will be supported by the movement towards an N of 1 culturally as discussed in the segmentation section. For example, data taken from “Google Books” reported that the use of “I”, “me”, and “mine” had increased and the use of pronouns such as “we” and “us” decreased.i Today, most media consumption is customized (i.e., Facebook, Spotify, Netflix) and the average American spends two hours on highly customized social media each day.ii People prefer the platforms that provide personal experiences and respond to them—or at least appear to respond to them—as an individual rather than mass generated answers. An Adweek/IBM Watson Advertising report found that 44% of U.S. internet users would leave a brand that did not personalize content These preferences will have implications for healthcare providers ranging from understanding a patient by integrating their health and non-health records to personalized communication plans to reach him/her/they. The idea of the N of 1 implies that cultural shifts will prompt clinical changes which will demand a new type of provider who will deliver care for the whole person. For a health care system based on long cycles of research on physical and measurable traits and protocols for care, this will be a difficult pivot.

Rise of China and Alternative Medicine The recognition of the N of 1 will call for more customized ways to treat the whole person, including increased offerings of nontraditional health care remedies like acupuncture. In 2018, there were about 38,000 licensed acupuncturistsiii, about eight times the number of cardiac surgeons in the US.iv While the latter get more visibility the former clearly have the raw numbers. Over the past 20 years, the research of acupuncture as a medical treatment has been growing at twice the rate of the research into biomedicine.v This trend demonstrates the energy around testing new approaches. The growing insurance coverage for acupuncture, chiropractic, massage, and naturopathy demonstrate the market is demanding it. We see China’s growing global role impacting medical delivery around the world. Much like American power helped export American movies and blue jeans, it is likely that Chinese soft power will help promote eastern medicine. Eastern medicine, more specifically Traditional Chinese Medicine (TCM), dates back almost 3,000 years making it the oldest system of medicine in the world. Practitioners of TCM use a variety of herbal medicines, acupuncture, and physical exercise (Yoga, Tai Chi, Qigong) to focus on energy flow throughout the body. As of 2020, there were approximately 4,000 hospitals

Distribution of Utilization of Traditional Medicine

and 40,000 clinics in China that treat patients using TCM. In an effort to increase participation in TCM, the Chinese government implemented a new law in July of 2020 that gives TCM practitioners an opportunity to qualify as licensed physicians. China’s government is promoting this spread of TCM since it is believed to have economic benefits due to the significantly lower cost than Western medicine. Nearby Australia has over 5,000 medical clinics that practice TCM and hold a very progressive approach in implementing it into their medical education as well. Currently, 183 countries and regions in the world practice Traditional Chinese Medicine.vi Some of these countries and regions have established laws around TCM and others Whole Person Care | PAGE 25

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Growth of DOs in the US, 1990—2019

have incorporated some of TCM’s practices, namely acupuncture, as part of the medical insurance system. In the United States, Johns Hopkins Hospital (Baltimore, MD) has created a department to specifically focus on alternative medicine including TCM. The growing cultural acceptance of traditional medicine and the broader view of treating the whole person will shift the relative balance of influence within the medical community as well. As of 2016, the U.S. had almost 130,000 medical students of Osteopathic Medicine and the number of DO’s was almost 65% more than a decade before.vii Additionally, one in four medical students are choosing to attend osteopathic medical school, which is representative of the growing influence of holistic medicine in the United States. With younger generations being the driving force in the cultural influence of Eastern medicine within the healthcare system, it is significant that almost 70% of the DOs practicing in the United States are younger than 45.viii This signals that going forward, the influence of Eastern medicine will only continue to grow, led by this next generation of practitioners.

Personalized Care (Genetics)/ Precision Medicine For all practical purposes, we are an N of 1 genetically. Right now, the big

Applying Cross Percentages to the Population

research findings for genetics apply to small percentages of the population: APOE4 already Alzheimer risk—2%, BRACA—0.25 %, ALS gene A—0.00002%. This is true of phenotype combinations as well as genetic ones. One study calculated there were 270 million unique combinations of symptoms that meet DSM-5 criteria for PTSD and major depressive disorder.ix As we learn more about genetics and gain new phenotype data, even narrower slices of findings will emerge, and once cross percentages are applied to population sets, e.g., the 2% of the .1% of the .05%, you can get very close to an N of 1 for any patient you ever treat. The body of knowledge around genomics and precision medicine more broadly will grow rapidly as both their markets are expected to explode. Currently, the global genomics market size is valued at $20 billion USD and is expected to increase at a compound annual growth rate (CAGR) of 15% from 2021 to 2028.x Market Research Future reported that the Precision Medicine Market in the United States is going to be valued at $126 billion USD by 2025 with a CAGR of 13%.xi The US government has helped facilitate this growth. In 2015, President Obama launched The Precision Medicine Initiative (PMI) to accelerate understanding of people’s individual variability and the effect that it has on disease onset, progression, treatment, and prevention. The amount proposed was $215 million with $130 million going to PMI research. The idea is to promote both long-term and short-term goals with study and research on individual’s genetic makeup, environment, and lifestyle.xii For example, this type of research could lead to a more personal understanding of what approach is best to prevent a disease or what medication responds best to a person’s genetic makeup. In 2018, $28.6 million from All of Us Research program—a historic effort by the NIH to study millions of people to advance precision medicine—funded three genome centers around the country.xiii Where the US invests millions, China often invests billions. Synthetic biology or personalized medicine was one of China’s 2025 targeted industries (though it got less press than its push into AI or EVs). Part of China’s 2025 initiatives included making biotechnology 4% of their GDP (about 15 trillion dollars) by 2020.xiv Part of this biotechnology was launched through $20.9 billion dollars into military technology. Foreign investors have shown increased interest in Chinese biotechnology which has led to $8 billion dollars in funding in 2020xv and, like other forms of FDI in China, is expected to strongly increase in the coming years.

