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The State of Healthcare: A Roundtable Discussion for Businesses

Publication: D Magazine

Industry experts discuss the role of employers in today’s healthcare system, technology and AI updates, health insurance improvements, and healthcare landscape predictions.

With Anthony Placencio, Partner, RSM US LLP; Coleman Moore, Senior Vice President, Commercial Banker, Commerce Bank Dallas-Fort Worth; Andrew K. Lee, M.D., MPH, Radiation Oncologist & Medical Director, Texas Center for Proton Therapy; James Springfield, President, Texas Plan & Senior VP, Markets, Blue Cross and Blue Shield of Texas; Cary Grace, President & CEO, AMN Healthcare; James C. Scoggin, Jr., Chief Executive Officer, Methodist Health System

What role do employers have in the overall healthcare ecosystem, particularly when it comes to cost control, improving health equity, and holding providers accountable for quality outcomes? 

Andrew Lee, M.D.: Employers need to optimize healthy work environments while also providing appropriate levels of healthcare insurance. Companies should hold their insurance companies accountable, particularly when employees have a self-funded health plan. One of the biggest challenges in oncology around delivering appropriate levels of care and patients returning to work is the relatively stringent policies of some health insurance providers. Overall, employers have significant influence in shaping the healthcare landscape for their employees and communities.

James Springfield: Employers have more impact than most folks realize. For perspective, nearly one in two Americans receive their healthcare coverage through an employer-sponsored health benefit plan. Our employer groups are continuing to demand more visibility and control across their healthcare programs and spending. We maintain an open-ended relationship with them to identify opportunities for them to control costs and improve health outcomes by promoting preventive care, encouraging relationships with primary care providers, and expanding benefits that help employees meet basic needs. Additionally, employers, along with payors and providers, are part of the combined effort to advocate for quality outcomes.

Cary Grace: Employers have a strong vested interest in contributing to the health and well-being of their employees. This is particularly true today when many people are reassessing where, when, and how they work. By providing pathways to better health, through wellness programs, emotional and family support and other channels, employers can enhance employee satisfaction and retention. In the larger context of the healthcare system, better employee health, with an emphasis on prevention, also reduces utilization of expensive, interventional services and thereby reduces overall costs. Providing healthcare benefits and promoting wellness for all employees helps ensure improved health equity. Employer-based health insurance remains a key to ensuring health equity and is foundational to our system.

James C. Scoggin, Jr.: All employers who are major healthcare providers should, as an employer, share the same priorities of any employer, while also holding themselves accountable, as healthcare provider, for outcomes. Employers can steer improvements in healthcare affordability, access, and quality for their workforce by influencing cost control through benefit design, wellness programs, and collaborating with providers. Health equity can be addressed by offering comprehensive benefits, including mental health support and preventive care, and addressing disparities in access. Through designing meaningful quality measures and incentives, employers and providers can work together to offer superior care while achieving positive outcomes. 

Coleman Moore: Employers are one of the largest payers in the healthcare ecosystem, especially when you consider the majority of Americans receive their healthcare coverage through an employer-sponsored health benefit plan. Employers interested in moving the needle for their employees can continue to focus on more proactive and preventive approaches to healthcare, such as behavioral health, more in-depth maternal healthcare, IVF coverage, etc. These are benefits that few employees have access to through their current employee benefits plans.

Anthony Placencio: Employers have the ability to influence costs by selecting plan designs, such as high deductible health plans that make employees more cost conscious on how they spend on their health. The employee’s cost share of an employer sponsored family plan has increased to 65% since 2010, based on the 2023 Kaiser Family Foundation Employer benefit survey. Employers can influence the types of benefits their employees receive, such telehealth visits, mental health coverage, or access to preventive health services, which could act as a catalyst for employee retention. Broadening access to these types of services can improve disparities in health equity and can bend the cost curve downward over the course of time.

Consolidation continues to be a factor in the healthcare industry, beginning with hospitals but moving into primary care and specialty practices. What are the pros and cons of continued consolidation in the market? 

Cary Grace: The need for consolidation in provider settings has been driven by the need for efficiency and cost pressures. Managing broader requirements and cost burden becomes impossible for individual entities, especially as healthcare becomes increasingly technology enabled. Economies of scale continue to push for consolidation in healthcare. Many times, the goal of consolidation is to increase efficiency and care coordination and thereby achieve better outcomes at a lower cost. This is easier said than done, but ultimately helps create more efficiencies when the incentives are aligned in these consolidations. Partnerships between healthcare payors, providers, and service providers like us are key in developing these ecosystems. There is a definite benefit to patients when their medical histories, primary care, and specialty care are all housed and coordinated under one umbrella. This eliminates the fragmentation and inefficiency we have seen in the past. Caregivers need to continue to be at the heart of the new models in delivering care. Doctors, nurses, and other healthcare professionals will always be the foundation for strong healthcare delivery.

