With many service lines further transitioning to outpatient and home based, opportunity is knocking – and providers and suppliers can answer by forming forward-thinking relationships that better patient outcomes.
“One of the questions we get a lot is how to better understand the characteristics of alternative sites. What markets are shifting? What does that look like? What could, or what has, shifted already? What’s next?” — Amy Brouhle, Vizient National Vice President of Supplier Strategy and Business Development
There were plenty of problems at the onset of the pandemic, but one that most plagued hospitals’ efforts to conserve personal protective equipment was monitoring the glucose levels of patients with diabetes — after all, entering a room to perform finger sticks meant increased exposure to the virus and the necessity to change PPE.
But in that very specific problem, Dexcom and Scripps Health saw a solution. The two companies teamed up to lobby the government for emergency authorization of a remote continuous glucose monitoring system for inpatient use, not just for those with diabetes but for any patients with elevated blood sugar levels requiring insulin. By April 2020, they received authorization and hospitals across the country implemented the system as part of their COVID-19 protocols.
“What was brilliant about this was that they recognized the opportunity to work together to solve this really important challenge,” said Jeff Moser, principal, intelligence at Sg2. “Everybody won in that scenario.”
And while it’s an example specific to the acute care setting, Moser sees similar out-of-the-box, outcome-bettering opportunities as more sites of care shift to outpatient and home based. As outlined in Sg2’s 2022 Impact of Change report, the migration of surgical volumes across ambulatory sites — from the hospital outpatient department (HOPD) to the ambulatory surgery center (ASC) to the physician office — will continue throughout the decade, with ASCs already experiencing a boom of activity. At Vizient’s annual Supplier Forum in April, Moser and Amy Brouhle, national vice president of supplier strategy and business development for Vizient, presented on the biggest market challenges facing providers and shared key drivers that can be leveraged to build collaborative and growth-oriented solutions.
It’s a topic that stays top of mind as they use data, analytics and expertise to guide providers and suppliers in their quest to better healthcare for everyone. Here, they discuss some of the challenges — and more importantly, opportunities — facing both groups, and how they can identify the best ways to come together to innovate in non-acute settings.
Q: Many service lines have shifted from inpatient settings to outpatient and home-based settings and likely will continue to do so. What are some of the primary factors behind that shift?
Moser: One reason is that the pandemic pushed technology advancements aggressively, so the ability to deliver care at home became easier and more pervasive. The second is the patient's desire to not present on site at a clinic or hospital. The third is that the trajectory of the inpatient landscape is so complicated for hospitals in terms of margin management that they have compelling reasons to more aggressively move toward serving higher-acuity patients. The fourth is the shift of procedural volumes to other sites of care like the hospital outpatient department or ASC. Hospitals can't effectively backfill procedural volumes in the operating room if the inpatient center is full of chronic conditions that could be treated elsewhere. For the math to work, they have to figure out No. 3 and No. 4 jointly. The first two reasons I highlighted are acting as accelerators to allow them to get it done. It’s like the perfect storm has descended and is pushing this shift. Amy, what did I miss?
Brouhle: Two factors. One is payer pressure. Commercial payers especially have been instrumental in shifting cases out of the acute care facility into lesser acuity sites of care like the ASC because it's been shown that quality care can be provided in a setting that theoretically is less expensive. In some regard, it’s a little like what we saw in imaging back when it was moving out of the acute care facility. The other goes back to what Jeff said about technology enablement. Device innovation, surgical approach and anesthesia pain management also have allowed more complex cases to effectively be handled in alternative sites outside of the acute care hospital OR.
Moser: The qualification, though, is that there is a huge rate-limiting factor in this, and it’s around workforce management and scalability. These programs are hard to stand up and the strategic imperative for shifting the site of care isn't as strong for an acute care facility that doesn’t have capacity constraints on the inpatient side.
Q: Based on your presentation at this year’s Vizient Supplier Forum, it appears that cardiac and musculoskeletal care, for example, will shift even further to outpatient settings in the next five to 10 years. Are there other areas where we can expect to see that same level of shifting, and what do providers and suppliers need to consider as that happens?
Moser: Cancer has always been somewhat of an outpatient service line, and it will continue to move toward the home setting with infusions and possibly even chemotherapy.
Suppliers should consider how contracts are written based on who they’re negotiating with. Only 25% of health systems have a significant ownership stake in ASCs, and there are different vendors building these hospital-at-home programs for health systems and other community entities. So that's another emerging channel in terms of point of contact for the supplier community. And then think about Wal-Mart and Amazon and all those other players that are branching into healthcare and presenting suppliers with unique opportunities.
The other thing is for suppliers to understand the why. Why did a particular health system decide to accelerate or decelerate their shift to alternative sites? If they're moving from inpatient to building more capability at home, it could be because they're trying to manage the balance in case mix. It could also be that they're pushing the accelerator on value-based care adoption. Then you think about bundled payments, and you think about the supplier as a partner in delivering care in a more value-oriented way.
Brouhle: One of the questions we get a lot is how to better understand the characteristics of alternative sites. What markets are shifting? What does that look like? What could, or what has, shifted already? What’s next? Suppliers are trying to understand the dynamics of the landscape, the attributes of those sites of care and what could potentially happen in the future because these are not sites they've historically considered from a customer or sales perspective. One of the top three questions we get from suppliers today is, “Can you help us with ambulatory strategy?”