Whole Person Care | PAGE 26

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Explosion of Behavioral Health While genetics reveals more about each of us physically, COVID has revealed and exacerbated the prevalence of behavioral health issues in the United States. Even before the pandemic, it was estimated that 20% of the entire U.S. population suffered from a mental health or substance use condition.xvi In the initial months of the pandemic the number of individuals reporting negative mental health status jumped from 32% to 53%.xvii Since the mental impacts of traumatic events last far longer than physical impacts, the U.S. could see anywhere from 66 to 108 million Americans suffering from a behavioral health issue for years to come. By 2040, the U.S. population will reach 380 million. Without any change, this would mean that 76 million individuals could suffer from a behavioral health condition. Since today only 40% (26 million) of people receive treatment for their conditionxviii, the United States would have to triple the amount of mental health services provided to treat every person. The demand for these services has been growing for some time due to population growth, cultural shifts, and increasing coverage by insurance companies (especially after the U.S. Mental Health Parity and Addiction Equity Act went into full effect in 2014). However, the effects of the COVID-19 pandemic may catapult this growth to levels previously unseen. While demand rises, supply has not been able to keep pace. 22% of all adults with a mental illness reported that they were not able to receive the treatment they needed—a number that has not declined since 2011.xix All categories of mental health providers, from social workers to psychiatrists are expected to have shortages by 2025 according to SAMHSA.xx Digital health solutions are beginning to address some of the issues and

Mental Health Workforce Availability

disparities in mental health delivery. For example, the rapid adoption of tele-mental health has helped to ameliorate the mental health professional shortage discrepancy between regions. However, since incentives aren’t aligned to increase the supply of mental health providers (i.e., psychiatry is the lowest paid of any medical specialty), behavioral health models of the future will need to incorporate ever more innovative methods, like taking advantage of AI and other technologies. One of our panelists highlighted the option of making the first four sessions of one’s therapy journey automated. After these sessions, therapy becomes a form of self-care, so if we can streamline the process into quick diagnosis/discussion/help then more and more people can utilize these technologies for their mental health needs. There is evidence to support that both patients and practitioners are already open to these models. A recent survey from Workplace Intelligence and Oracle reported that 82% of all those who were surveyed picked an AI robot over humans to talk to about their mental health since these robots had 24-7 accessibility and no perceived ability to judge the individual (as compared to mental health professionals). For multiple years now, robots have been used in psychology and psychiatry to treat a wide range of mental health states, such as socially assistive robots who help children with autism spectrum disorder,xxi robots powered by AI that provide companionship for the elderly, and voice-activated robots that provide cognitive behavioral therapy and relay data to medical professionals.xxii These technologies and others are already being used to help with the mental health epidemic left in the wake of the COVID-19 pandemic. In the future, the strongest behavioral health practices will leverage these innovative models of clinical automation to serve more patients and create better economics.

Where’s the baseline data for behavioral or whole health? As of today, the phrase “garbage in... garbage out” applies to some big data analysis because we haven’t started with the right inputs to paraphrase one panelist. One thought leader in the health-tech space suggested we will need a whole new starting point on health data in many areas. In particular, mental health has few areas of baseline data to compare patients’ current behaviors with (i.e., is the patient fidgeting more? Sleeping less? Less socially engaged?). This data is not hard to capture and is sometimes already available on other platforms (e.g. FITBIT, Facebook, phone, etc.). However, it is almost completely absent in today’s billing focused medical records. Moreover, as one panelist noted, “All chronic disease management is mental health management,” you can see how interconnected and robust the data set will need to be over time to treat the whole person.

Whole Person Care | PAGE 27

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In the future, the EMR will need to have additional information related to a person’s social determinants of health to make risk predictions more accurately. This may mean incorporating personal financial data (like Mission Health Partners and Lumeris are already doing) or patient information like transportation or housing status.xxiii The medical record will also need to expand to include not just physical health baselines, but mental health baselines. Some options to include may be depression screens (PHQ-9), anxiety screens (GAD-7), adverse childhood experiences baseline (ACE), a trauma screen, and loneliness or social isolation scores.xxiv These last two ailments have long been known to be highly correlated with negative health impacts but have traditionally been associated with the elderly. However, the digital age has caused feelings of isolation and loneliness to impact all age-groups with surprising frequency—60% of college students say that they have felt lonely in the past yearxxv—making this a relevant item to track across the age spectrum. By including multiple levels of mental health baselines, the EMR may also help surface mental health intersectionality, allowing providers to better see the layers of issues that their patient may be facing. Finally, information on how a patient interacts with the medical system should be included to help inform treatment plans. For example, including a measure of a patient’s health literacy can cue a provider to how they need to present treatment plans (i.e., written instructions, pictographs, follow up from front-office staff, etc.). Likewise, medication compliance can be tracked using claims data that feeds into the EMRxxvi which may then indicate to a provider treating a patient with high cholesterol that a biannual intramuscular injection, like inclisiran, may be a more effective treatment than a daily oral medication.xxvii There will be tough privacy issues associated with aggregating and integrating all this information, but both patients and payors will want to use the data to improve outcomes.