James C. Scoggin, Jr.: At the health system level, consolidation is quite mature in North Texas. One positive is hospitals that might otherwise have closed remain viable due to the support of a larger system. All health systems have appropriate mechanisms in place to establish and support physician organizations that are employing or otherwise making available to the community more primary care and specialty practices. While there are certainly challenges to the increased physician employment trend, at least health system and physician interests are more aligned around the patient care delivery model. Relative to consolidation of physician practices within venture capital and private equity, the industry is experiencing too many examples of bankruptcies and dissolutions which can be destabilizing within a market.

Anthony Placencio: Some of the trade-offs may include expansion of specialty and primary care services that certain communities did not have access to before a merger of two organizations and enabling better technology utilized in the care of services. This helps combat the access issues that exist in healthcare. The cost of care is always a concern for many when mergers occur and fear of communities will see higher costs association with the care provided, post-acquisition.

Andrew Lee, M.D.: Consolidation of healthcare may allow more cost-effective optimization of existing resources. However, it may also result in more difficult access to healthcare for patients in remote areas and could stifle competition and subsequent innovation. Balancing these factors is crucial for ensuring positive outcomes for both patients and providers.

James Springfield: I have an extensive hospital background, so in that space there were claims from private equity or other healthcare industry firms involved in merger and acquisition activity that consolidation would result in generating greater efficiencies, lowering costs, and more coordinated patient care. However, typically consolidation results in high healthcare prices, skewed market power, and decreased competition of health systems. Our members deserve 360-degree, whole-person care, and employers are already facing inflationary and recessionary pressures, so we have a duty to stand up for affordable, quality care.

Coleman Moore: A benefit of such consolidation includes those practices that merge with multi-specialty providers, which can offer patients accelerated diagnostics and treatment options, often within the same location. In addition, consolidation can help providers operate more efficiently, which is a huge benefit to patients who live in underserved areas. A resulting drawback to consolidation, however, is that some healthcare consumers may have fewer options. When there are fewer competitors, consolidation may sometimes drive up prices as well.

How is artificial intelligence and specifically large language model-based models impacting how healthcare is being delivered? 

James C. Scoggin, Jr.: AI is already impacting care delivery today, most notably in clinical care and administrative workflows. There have already been AI-driven imaging tools deployed for rapid detection of stroke and cancers and Intelligent Process Automation assisting with routine billing office tasks. Next up are AI-automated voice driven clinical notes. The possibilities for AI are unlimited but pose challenges of validity and responsible use. Hence, healthcare providers should focus on proven solutions to help solve targeted problems. AI should work for healthcare providers on behalf of their patients and caregivers and not the other way around.

Andrew Lee, M.D.: The oncology space has yet to see a large impact from artificial intelligence or large language model-based models. Within proton therapy, AI is used as part of the treatment planning process to help the radiation oncology team better define tumor targets as well as identify the normal tissues that should be spared from radiation. There is growing research and utilization of AI to optimize radiation treatment planning. 

Anthony Placencio: One specific issue AI and LLM tools are addressing in healthcare is physician burnout. We have helped systems utilize these tools to augment the patient message response process and drastically reduce the amount of time it takes a physician to respond to a patient message, saving a significant amount of administrative time that can improve margin and create better patient outcomes. AI adoption in healthcare will expand rapidly due to the data trove that exists in healthcare. Healthcare data represents 30% of the world’s data, according to a report by RBC markets. 

Cary Grace: AI is impacting healthcare in several ways, and we have been using AI-enabled technology in both our workforce solutions and increasingly to automate our company. Primary among them are: 

  • Work automation and aids to make care more effective and improve the healthcare experience for both patients and clinicians
  • Forecasting and prediction accuracy—both on the logistics side and for enhancing the patient journey and projecting patient needs
  • Clinical applications, particularly diagnostics, where AI is assisting radiologists and other clinicians to be more effective in direct patient care.

As we look to implement and then scale AI applications in healthcare, we must ensure that those applications are truly creating a net positive experience, outcome, or reduction in cost and friction. AI already is a game changer in workforce management and provider job satisfaction, and we are just scratching the surface.