Q: What’s your response when a supplier asks that question?
Brouhle: For one, it’s important to understand what the reimbursement landscape looks like in a site of care. For a site to have positive margins, it must be very efficient so as many cases can be performed as possible — sort of the “focused factory” concept. Suppliers really need to understand what those dynamics are because they're unlikely to get the same price points they were getting in an acute care setting. The other thing is patient selection. One of the things we talk to suppliers about is that they know their products better than anybody. They can help providers think about where the product should be used and for what type of patient.
Moser: I think it's about keeping an eye on the future — when the domino falls, it falls quickly, and it has a ripple effect throughout the industry. Our guidance to suppliers is to look at their core products and services and think about various scenarios and the likelihood of each scenario happening. Essentially plotting out an easy 2x2 matrix regarding what’s happening in the industry, whether it’s related to them, how quickly it might happen and what the impact of it happening would be. They need to ask themselves if they need a strategy in place now or is this just noise that’s not going to disrupt them that much.
Q: Obviously, providers and suppliers have their own unique needs. But are there any general strategies for how they can come together to really innovate in these spaces?
Moser: We were on a call with one of our supplier partners, and they were talking about how they could reposition their brand. One of the questions was: Is there a unique way to collaborate with health systems and community partners to improve health equity through better access and care delivery to the patient community? The Integrated Delivery Networks (IDN) are recognizing that's hard for them to do on their own and there's a unique opportunity for suppliers to come in and help with analytics, product management, and patient education and engagement. Health systems often find it difficult to stand up hospital-at-home programs on their own. Should they partner with a supplier that’s already in that space? I think the short answer is yes.
Brouhle: We’re trying to intentionally drive the role of convener in a way that demonstrates value both on the member and supplier side. Whether you think about clinical programs or awareness related to above-brand solutions, suppliers are really good at a number of things that providers are not. So the ability to play matchmaker — “Hey, I know you've got this issue, and I know there's a solution over here. Why don't you get together and talk about how you're going to solve it since you both have this as a top priority?” — and help them define what the success factors are going to be and how we're all going to work together is really important.
Q: You talked about surgical advancements and the technology that's driving some of these shifts in clinical care settings. Are there any specific innovations you're seeing on the horizon that you think may further drive care out of the inpatient setting?
Moser: There are some being adopted right now around at-home imaging services, such as portable MRI machines. The entry point pricewise is pretty minimal, and it can do basic head and neck, extremity-type MRI work. You could have that at a high school sporting event, for example, versus having to transport an athlete to a hospital for a scan. Those types of technologies will likely continue to push care to different sites because you can answer more questions diagnostically now than you could just a few years ago. Handheld ultrasounds have been around for a while now, but it's the sensitivity of the equipment that is improving dramatically. Technology is advancing to the point where it's hard to push back on it.
Brouhle: There are some products potentially coming to market this summer in the neuromodulation and spine and pain management space that are going to utilize AI and advanced sensing technologies to read the body and send information back to the device. The device will get smarter based on the body's reaction to pain and nerve stimulation. There also is a lot of drug development into diseases that haven't seen as much advancement like Parkinson's and Alzheimer's, and more focus into disease states that have traditionally been chronic and debilitating.
Moser: It’s also fascinating to see what’s being done for dementia patients using virtual reality. Clinicians can use VR to place patients in a scenario that they recognize, like the home they grew up in. Their cognitive abilities improve because they're in a familiar environment.
Q: As you work to guide providers and suppliers through these transitions using data and expertise, are there any major gaps you've identified that they need to address? Are there opportunities they could be taking but just aren't capitalizing on?
Brouhle: In most organizations, there's a significant disconnect between supply chain and service line. Let’s take orthopedics as an example. You have somebody who heads the orthopedic service line, and they’re making strategy decisions. But those decisions are often divorced from anything having to do with supply chain. What I’m excited about is that there seems to be renewed provider interest in trying to better connect those dots from a clinically integrated spend perspective so that they can forecast spend and understand where the demand is and where it could be in the future.
Moser: Think about the way products are identified and pulled into a health system. Typically, suppliers present the efficacy and price of their product, then the internal clinical counsel evaluates it and decides whether to adopt it. As I've had conversations with suppliers and health systems, my suspicion is there hasn’t been much change to that process — it's the same old recipe that they're following, but it could evolve into something very different.
Instead of simply talking about the efficacy of their product, suppliers need to talk about the value proposition. What a vendor could say is, “Look, our product is good at this outcome, but it also will help you with your clinical workforce challenges, it will help you with length of stay management, it will help you with 30-day readmissions.” That needs to happen in a universally consistent fashion. If suppliers and IDNs can both elevate their games, then it will be better for patients and clinicians.
Q: How can approaching the supply chain as a two-sided marketplace better patient outcomes moving forward?
Moser: The opportunities for suppliers and providers to work together more closely have never been better. And there are opportunities for suppliers to work with each other. If I'm supplier, and I think about what the patient needs across their journey, I can be transactional with my point of contact for the IDN and sure, I can be successful. But imagine if I partner with another supplier that also has an impact along the patient journey, and together we go to the IDN to create a more unique solution. Maybe I'm just being pie in the sky here, but the more people work together, the more successful they can be — and everybody wins.