Physician Education – AI and EQ As one health care leader interviewed pointed out, “The medical education system is broken.” The WHO reported that nonadherence in the physician patient relationship is a cause for 50% of treatment failures, 125,000 deaths, and up to 25% of hospitalizations per year in the U.S. The panelist noted even provider language around patients is disheartening and destructive “noncompliance, “orders”. Nothing cries out more for evolution than provider—patient communication given this immense problem. Recently there has been a large push to change the curriculum of medical education to increase the effectiveness of the workplace and keep up with the changing healthcare world. As a result, medical schools are beginning to look different than before. The Zucker School of Medicine at Hofstra (now Northwell) was established in 2008 and led several initiatives for changing the medical education system, establishing their new curriculum as “emphasizing early clinical experiences, self-directed learning, and a case-based curriculum” in order to increase effectiveness. Additionally, their curriculum emphasizes a team-based approach, focuses on training in patient care, and the ability to problem-solve.xxviii In 2011, The American Medical Association donated $1 million to 11 different schools to modernize their programs with the larger health system in mind. In 2018, Wake Forest University made public their own curriculum changes. Students will go through 18 months of basic sciences and clinical studies before the normal clinical curriculum. Additionally, they are integrating more methods to develop professionalism, problem solving, and active learning skills.xxix With Wake Forest’s integration with Atrium health, more evolutionary changes are anticipated. However, these changes are slow compared to the dramatic nature of the problem. Another panelist expressed great hope that the AI revolution will speed up the evolution of who goes to medical school, how they are trained and how they progress in their career. The panelist noted that MCAT’s are all about memorization and that AI can drive a lot of rules-based analysis for providers in the future, so their “role as communicators” will be much greater. As a result, the selection focus should shift from predominantly analytics in the cognitive specialties to “Emotional Intelligence”. Several studies have documented the correlation

Average Physician’s Score on EQ-I 2.0 Scale

between physician emotional intelligence and patient’s

(according to Assessment of Emotional Intelligence in Pediatric and

clinical outcomes. For example, one study conducted at

Med-Peds Residents)

Jefferson Medical College found that of 29 physicians

Average Physician

treating patients with diabetes, those with the highest empathy scores also had the best patient outcomes, as measured by levels of hemoglobin in the blood. xxx

Despite this well-researched concept, physicians in

general barely score higher than the average person on emotional intelligencexxxi, and their emotional intelligence is jeopardized throughout their education and career. The demands of medical training—from Whole Person Care | PAGE 28

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long hours and high-performance expectations to limited social support networks—have been shown to erode the trainee’s emotional intelligencexxxii. In one study, empathy scores dropped by around 5 points during medical training alone.xxxiii The decrements in medical students’ emotional intelligence may be partially attributable to burnout, which is experienced by 4571% of medical students.xxxiv Unfortunately, this trend continues into the physician’s career, where the overall rate of burnout is 42% among all medical specialties.xxxv With one of the three key components of burnout being depersonalization, or the “replacement of empathy with cynicism, negativity, and feeling emotionally numb”xxxvi, EQ continues to drop (ironically, lower EQ scores also make physicians more susceptible to burnout). While aspiring physicians may start with decent emotional intelligence, the demands of the profession—both in training and in practice—drop these scores. Fortunately, unlike IQ, emotional intelligence can be taught. Selecting for individuals that already have a heightened emotional intelligence as well as incorporating EQ skills into the medical education curriculum can protect doctors’ health and job satisfaction as well as increase patient outcomes.

Implications for Providers: Given many patients will see their health through the lens of nontraditional treatments and their mental health (among other aspects) providers with greater clinical breath and EQ will win in the marketplace while some providers who may have strong reputations for other reasons will be shocked at how the hierarchy of health care is changing. It also means that almost all practices today are not staffed to meet patient needs. Practices will need to grow either directly or through some other alignment to meet patient’s needs. Those needs could be driven by capitation/cost concerns or patient’s own redefinition of good care, either way there is no escaping the massive redefinition of health. The graphic below illustrates how this new team may deliver care. Important to note while patient A (depression) my only present once a week in clinic, Patient B (anxiety) may present every day. PCP kept up to date through EMR and can help take over care management once condition is stabilized.

PCP kept up to date through EMR and can monitor for improvement or need for referall to higher level of care.

PCP equipped with behavioral health expertise

Enters information into EMR

Diagnosed and treated by PCP on the spot

Two patients present with BH issues

Referred to psychiatrist for diagnosis and treatment

PATIENT A: Bipolar I in Depressive State

App interconnected with EMR for updating progress

PATIENT B: Mild Anxiety Prescribed regular sessions on appbased therapy

Implications for Health Systems: BH as MVP (Most Valuable Player). Over the long term, many patients in the community will have a relationship with a behavioral health (BH) tool/team before they ever develop a relationship with a PCP, and the relationship with the BH tool/team may be much stronger than with a PCP. Therefore, over the long run tens of millions of Americas most important health care relationship (from their perspective) will be with a BH provider. Almost no health system in the country is prepared for this reset of relationships with their patients. It is not just processes, staffing and business models are not ready for this work, even the culture of health system is not. As of today, very few board members, CEOs, CMOs have any sort of background in mental health—that must change. All those parties need to get smarter on BH to even think through the process, business model and staffing issues.