James Springfield: The future of healthcare delivery combines people and advanced analytical capabilities, which creates a responsible form of augmented intelligence. To be clear, we are keeping the human element in the work we do as we utilize AI to lead and innovate. We are focusing our efforts on using AI to augment human judgment but not to replace it. We’re deploying AI in elements across our business, from claims processing and clinical operations to member and provider engagement and retention and have seen a positive impact on how efficiently we can support our members and healthcare provider partners.

There has been federal pressure to increase price transparency and reduce surprise billing for patients, with many hospital systems and providers slow to integrate or resistant to change. Are these changes worthwhile, and what can be done to speed them along? 

Coleman Moore: Price transparency is important. We’ve all heard and seen ways that some patients must cut corners to manage their healthcare expenses, sometimes going as far as missing annual exams or rationing medications. Patients should be able to know how much a procedure costs in advance of scheduling it. To ensure patients understand how much they will pay, cost estimator tools should be readily available and show accurate ranges.

Andrew Lee, M.D.: Increasing price transparency and reducing surprise billing can empower patients to make more informed healthcare decisions and protect them from unexpected financial burdens. Many services and treatments provided in a hospital-based setting are billed at a higher rate than the same services provided at a freestanding center. This does not necessarily translate into higher quality care or a higher level of expertise. Policymakers can enforce stricter regulations and penalties for noncompliance, incentivize providers to adopt transparent pricing practices, and invest in consumer education to raise awareness around healthcare costs and billing practices. Price transparency and minimization of surprise billing should become the norm.

James Springfield: Price transparency and knowing how much a procedure or visit will cost makes healthcare easier to understand. We encourage providers to be timelier and more transparent with their patients about costs, including posting prices. 

James C. Scoggin, Jr.: All major healthcare systems should be advocates for their current and future patients and support the efforts for healthcare pricing transparency. For example, in 2019, Methodist launched a self-service, patient-facing cost estimation tool online, and since then has continuously generated individualized patient estimates of out-of-pocket costs regardless of a patient’s insurance status. It is important to assist patients in their understanding of the potential financial liability before services are performed and work to encourage current and future patients to request an estimate for any hospital procedure/service/test by accessing online Price Estimate Tools, Price Transparency Files, or meeting with facility financial counselors by phone or in person.

What is one change you would make to the healthcare system to impact unsustainably rising costs? Why? 

James Springfield: The healthcare industry is long overdue to shift away from the fee-for-service world to one that incentivizes value, quality, and outcomes. But that cannot happen without meaningful collaboration between payers and providers. A path we must consider is moving toward supporting doctors as much as we support health systems, which means contracting directly with independent physicians so their patients and our members can access care at affordable rates. To contain the rising costs of healthcare for our members, we must empower physicians so they can make healthcare decisions that match the needs of their patients.

Andrew Lee, M.D.: One of the largest impacts to healthcare optimization and cost of care have been the prior authorization requirements and the utilization of third-party benefit review organizations by payors. These factors have increased the time to care delivery and negatively impacted the overall quality of care across the healthcare landscape, while providers cope with greater administrative costs and patients grapple with unclear benefits. Revising the prior authorization and review process on a large scale would save time and improve quality, particularly important considerations when fighting cancer.

Cary Grace: There is no one tweak we can make or button we can push to address unsustainable costs in healthcare. This is a societal problem. We have a growing and aging population that engages in many unhealthy lifestyle habits and choices, creating huge needs that are costly to address. We are a healthcare workforce company, so I would like to see the continued focus on new workforce models to address expected shortages of healthcare providers as our population ages. We are innovating on these models with our clients to help them use data, analytics, and technology automation to ensure they have the right caregivers when and where they need them.

Coleman Moore: While there are multiple solutions to decrease the rising cost of healthcare such as the reduction of administrative costs, increased outpatient care and controlling prescription prices, a major change to impact rising costs would be to also focus on preventive care. Changing from disease management to prevention will take an ongoing shift of the current model from providers, payors, and consumers. 

Anthony Placencio: The recent cybersecurity breach at Change Healthcare serves as a stark reminder of the vulnerabilities within the healthcare data transfer ecosystem. This attack exposes the inherent risks associated with the supply chain and underscores the need for robust business practices to mitigate cyber threats. However, the path toward improved security presents a compelling opportunity for healthcare organizations. By implementing stricter third-party vendor management protocols, strengthening enterprise risk programs, and refining ransomware response plans, significant cost reductions can be achieved. Additionally, enhanced security practices can lead to improved consumer retention as consumers become more confident in how their data is protected. This, in turn, can translate to higher margins for healthcare providers.

How does the Dallas-Fort Worth healthcare business community differ from other major regions across the country? What are our competitive advantages and differentiating factors? 

