Beyond the Hospital: Shifting Points of Care

A look at the driving factors behind the shifting points of care beyond the hospital walls.

The driving factors behind the shifts.

The healthcare landscape continues to evolve. One key area where the change has been evident is through the shift in points of care out of the hospital to lower-cost settings. This is happening through several mechanisms. From vertical integration to the rise in consumerism and more – let’s review some of the driving factors behind this shift and the impact of each of them.

Vertical Integration

Vertical integration is when organizations acquire or integrate with other organizations offering different levels of care, services, or functions such as hospital ownership of physician practices.¹

“Specific to the healthcare value chain, vertical integration has given payers more control over healthcare costs and has better positioned them to link directly with providers and negotiate value-based contracts.”

We’ve seen the following as a result:

The acceleration of value-based arrangements and insurer partnerships to curb health spending on reimbursements
A growing payer focus on increasing ambulatory and virtual care services to cut costs while meeting patient needs
Many large, national payers moving formulary management in-house and deploying PBMs mainly for channel management services

White, Brown, and Clear Bagging

There is a growing shift from traditional “buy-and-bill” to payer-directed access specialty pharmacies and the practices of white bagging, clear bagging, and brown bagging. The surge of each of these has become a growing concern for health systems. Specifically, over the course of the pandemic, white and brown bagging have increased due to patients and providers turning to home infusion² to keep individuals with compromised immune systems away from the hospital, which could lead to potential negative economic and reimbursement impacts on hospitals over time. A Vizient survey revealed that U.S. hospitals spend an estimated additional $310M annually in labor (e.g. clinical, operational, logistics and patient care) and an estimated additional $114M annually to oversee the coordination of patient and provider needs on the management of white and brown bagging. This doesn’t appear to be slowing anytime soon, but there are a few actions health systems can take to continue to support patients across the continuum of care.

Home Healthcare

The home healthcare services market is steadily increasing. A report by Grand View Research, Inc. predicted that the global home healthcare market size is expected to reach $545.1 billion by 2028. Payers are incentivizing providers to find lower-cost care sites. In fact, 95% of payers agree that treating members at home is often more cost-effective in the long term than treating in a facility. The combination of a growing 65+, Medicare-eligible population and shift towards value-based care for Medicare reimbursement is contributing to its popularity.

Here’s what we know about consumer preferences:

The COVID-19 pandemic and new remote care delivery technologies have accelerated the shift to health at home – for preventive care, routine care at home for younger consumers and aging, recovery and palliative care, and services for older adults.
62% of individuals cite “comfort” as the top appeal of receiving healthcare at home, while 51% say staying away from public places during the COVID-19 pandemic is their top reason for healthcare at home.

Consumerism

From accelerated adoption and use of virtual health channels to the growth in the use of technology and health monitoring tools, consumerism in healthcare is on the rise. 92% of healthcare executives worldwide said they believe their organization’s ability to generate business value will increasingly depend on the power of its technology architecture, according to a Deloitte 2021 Report.³ And consumers agree. A recent survey revealed that more than half (51%) of everyone surveyed used the internet to find and select a new primary care provider. They are more than twice as likely to use digital sources than a doctor’s referral to choose a primary care doctor. What does this mean for health systems?

The survey revealed that hospital or health system sites were one of the top three sources consumers look to, along with search engines and insurance websites. There’s an opportunity to use existing platforms and create new ones to meet the consumer’s demand for convenience and accommodate customers at home. Some of those opportunities lie within redefined care delivery (e.g., continuous clinical monitoring), a digital patient experience, enhanced talent development (e.g., using AI to maximize caregivers time), and operational efficiencies through technology (e.g. digital supply chains, automation), among others. The pandemic has accelerated the digital transformation efforts of US health systems, which in turn, is paving the way for smart hospitals across the country.

Learn how we work with health systems to help them achieve more.

¹https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6978994/#B4
²https://www.drugchannels.net/2020/09/specialty-pharmacy-keeps-disrupting-buy.html
³https://www2.deloitte.com/us/en/insights/industry/health-care/consumer-health-trends.html

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