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Staffing: Everyone is part of BH. Beyond establishing more psychiatry residency programs (which we believe will become more popular for a variety of reasons from compensation to status)—providing incentivized BH educational opportunities for clinical staff outside of psychiatry is a model of interest. By leveraging the skills of talent already within the health system, you decompress BH volume demand and create a more balanced physician. With scarcity in BH resources, primary care and subspecialty physicians will have an even larger role in managing BH disease towards favorable medical outcomes for their patients. Organizations like The Reach Institute are recommended to provide intensive training to non-BH physicians to increase their comfort diagnosing and treating psychiatric conditions. In the ideal scenario, medical school curriculum and residency training would provide enhanced mental health education to primary care and specialties with significant mental health overlap in their patient populations.xxxvii In the future, not only will this behavioral health skill set be clinically necessary, but it will also be highly marketable for physicians who have an interest in niching and branding their services as focused on “whole health.” Systems will also need to think about BH in all parts of care delivery from hospital room design and facility layout to capturing BH needs at all points of the physical care continuum (urgent care to local SNFs). Process: better triage and acuity sorting. Equipping non-behavioral health physicians and other clinical staff with behavioral health expertise relieves some of the demand on the scarcest resource (psychiatry). With this expanded treatment capacity, how will the system determine who receives psychiatry versus services with another provider? Since mental health disease, much like medical disease, occurs across an acuity spectrum, we recommend use of triage tools at point of entry. Much like an Emergency Department triage model, an effective triage will sort the “right” patients to the “right” type of provider. Lower acuity patients could be sorted to psych-equipped PCPs, therapy interventions with a psychology team or an ancillary staff guided psycho-education CBT program. Measures of symptomatology and quality of life impairment would be collected at baseline and midpoint to determine if the patient is seeing benefit or if a higher level of intervention is needed. The most successful programs in this endeavor will not only expand tele capacity during program creation, they will show a doggedness about aligning new tele-systems with existing EMR, scheduling and billing systems so that patient information and progress flow without redundancy snags for patients or providers. Precision medicine will be just medicine. Depending on your market, the migration of precision making as a nice to have marketing feature to a core part of care delivery will occur. The most upscale, health literate markets will push for this first as they read more every day about scientific advancements and topics like microbiome become common knowledge. Thus, community hospitals will not be able to cede to AMCs precision medicine and those costs, without also ceding significant amounts of elective market share. Even alliances with Academics might suggest to patients ‘for real medicine go to the mother ship.’ This will take scale for community hospitals to invest in genomics labs etc., but we strongly suggest avoiding complete outsourcing where possible. It’s important that patients feel like the hard work is done within your health system even if a white label partner is doing the work inside your hospital. For one recent Array client we recommended redoing the lobby of their main campus and putting the genetics lab there—with big windows. Let every patient literally sees the future of medicine at work. Like BH this again will represent a cultural hierarchy shift where the lab experts have more visibility and influence than the past. In other words, don’t hide the science show the science.

Implications for Payors: Align offerings with the consumer’s evolving definition of health. Historically, payors have assumed a narrow definition of healthcare to determine what medical services will be covered. Medicare Advantage offerings are slowly evolving to offer non-medical benefits that address social determinants of health (I.e., air conditioners for asthmatics, transportation for those without, and home-meals for the immunocompromised). Going forward, assuming a more holistic view of health and offering insurance products that have behavioral health, alternative medicine, and/or non-medical SDH benefits may be a way to gain commercial members.

Implications for All Stakeholders: Time to reimagine data collection. For new entrants there may be plenty of market room for whatever successor to the EMR there is. Interoperability won’t just be about traditional health care data. Today, phones, watches, social media are all full of data that could be foundational to 21st century medicine like vital signs were foundational to 20th century medicine. If you are a provider and get that data in a trusted fashion, “you are in”, if not you are feeling in the dark.

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Footnotes: i. ii. iii. iv. v. vi. vii. viii. ix. x. xi. xii.

xiii. xiv. xv. xvi. xvii. xviii. xix. xx. xxi. xxii. xxiii. xxiv. xxv. xxvi. xxvii. xxviii. xxix. xxx. xxxi. xxxii. xxxiii. xxxiv. xxxv. xxxvi. xxxvii.

