Top Reads Overview

In an age of unprecedented change, staying current has never been more important. Our team at Chartis is curating news most relevant to the healthcare industry and tracking the topics that are trending on seven key issues: high reliability care, digital and advanced technology, financial sustainability, health disparities, the health ecosystem of the future, partnerships, and the provider enterprise. Each week, we break down what’s happening and why it matters.

The Buzz This Week

As we move into the second year of COVID-19, we face the third—and far worst—surge. Case numbers in the United States top 19 million, and the death toll is more than 364,000. The next few months are likely to bring continued infection, a severely short-staffed healthcare system, and increased numbers of patients facing long-haul symptoms.

Two vaccines, from Moderna and Pfizer, were developed, approved, and produced in record time, and a third may follow in 2021. However, following the approval process, the rollout of the two approved vaccines has been slower than planned at best (4 million doses delivered instead of the stated goal of 20 million) and chaotic at worst. Frontline workers, including numerous primary care physicians, are yet to be vaccinated. Guidelines for distribution are interpreted at the state level, and many of the states have relied on hospitals and health systems to distribute the vaccines. Often primary care providers are not affiliated with a larger health system, and thus may fall further down on the prioritization list, despite the high risk they face. Additionally, new variants of COVID have been identified in the UK and South Africa. Initial indications are that current vaccines would still be effective on the variants, but that remains to be seen.

Why It Matters

Despite the worst still potentially yet to come, there are also glimmers that an end to the pandemic could be in our future. We must improve the vaccine rollout, while continuing to maintain distancing and mask practices. Improvements to distribution must include:

• Addressing vaccine operational difficulties. As we have previously noted, Pfizer’s vaccine requires freezer storage, and both Pfizer and Moderna require two vaccination doses. The vials also come in five or 10 doses and must be used quickly, adding a layer of complexity for vaccinating rural communities.
  
• Investing in the vaccine administration process and guidelines for vaccine prioritization. Most vaccinations are being administered by already short-staffed public health facilities or health systems. Because vaccination rollout was left up to the states, it has meant 50 different plans for how distribution will proceed, along with significant misinformation. Herd immunity will be dependent on getting 70 percent (or higher) rates of vaccination; uneven rollouts could mean certain areas or populations are left largely unvaccinated and still at risk for spread.
  
• Ensuring continued efficacy of the vaccine. As mutations in the virus arise, efficacy will need to be tested, and future vaccines may need to be adjusted to ensure appropriate protection.

Beyond the vaccine, we must consider what long-term effects COVID will have on us and our healthcare system. Burnout is at an all-time high, long-haul patients will continue to need care even after a successful vaccine rollout, care and outcome inequities have been widened, and many rural hospitals and physician offices may be forced to close, leaving communities further underserved. We go into year two with optimism, but there is still much work to be done for that hope to be realized.

The Buzz This Week

As we reflect on a tumultuous past year and consider what’s likely to come in 2021, several themes warrant highlighting:

• At the start of 2021, the United States is facing an unprecedented surge in COVID-19 cases and hospitalizations. While our nation and healthcare systems will need to focus on and persevere through the next several months until widespread vaccination occurs, the longer-term lessons should not be lost. Specifically, that this nation and the world were woefully unprepared for a pandemic. Policies and systems should be put into place in anticipation of another inevitable pandemic or natural disaster, including required adequate supply stockpiles, tested protocols, and a system for clear and consistent communication. A better understanding of the science of viruses is needed, including the connection between the health of nature, wildlife, and humans, a concept known as One Health. The impact on healthcare professionals cannot be overstated and will endure well beyond the threatening presence of COVID. Even when the virus recedes, our healthcare providers will face patients with long-term physical and mental effects from COVID and/or from delaying necessary healthcare due to the pandemic. Many will face severe economic challenges from temporarily shuttering their practices and will have to tackle the psychological damage they may experience themselves.
  