Cary Grace: We are a large, growing area with many employed, insured patients—and a lot of competition for these patients. Unlike some markets, we are experiencing growth, with multiple hospitals under construction. We have the advantage of being a desirable area attractive to healthcare professionals. Dallas-Fort Worth has become a national healthcare hub and is in an enviable position and we feel very fortunate to be headquartered here and an active partner in the health and wellbeing of the Dallas-Fort Worth community.

Anthony Placencio: There is a thriving healthcare hub in Dallas-Fort Worth. There are world class children’s hospitals, academic medical centers, modernized safety-net hospitals, and a sizable health-tech hub that when woven together, spurs impactful innovation that creates better patient outcomes for the Dallas-Fort Worth area that is unrivaled when compared to other majority cities and communities.

Andrew Lee, M.D.: Dallas-Fort Worth offers a robust infrastructure that includes a leading-edge healthcare landscape. Dallas-Fort Worth benefits from a diverse economy, drawing talent and investment from various industries. There is a favorable regulatory environment and low cost of living compared to some other major healthcare hubs, making it an attractive location for businesses. Strategically locating a hub in the center of the country enhances accessibility and connectivity, which helps to facilitate the distribution of healthcare services and products nationwide

James Springfield: Dallas-Fort Worth is a strong and competitive region with explosive growth and a large business community. Six of the 25 largest employers in North Texas are in the healthcare industry, and health systems, insurance, and other subsectors represent about 15% ($52 billion) of the regional economy, according to the Dallas Regional Chamber. Compared to other major regions, Dallas-Fort Worth boasts a robust network of healthcare providers, innovative medical technologies, academic healthcare institutions, and a favorable regulatory environment.

James C. Scoggin, Jr.: Several factors that contribute to the healthcare business community in North Texas are a strong economy, robust population growth, biotech development, expanding workforce, and growth of new start-up corporations and existing corporations relocating to Dallas-Fort Worth. Businesses, including healthcare, can innovate and plan for success rather than just maintaining and surviving. It is also impressive in many areas of Dallas-Fort Worth that the planning that has gone into infrastructure to support the growth that is occurring. A major concern is the number of uninsured in Dallas-Fort Worth and Texas. One change to lift all boats would be expanding Medicaid.

Coleman Moore: With several large health systems covering a broad swath of our geography, we are very fortunate in Dallas-Fort Worth to have access to world-class healthcare and critical subspeciality providers. That said, we are experiencing unprecedented growth in the region, and there are underserved areas and populations. Our incredible healthcare resources should be widely accessible. Additionally, there is a shortage of behavioral health resources, just as there is in other areas of the nation. To maintain our reputation for world-class healthcare, more behavioral health options would be beneficial to Dallas-Fort Worth.

What is one healthcare innovation you can see having a major impact in the next five years? 

Andrew Lee, M.D.: Healthcare is seeing continued improvements in refining treatments for a given level of disease, especially in cancer. This allows us to match the appropriate level of therapy for any given stage of cancer. We are learning and making improvements at a higher rate than ever before, allowing us to optimize care on an exceedingly personalized level. 

James Springfield: In a fragmented system, I’ve seen that technology innovation has been an impactful tool to help keep members and customers in control of their benefits and health journey as the consumer market is changing. For example, we offer Collective Health’s integrated solution, which provides a single digital platform that enables self-funded employers to administer benefits, reduce workload, manage costs, and help manage the health of their people in one place. For members, it enhances navigation, providing a personalized experience with products and features that make it easier to understand and manage their healthcare, from wherever they are.

Cary Grace: Technology. New uses of technology are a resource across all aspects of healthcare that will likely prove transformative in how we predict patient needs, diagnose problems, achieve better outcomes, and more efficiently manage the workforce. It is a high-tech way of achieving a high-touch result. It does require system interoperability and seamless connections to be effective. Technology innovation already has had a major impact on how AMN Healthcare delivers for our clients, and I am excited to see how it will impact the healthcare system as a whole.

Anthony Placencio: The healthcare industry faces a multitude of headwinds, including rising administrative burdens, physician burnout, health disparities, and an ever-increasing number of payment denials. These challenges are rapidly outpacing the growth of the healthcare workforce, creating a critical need for innovative solutions. In this context, generative AI emerges as a powerful tool for positive disruption within the healthcare ecosystem. This technology has the potential to address several of the industry’s most pressing issues. For instance, generative AI can be used to automate administrative tasks, freeing up valuable time for physicians. Additionally, it can be employed to develop automate prior authorization protocols and can help increase the access and timeliness of patient-centered care.   