https://www.apa.org/research/action/speaking-of-psychology/unlocking-millennials https://famemass.com/time-spent-on-social-media/ https://pubmed.ncbi.nlm.nih.gov/30477857/ https://www.annalsthoracicsurgery.org/article/S0003-4975(18)31477-2/pdf https://www.evidencebasedacupuncture.org/acupuncture-scientific-evidence/ https://daxueconsulting.com/healthcare-market-china/ https://www.aacom.org/news-and-events/press-releases-and-statements/ press-release-archives-detail/2017/01/19/2016-omp-report-profession-reaches-all-time-high https://osteopathic.org/about/aoa-statistics/ Reading our Minds, the rise of Big Psychiatry, Daniel Baron https://www.grandviewresearch.com/industry-analysis/genomics-market https://www.marketresearchfuture.com/reports/precision-medicine-market-925 https://obamawhitehouse.archives.gov/the-press-office/2015/01/30/fact-sheet-president-obama-s-precisionmedicine-initiative#:~:text=Launched%20with%20a%20%24215%20million,treatments%20will%20work%20 best%20for https://allofus.nih.gov/news-events-and-media/announcements/nih-funded-genome-centers-accelerate-precision-medicinediscoveries http://english.cas.cn/newsroom/archive/china_archive/cn2017/201705/t20170503_176612.shtml https://www.nature.com/articles/s41587-021-00973-w?utm_source=other&utm_medium=other&utm_content=null&utm_ campaign=JRCN_1_DD01_CN_NatureRJ_article_paid_XMOL https://www.insynchcs.com/blog/rising-shortage-mental-health-providers https://www.kff.org/coronavirus-covid-19/issue-brief/the-implications-of-covid-19-for-mental-health-and-substance-use/ https://www.insynchcs.com/blog/rising-shortage-mental-health-providers https://mhanational.org/issues/2020/mental-health-america-access-care-data#two https://www.goodtherapy.org/for-professionals/personal-development/become-a-therapist/ is-there-shortage-of-mental-health-professionals-in-america https://www.apa.org/monitor/2015/06/robo-therapy https://www.psychiatryadvisor.com/home/practice-management/the-robot-will-see-you-now-the-increasing-role-of-robotics-inpsychiatric-care/ https://www.healthleadersmedia.com/innovation/using-personal-financial-data-improve-healthcare?page=0%2C2 https://www.nationalacademies.org/news/2020/02/health-care-system-underused-in-addressing-social-isolation-lonelinessamong-seniors-says-new-report Left to their Own Devices, Julie Albright. 2019. https://ehrintelligence.com/news/medication-data-in-ehr-provides-basis-for-tracking-adherence https://www.everydayhealth.com/high-cholesterol/twice-yearly-injections-halve-bad-cholesterol-in-patients-with-clogged-arteriesstudy-shows/ https://medicine.hofstra.edu/education/md/ https://school.wakehealth.edu/Education-and-Training/MD-Program/Curriculum-Overview https://www.6seconds.org/2019/05/28/case-study-eq-declines-during-medical-school/ https://www.mdlinx.com/article/emotional-intelligence-can-help-make-better-doctors/lfc-772 https://www.6seconds.org/2019/05/28/case-study-eq-declines-during-medical-school/ https://www.mdlinx.com/article/emotional-intelligence-can-help-make-better-doctors/lfc-772 https://www.medicalnewstoday.com/articles/318037#Is-physician-burnout-an-epidemic? https://www.medicalnewstoday.com/articles/318037#Is-physician-burnout-an-epidemic? https://www.medicalnewstoday.com/articles/318037 https://www.thereachinstitute.org/services/for-primary-care-practitioners/adult-behavioral-health-in-primary-care

Whole Person Care | PAGE 31

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Healthcare Spending Will Reshape the Workforce – Here’s How

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Healthcare Spending Will Keep Increasing–Just Not Where You Think While health care spending will continue to increase over 5% annually between 2019 and 2028i, there will be a major shift in how those dollars are spent in terms of care setting and workforce deployed. Technology and demographics are two separate but overlapping factors that will shift the model of the healthcare labor force and alter who receives healthcare dollars over the next 10 to 20 years. Approaching on the horizon is a mountain of an older population and a valley of young family members to administer informal care, the automation of management and information processing, and evolving health care channels.

Overcoming the Growing Number of Older Adults and Shrinking Number of Younger Caregivers Booming Care Needs vs. Declining Unpaid Caregivers Seniors need to (for economic reasons) and want to stay in

Percent of Population by Age Range from 2014 to 2060

their home as they age. In an AARP study done with adults aged 65 and older, 77% responded that they preferred to stay in their

home and community as they get older.iii Of those seniors who require care, 65% rely exclusively on informal care from friends and family, and another 30% supplement family care with paid aides.iv This informal care is the work of more than 43 million unpaid caregivers, which today totals more than $470 billion in the United States.v Meanwhile, the average number of available caregivers per family is quickly dropping in half; in 2010, there were seven, but by 2030, that number will drop to four.vi These

60 40 20 0

factors help drive the Congressional Budget Office (CBO) projections that total long-term care cost will increase at a rate

2014

2020 Under 18

2030

2040 19-64

2050

2060

65 or older

of 2.6% per year above inflation over the next thirty years.vii President Biden has proposed an infrastructure plan that, in part, aims to address the backlog of individuals seeking homecare over care in an institutional or hospital setting. However, only around 28% of those on waiting lists for homecare are among the elderly population while 72% are those with developmental/intellectual disabilities.viii This is why one panelist noted that Biden’s proposed home care investment was very likely to be “a drop in the bucket” compared to what is needed for this enormous demographic and clinical shift. What would an expanded homecare work force need to look like to satisfy the demand? While visiting nurses and Teladoc visit needs will increase, most senior care consists of basic activities of daily living like baths, cleaning, and eating. Thus, most of the new jobs will not require high levels of education but will require high levels of physical and emotional stamina. While the US will need to hire 2.3 million healthcare workers to fill the needs of the aging population, the largest number of new job openings will come in the form of 432,000 home health aides.ix

Leveraging New Housing Options to Close the Gap While seniors would like to age in place, it is important that they age in the right place. While additional home care workers can be added to the workforce, there is still likely to be a gap. New models of group homes may be able to alleviate some of the gaps. For example, among younger generations, there has been a rise of ‘dorm style’ living in expensive, urban settings.x These types of housing situations provide private bedrooms with shared common spaces in a trendy, modern, apartment-style setting. Seniors living in an environment like this would be able to readily combat loneliness (which can significantly worsen health) while still keeping their independence. These innovative living situations could have the added benefit of centralizing patients who are likely to need homecare, which could reduce travel time and create care efficiencies.