  
• Telehealth adoption by providers and consumers accelerated rapidly with the onset of the pandemic. Telehealth visits peaked in April, according to many data tracking entities, including the Telehealth Adoption Tracker from Chartis and Kythera Labs. Since the spring, telehealth/virtual visit usage has fallen for most services in most markets but persists for certain services, such as behavioral health. The future role of telehealth has drawn much speculation, with most acknowledging that it is here to stay in some form, but that reimbursement parity, clinical specialty suitability, and provider/consumer adoption will drive the extent to which its use continues.
  
  
• Health tech start-ups continue to attract investment from private equity and venture capital firms. Many of these start-ups are focusing on lower-acuity services or solutions with less regulation and a higher degree of consumer willingness to pay out of pocket. These areas include: virtual/on-demand urgent care, primary care, behavioral health, and physician consults; direct-to-consumer and at-home diagnostics; remote patient monitoring; medication adherence; and wellness and lifestyle improvement.
  
  
• The large-scale impact of big tech and other industries on our healthcare system, and their near-term threat to legacy healthcare entities, may be lower than anticipated. As these new entrants to the healthcare space experience the complexity and limitations of the U.S. healthcare system, their focus may narrow. The dissolution of the Amazon-Berkshire Hathaway-JP Morgan Chase venture Haven, launched to tackle the familiar but colossal task of improving patient outcomes and satisfaction while lowering costs, is a sign that broad-reaching solutions may be abandoned for more focused projects. For example, Amazon continues to grow its Amazon Care pilot (virtual care for employees) and its online pharmacy Pillpack. Other tech giants such as Apple, Facebook, Google, and Microsoft are each leveraging the COVID-induced acceleration of the digitization of healthcare with their own niche and focus, as outlined in CB Insight’s latest Big Tech in Healthcare report.
  
  
• The once bright line dividing payors and providers has further blurred. New payor-provider partnerships continue to emerge, and the number of entities operating as both payor and provider is growing. Those operating in this blended space are further diversifying and strengthening their capabilities. Insurer United HealthGroup’s subsidiary Optum is now the largest employer of physicians in the U.S., with more than 53,000 physicians. Earlier this week, Optum announced a $13 billion acquisition of Change Healthcare, a healthcare technology company focused on value-based care that provides software and services to streamline the billing and payment process, utilize health information exchange data, and improve patient experience and outcomes. The company will join OptumInsight to “streamline and inform the vital clinical, administrative and payment processes on which health care providers and payers depend to serve patients,” per Andrew Witty, CEO of Optum, as reported in Fierce Healthcare.

Why It Matters

The healthcare ecosystem is changing as investment and attention shift, advances are made in medicine and technology, and traditional and non-traditional entities adopt new roles.

• Legacy providers — physician practices, hospitals, and post-acute providers — will face years of medical and financial fallout from COVID, as well as new payment models. The competitive landscape will continue to change as big tech and tech start-ups as well as payor/providers attract patients and chip away at corners of legacy providers’ traditional business. Those that hesitate will likely get left behind, and therefore innovation and diversification will be areas of focus in the years to come.
  
  
• Within health tech, an increase in market fragmentation is likely in the short-term as start-ups continue to form, with a longer-term consolidation as some fail and others merge. The near-term impact (or “threat”) of big tech in healthcare may be overstated, and their projects and initiatives may take a narrower focus. They still are well-positioned to disrupt certain parts of the healthcare system in the longer-term.
  
  
• As longer-term implications of COVID are studied, there is hope that a series of policies and coordinated approaches will emerge to better prepare for a future pandemic or public health crisis. While health professional burnout has been an area of concern for years, the impact of COVID will likely augment burnout levels and change the nature of the effects, threatening our population of capable and supported health professionals if effective approaches to prevent and address burnout are not enacted.
  
  
• With budget crises in many states and ravaged financials among many healthcare providers, the competition for more of the “healthcare dollar” will intensify. The slow growth and adoption of value-based care models may accelerate through vertical integration and an increase in payor-provider entities.