How has the trend of care moving out of the hospital and into the home impacted your business? 

James C. Scoggin, Jr.: The business impact has been minimal to date. However, over time cost pressures from payers, technology advancements, and patient/family preference will determine the ultimate destination of in-home care. Hospital at Home is a complex process and requires large dollar investments in monitoring technology, staffing, and workflow design as well as development of the program to your patient population. The Centers for Medicare and Medicaid Services (CMS) has, as of April 2024, not extended the waiver which allows hospital at home to operate with payments from CMS past 12/31/24. The American Hospital Association is pushing hard for CMS to extend the waiver and make reimbursement permanent for this type of care, which is essential to expanding these services.

Anthony Placencio: We’ve seen this trend in the healthcare industry positively impact consumers and employees as care providers and home recovery care companies collaborate to enhance and improve the care for consumers at the convenience of their home. Hospitalization or recovery at home programs enable consumers the ability to recover more efficiently at home than in a hospital setting and can help reduce the burden care teams in a hospital setting. This may allow consumers in the workforce to get back on their feet and working sooner than if care was completed in a hospital setting. We know this trend will continue to accelerate given $265 billion  of Medicare services could be delivered in the home by 2025. We would expect commercial carriers to move in this direction as well.

James Springfield: Technology is shaping how we expect to receive care and removes numerous barriers to healthcare access. Trends show consumers like the convenience factor of care in the comfort of their home because members want access to the right care, in the right place, at the right time. That could look like members calling our nurse line at midnight, seeking virtual primary care or behavioral health visits, or scheduling a routine surgery with their provider at an outpatient facility. 

Coleman Moore: Removing barriers for patients to receive the care they need is important, and home healthcare is becoming a more widely embraced method for helping achieve that goal. In many cases, home healthcare can be a more affordable model than receiving treatment within a hospital. In addition, patients who live alone or who don’t have the required support systems they need for transportation to their healthcare provider can recover at home instead.

Cary Grace: AMN Healthcare is a workforce solutions company, and our mission of empowering the future of care is aligned with the continued transformation in healthcare around how and where healthcare is delivered. Each of these settings needs highly skilled, credentialed, and caring clinicians and supportive people to deliver care and care for patients. With our workforce technology solutions and global network of clinicians, we can make sure that happens across settings, geographies, and situations. The transition to home healthcare and outpatient venues is another opportunity for us to evolve as our clients evolve but does not change the fundamentals of what we do.

How has the increase in private equity coming into the healthcare market impacted the industry and how it provides care? 

Coleman Moore: Private equity is bringing an increased amount of new capital to healthcare providers, helping to introduce innovative ways to deliver care and bend the cost curve, which are benefits. However, the traditional private equity model also focuses on profit generation, reducing expenses and improving margins which could result in higher costs for patients over the long term.

James Springfield: There’s been a stealthy influx of private equity firms in the market, and these companies don’t always advertise their ownership. These firms are amassing high market shares in local physician practices, and Texas even has the most private equity-owned hospitals in the U.S. While private equity has added capital for innovation and expansion, it unfortunately also introduces profit motives, which can drive-up healthcare costs while overshadowing better health outcomes and patient safety. As a member-owned organization, we stand for affordable, quality care for our members so there needs to be increased attention to the competition impacts of private equity.

Cary Grace: Private equity has driven new investments broadly across the healthcare industry, both in where care is provided and how care is provided. The successful investments have driven innovation and efficiency while keeping patient care and quality outcomes at the center. In a world of limited supply of healthcare professionals, a proliferating number of entities are competing for a limited group of workers, potentially affecting turnover and worker volatility in the future.

James C. Scoggin, Jr.: The impact of private equity on how the industry provides care is evolving and something to be monitored carefully. Healthcare is complicated, capital and labor intensive, and relational. The requirement for higher and more rapid investor financial returns can be underestimated and consequently detrimental.

What are the most serious risks facing healthcare systems and providers?

Coleman Moore: Data theft and cyber breaches rank very high on that list. Between January and the first week of March 2024, there were 116 healthcare data breaches impacting more than13 million Americans.* Education starts with the workforce, making sure employees don’t accidentally click on a link or fall for a phishing scam. Also, digital transformation offers long-term strategies to help healthcare providers avoid these risks, which includes improving payments technologies and better managing refunds to patients and insurers. Working with a banking institution focused on healthcare means you have a partner to help analyze risk and drive value. *Bailey, Victoria (2024, March 14). Healthcare data breaches are piling up 3 months into the year. (https://healthitsecurity.com/news/healthcare-data-breaches-are-piling-up-3-months-into-the-year)

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