Healthcare Spending Will Reshape the Workforce – Here’s How | PAGE 33

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The Growth of Chronic Disease While Americans will get older, there is also a

Predicted Shortage of Physicians and Specialists in the U.S. by 2032*

growing consensus they will get sicker. Absent COVID, chronic diseases represent seven out of the top ten causes of death, and most Americans live with a least one chronic disease (i.e., heart disease, stroke, cancer, or diabetes). Another half of those with a chronic condition have two or more.xi A lot of patients struggling with chronic conditions are often fighting off mental illnesses such as depression or anxiety and sleep problems. By 2030, the Partnership to Fight Chronic Disease estimates that 83 million people in the United States will have three or more chronic conditions. Four years ago, this number was approximately 52 million.xii This is part of the reason why patients are getting orthopedic implants at an increasingly younger age. While the population is aging, the average age of getting an initial implant is declining. In 2000, the average age for hip replacements was 66.3, while in 2015 this had dropped to 64.9. For knee replacements, in 2000 the average age was 68; in 2015, the average age for a knee replacement was 65.9. Also, there is a larger group of very young patients getting implants and within five years, 15% have already undergone revision.xiii While many jobs of the future can be done by AI, one of the professions that is not automatable is that of a physician. While physician shortages is the perennial cry of the AMA, as the population ages and gets sicker, this cry of shortages will likely be true in many fields. One AAMC study predicts that by 2033, the United States could face a shortage of up to 139,000 physicians.xiv The evolution of healthcare will mean a heightened ability to meet the increased demand for homecare including basic ADLs, preventative care, and low acuity care. However, as these cases are automated or move out of the hospital, worsening healthcare habits among Americans across the age spectrum along with the growth of chronic diseases among the aged may lead to a backfilling of significant amounts of acute care needs without the proper workforce to address them.

The Automation of Healthcare Jobs: Further Bifurcation of the Healthcare Workforce While demographics and new care models will create new demand for lower skilled workers at home, new technology in hospitals will reduce demand for moderately skilled workers in hospitals. One report predicted the automation potential for nurses at 29%, medical assistants at 54% and home health aides at 8%.xv Brookings Institute did a study on jobs that will be most affected by AI, and the safe jobs may no longer be safe. They reported the most high-risk employees within the healthcare system are white collar workers: higher paid professionals with bachelor’s degrees. These individuals are five times more exposed to AI than workers with just a high school degree. In the healthcare system, those who are “middlemen” in the industry will either need to get

“It is amazing that people who think we cannot afford to pay for

higher degrees of education or perform lower skilled jobs to

doctors, hospitals, and medication, somehow think that we can

combat the decreased need for their services.xvi

afford to pay for doctors, hospitals, medication, and a government bureaucracy to administer it.”

- Thomas Sowell

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Since the 1990s, there has been an explosion of these middlemen adding to administrative FTEs in health care and completing the litany of tasks now required for the delivery of healthcare and its payment. Insider Intelligence reported that today 30% of healthcare costs are associated with administrative tasks and it has been estimated that the $372 billion spent on administration could be lowered by $16.3 billion through workflow automation.xvii With such high savings potential arising from these middlemen jobs, it is only a matter of time until automation is used to help offset some of the administrative growth that has occurred over the past few decades. Automation is not easily adapted in large organizations with diverse and powerful groups of stakeholders (e.g., health systems), but it is not something that can be ignored as various “disrupters pick off the high margin business,” as one health system executive noted. It also facilitates the move toward value by eliminating time-consuming tasks and allow physicians and nurses to focus on patient communication and even behavior change as discussed in our “Whole Health” section. There is significant capital chasing this opportunity. For example, digital health automation startup Olive had raised $832 million in financing by March 2020, totaling $902 million since its start.xviii While the company started in 2012, it officially released Olive in 2017 with the goal to take over tasks in the healthcare system that were repetitive and high-volume. Billionaire entrepreneur Patrick Soon Shiong has jumped into the fray as well with Nanthealth, which is now a public company with over $200 million in market cap.xix Those companies, among others, cater to shifting jobs away from administrative roles that other industries eliminated decades ago.

Surging Behavioral Health Demand = More Spending on Behavioral Health In a 2019 survey by Cigna, more than 60% of Americans are lonely as individuals, increasingly reporting feeling like they are left out, poorly understood, and lacking companionship.xx The report found a nearly 13% rise in loneliness since 2018, when the survey was first conducted.xxi One can only imagine the increase in loneliness post COVID, and we believe it may have played a role in some of the emotional reaction to COVID safety measures. People may not be in a healthy, happy place to process the public health information and direction given to them. This increase in loneliness will exacerbate what is already predicted to be a drastic rise in demand for behavioral health as a result of population growth, cultural shifts, increasing insurance coverage, and the other psychological impacts of the pandemic as detailed in our Whole Person paper. According to SAMHSA, behavioral health spending accounts for only 2.3% of insurance claims costs and only 5.5% of all health care spending in the country. Our view is that we are not looking at incremental increases in behavioral health costs, but an exponential one as millions of Americans get the care they really need.

