Healthcare 2025: Innovation-fueled growth in health IT a global and sustained trend
If John McDaniel appears tired, please forgive him. He’s also behind on returning his e-mails (and don’t even mention the projects piling up at home). John’s life is emblematic of the stretched-thin state many health IT executives find themselves in today – and there doesn’t appear to be any let-up for these busy folks anytime soon. John is Vice President of the HCI Group (HIMSS’16 booth #6832), a global leader in strategic advisory services and EMR implementation, training and support, and he and HCI are riding a wave of worldwide health IT innovation and expansion that has yet to crest.
Surge in domestic health IT growth
In a study recently released by HIMSS Analytics, 18 health technologies poised for significant growth were examined (Health IT News, August 25, 2015). “By now, everyone’s got an EMR. And most providers are also making use of ancillary technologies to help harness patient data toward more efficient care and better outcomes. But many species of health IT are still surprisingly underused in the U.S. hospital market”, says Matt Schuchardt, Director of Market Intelligence Solutions Sales at HIMSS Analytics. “While the EMR market itself is pretty saturated, and usage has really improved since the HITECH Act, the challenge for hospitals and health systems is, now that you have all this data, what do you do with it?” The technologies HIMSS analytics identified, data warehousing alone is poised to achieve an eye-popping 500 percent growth in the coming year in the United States. Explaining the drivers behind such growth, Schuchardt reminded readers that an EMR is a series of components, “with a clinical data repository being the hub of that spoke”. But in its most basic form that only means the data inside that system – “it’s not all of the external data that’s available – pay data, etc. You need all of that to really start doing BI.” That’s a massive amount of data that needs a place to live and a means with which to be fed into clinical and business intelligence platforms. And that’s saying nothing of all the new data sources [such as remote monitoring devices] emerging onto the scene.
Global health IT demand increasing, too
The HCI Group, with headquarters in Jacksonville, Florida and London, is a frequent HIMSS event sponsor at the chapter, national and international level, and has seen its revenues increase from $60M US in 2014 year to in excess of $100M last year. Much of that growth has been attributed to both work with EMR customers, in the United States but increasingly with clients overseas. Many studies have born this out as a larger trend. In its 2015 Global HealthCare Outlook study, Deloitte stated “The most rapid growth worldwide is expected to be in the Middle East and Africa, which could see an annual average increase of 8.7 percent over 2014-2018 (as opposed to 4.9 percent for North America) — due, in part, to population growth and efforts to expand access to care.”
The growth we are seeing internationally in health innovation and HIT acquisition is a reflection of the changes taking place in the U.S. healthcare ecosystem. During his more than 35 years of experience as a healthcare CIO, consulting services executive and as an executive with large healthcare solution companies, John McDaniel has seen a lot of trends, but nothing more significant or disruptive as the changes taking place now/post HITECH Act. There’s a number of factors that are influencing the change process or the transformation process in healthcare, according to McDaniel, including regulatory reform (e.g. ACA) and technological advancements (e.g. genomics). Here are his top 3:
1. Payment reimbursement: If you look at what’s happening in the industry today obviously the commitment to payment or reimbursement around the quality of services versus the number of individuals you see is one of the major factors that’s going to force change or transformation within the industry.
2. Accountable Care Organizations: Secondly, as you look at organizations starting to come together in an Accountable Care Organization or an ACO framework and going at risk, meaning they’re really taking on the risk of managing the healthcare of the individual as both the provider and the payer, when you undertake risk the focus is going to be on “Let’s keep the individual much healthier so that they, hopefully, never become a patient because I make more money then”.
3. Mergers and acquisitions: Thirdly, is the whole mergers and acquisition process that’s taking place today within the industry where you look at there’s roughly 5,400 hospitals in the future, I think a number of industry pundits, including me, see that number being in the 500 range within 10 years.
HCI has produced a video interview of McDaniel where he explains the “Healthcare 2025” vision. Below, John details more of his thoughts on the future of healthcare, and the steps providers can take to stay on the right side of the innovation curve.
A Q&A with HCI Group Vice President for Innovation, John McDaniel
Stevens: John, you are Vice President for Innovation at the HCI Group, a leading and global advisory services and EMR implementation firm. Why would a company like HCI have a VP of Innovation, and how does your background lend itself to your work?
McDaniel: The HCI Group is committed to providing innovative and creative advice to healthcare executives. The rapid growth of The HCI Group over the past 6 years was largely due to providing highly qualified resources to assist clients implement EMR’s to meet MU requirements. However as the industry begins to focus on new challenges associated with mergers/acquisitions, payment reform, organizational restructuring and digital health technologies, senior management made a strategic decision to develop a world class advisory services group to assist and advise healthcare executives on alternatives courses of action to meet current and future challenges facing our industry.
I have been in the healthcare industry for over 40 years as an executive consultant, CIO, executive management advising both healthcare and technology organizations regarding innovation, organization development, mergers/acquisitions and strategic planning.
Stevens: You have presented now dozens of time in the United States and abroad around the theme “Healthcare 2025”. Why did you pick that date, and what is it about the future of healthcare which should excite and concern us?
McDaniel: The year 2025 was chosen because of the time required to transform to new models of care using digital health technologies and restructuring organizations to support a new more proactive healthcare management process. The concept is based on managing the health of a patient and triaging the individual to the appropriate care site when needed.
The model focuses on empowering the individual in the care process by engaging them in a proactive manner to coach and advice based on using virtual health technologies, healthcare analytics and cognitive computing tools. Models using virtual care or tele-health technologies have shown huge improvement if customer satisfaction, reducing healthcare cost and improving access to needed care.
Stevens: In Healthcare 2025, you explore challenges facing providers in the future. Can you expand on those here? And what can and are providers doing to leverage their own innovation initiatives to commercialize and/or monetize them to support their bottom line?
McDaniel: As healthcare moves to a more “at risk” model through government programs, health plans and other alternatives to managing care the challenges are monumental. In my opinion the key challenge is that healthcare executives need to become more entrepreneurs focusing on innovative approaches to run healthcare systems. I also expect that the healthcare industry will significantly consolidate in the coming years. I have played around with a predictive model using key attributes to identify the healthcare organizations that prosper through acquisition/merger in the next 10 years. The model to-date has been relatively accurate in that the organizations predicted to prosper are moving aggressively to acquire/merge with target organizations.
I am working with a number of organizations to create innovation centers. The focus is to solicit ideas and participation from patients, employees, companies with solutions that solves similar challenges/needs from other industries and start-up healthcare technology companies. The plan is that as new processes and solutions are developed in their innovation labs/centers, they can be quickly moved into the health system with greater acceptance and at a lower cost. Several of my clients are taking equity ownership in new solutions developed in their centers.
Stevens: Can you give us a case study on innovation being successfully applied at a provider? And how about a cautionary tale, as well?
McDaniel: The best known organization that has excelled at developing innovative solutions and commercializing them is UPMC (University of Pittsburgh Medical Center). However I have other clients are quickly moving toward commercializing new solutions and technologies for additive manufacturing (3D printing), cognitive computing, personal healthcare (wearables) and virtual health solutions.
Stevens: What advice would you give a provider who wants to get out ahead of innovation?
McDaniel: There are several steps I recommend to clients: one is to hire a Chief Innovation Officer responsible for innovation; second is to establish an innovation council which should include physicians, administrators, nurses and most importantly patients; and third, develop a process to solicit, evaluate and recommend innovation projects.