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Implications for Providers: The paperwork you hate will be defeated…. in time. For many of you, the reason you went to medical school is arriving: more time with patients, less time coding. If you connect with patients, you will likely start getting the love from above you always deserved. In time, your clinical decision support will be integrated with financial and insurance information. No more recommending paths that insurance will not cover or with surprising co-pays that are not manageable. You may not always be happy with your options, but they will be transparent. For many of you at AMCs: you will say goodbye to protected R and A time. Teaching will still have a huge role in healthcare, and new levels in the hospital will get more “T” time. For all the talent pipeline issues discussed earlier, however, the “A” time will be partly replaced by technology investment that actually works, and the “R” time will be a cross subsidy that will be simply unaffordable to most systems. “R” time can be financed by philanthropy, but the commercial marketplace will redistribute those funds over time as patients choose to spend those dollars where they personally get more benefit. Research still helps systems’ brands, but brand will be one factor out of many, and will be the driving issue for a minority of consumers.

Implications for Health Systems: Outsource administration now so you can cut it later. Over time, continue to use more contracts or outside vendors for administrative middle management positions. As contractors, it will be easier to eliminate those positions in the coming years due to technology change. The provider of the future uses a portal, not the phone. Realize the value of providers who are likely to be more comfortable in a self-service, tech driven environment. Those doctors who require a gaggle of administrators to manage their emotions and complete various tasks will be an expensive outlier in the new world. As we discovered coming out of COVID, don’t take the less skilled for granted. Build a recruitment pipeline for lower-skilled positions with vocational programs, high schools, immigrants… etc. Northwell, Life Bridge and a number of health systems have made real progress in this area, but their pipeline isn’t particularly deep or evenly distributed across the entire continuum of care. HR and the overall talent pipeline need to be on the agenda for every board meeting, and just like there is a finance subcommittee, the subcommittee isn’t executive comp, it’s about talent recruitment and retention. Manager of tomorrow doesn’t look like the manager of today. Due to demographic trends, healthcare, particularly non-acute care, will need foreign labor just like agriculture and construction do today. Place a premium on managers today who are multi-lingual and comfortable in diverse settings. Healthcare today revolves more around managing up than other industries; but go to a construction site, and it’s more about managing down than up. Recognize revenue (if not profits) are going to shift care settings. Get your board and leadership more knowledgeable about life outside the hospital and comfortable with the non-sexy grunt work on keeping old people safe at home. When one looks at the board of the top 20 health systems in America, there are more former neurologists and cardiologists than doctors and leaders with postacute experience and not one had a behavioral health background. Don’t get trapped into a high overhead structure. Physician deals with high nonclinical time/labs, funding local community initiatives etc., will age well under great long-term pressure. Health systems, both AMC and community health systems, are de-facto fund flows of cross subsidies, making significant premiums on some efforts while losing a lot (intentionally or not) on others. The cross-subsidy model may break in many places as new disrupters are picking off services, demographics change, new technology is introduced, and business models adjust to new realities. Be open to a new way to evaluate providers. It’s not farfetched to assume that at some point we could use machine learning to evaluate provider teams like NY State evaluates teachers. That evaluation could use value-add projections based on the projected outcomes of a typical patient with specific demographic and clinical presentation. As said in the New York State Education Department 2017/18 Growth Model for Educator Evaluation Technical Report, “For all growth measures used in New York State for educator evaluation, student’s academic history and other defined characteristics are controlled for to compare similar students in the state – that is, in computing student-level growth, New York’s growth models always assess a student’s progress relative to similar students. The rules of the Board of Regents provide that three specific types of characteristics (ELL status, students with disabilities status, and poverty status) be included in the growth models that produce scores used for educator evaluation.” Healthcare Spending Will Reshape the Workforce – Here’s How | PAGE 36

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Maintain strategic flexibility on volumes. While care will leave acute care settings for the home, COVID has reminded everyone of the ability of millions to ignore basic health advice. In fact, some are concerned that the backlash against health advice will spread from COVID across to other health care issues. There is at least a sad chance that poor personal choices help backfill hospital volumes almost as fast as payor and providers find ways to care for patients safely in their own homes.

Implications for Medical Schools: Get on the E.Q. bandwagon now. This will advance the long-term success of your graduates. Think more about ability to move demographic cohorts (like we produce docs that are great with seniors, or even the global 1%) than just about clinical specialty.

Implications for Policy Makers: Au-Pairs for Seniors: We need a J-1/H-2 like program for senior care. Either we need to export our elderly to another country, or we import immigrants to live and work short-term with seniors in need. Perhaps it would follow the American Au Pair model when there are thorough background checks and interviews and people come for two years, live with their family, and help take care of their dependent. Caring for a senior can be really hard work, but by offering a stable, vetted, and safe environment for immigrants short term, we feel it could attract some of the tens of thousands of needed staff, especially in parts of the country that are simply short of workers. Managed Competition: More than a few of our providers made it clear the current distribution of costs is not sustainable and the government’s ability to fill the funding gap will decline over time. That creates the need for more government interventions through rate management (Maryland) or beefed-up CON laws (NJ, HI, DC) to foster consolidation for cost reasons where possible, to avoid physician bidding wars for superstar talent, and simply avoid low-capacity buildings. Hospitals are like airlines – it’s all about yield. Even the worst payor mix hospitals are often sustainable today if they are full, all the time. Now apply some of that logic to Cath labs, OR etc. The challenge is that providers largely use consolidation to drive up rates and not consolidate supply of services. Providers are not the only ones who will need to feel the pain. The payor’s profits today are simply not sustainable. It’s not clear to us the mechanism to dramatically rope in those profits, but at least for the public side of the health care business, it needs to happen. See our segmentation paper for our forecasted bifurcation of care between a no-expenses-spared system for top earners who may selfinsure and a cost conscience system for everyone else. May sound dramatic, but that’s life in most sectors of today’s economy.

In Summary While the perennial cry of healthcare is to reduce costs and create value in the system, the fact is that healthcare spending will continue to increase in the years ahead as we must care for an aging demographic that will be riddled with chronic disease and the possible economic impacts of a whole person healthcare system are far off. The change that will be seen more readily lies in the balance of spending: as technical capabilities to treat patients in their home grow, demand will grow, which will direct dollars towards growing this industry in a positive feedback cycle. As the demand shifts, employment opportunities will also shift away from acute care, which will necessitate leaner operations in that setting (including automation). The healthcare mindset of the past was “build it and they will come,” but when we look to healthcare in 2040, the patient will demand that the healthcare system “build the infrastructure to meet me where I am.”

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Footnotes: i. ii. iii. iv. v. vi. vii. viii. ix. x. xi. xii. xiii. xiv. xv. xvi. xvii. xviii. xix. xx. xxi. xxii.

https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/ NHE-Fact-Sheet https://www.census.gov/content/dam/Census/library/publications/2015/demo/p25-1143.pdf https://www.aarp.org/retirement/planning-for-retirement/info-2018/retirees-age-in-place-aarp-study.html https://www.ioaging.org/aging-in-america https://www.caregiver.org/resource/caregiver-statistics-demographics/ https://www.aarp.org/content/dam/aarp/research/public_policy_institute/ltc/2013/baby-boom-and-the-growing-care-gap-insightAARP-ppi-ltc.pdf https://www.cbo.gov/publication/45471 https://www.kff.org/health-reform/state-indicator/waiting-lists-for-hcbs-waivers/?currentTimeframe=0&sortModel=%7B%22colId%22 :%22Location%22,%22sort%22:%22asc%22%7D https://money.cnn.com/2018/05/04/news/economy/health-care-workers-shortage/index.html https://www.geekwire.com/2018/quasi-dorms-adults-gain-popularity-affordable-option-booming-cities/ https://www.cdc.gov/chronicdisease/resources/infographic/chronic-diseases.htm https://www.statnews.com/2018/05/31/chronic-diseases-taxing-health-care-economy/ https://regenexx.com/blog/knee-and-hip-replacements-in-younger-patients/#gref https://www.aamc.org/news-insights/press-releases/new-aamc-report-confirms-growing-physician-shortage https://revcycleintelligence.com/news/how-will-automation-ai-impact-healthcare-employment#:~:text=For%20example%2C%20 home%20health%20aides,a%2054%20percent%20automation%20potential https://www.brookings.edu/wp-content/uploads/2019/01/2019.01_BrookingsMetro_Automation-AI_Report_Muro-Maxim-WhitonFINAL-version.pdf https://www.healthcarefinancenews.com/news/us-healthcare-system-could-save-163b-through-workflow-automation https://www.bloomberg.com/news/articles/2021-06-30/health-tech-firm-olive-valued-at-4-billion-after-vista-round https://www.marketscreener.com/quote/stock/NANTHEALTH-INC-28377295/news/ NantHealth-Files-Mixed-Shelf-for-Up-to-200-Million-in-Securities-32858954/ https://www.multivu.com/players/English/8294451-cigna-us-loneliness-survey https://www.npr.org/sections/health-shots/2018/05/01/606588504/americans-are-a-lonely-lot-and-young-people-bear-theheaviest-burden Barron, Daniel: “Reading Our Minds: The Rise of Big Data Psychiatry.”

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About Array Advisors Array Advisors is a healthcare strategy consulting and operations optimization firm dedicated to both improving the way healthcare is delivered and helping clients overcome their business challenges. The team can help clients with strategic plan development including market analysis, ambulatory and service line planning, provider strategies and integrated capital and facility planning as well as operational analysis including scenario modeling, benchmarking, and lean design.

Author Contacts

NEIL CARPENTER, MBA

JILLIAN BARBARO, MHA

Vice President Strategic Planning

Strategic Planner

d: 202-795-3707

d: 202-788-5631

m: 917-576-9980

jbarbaro@array-advisors.com

ncarpenter@array-advisors.com

ISABELLE MORATTI

ALEXANDRA LARAMEE, LCSW

Array Advisors Intern

Behavioral Health Clinical Operations

imoratti@array-advisors.com

alaramee@array-advisors.com

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