Taking the status quo for granted was a luxury of the past; the fallout of the 2020 pandemic is likely to ensure that both health care providers and purchasers will not make the same mistake again any time soon. (Image: Shutterstock)
A new report from PWC Health Research Institute (HRI) outlining issues for the health care industry in 2021 finds many challenges to the provider side of the industry; and it outlines changes coming in areas such as supply chains at industry forecasting as well.
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Part one of this series noted that the HRI surveys of health care consumers, providers, and industry leaders showed a substantial growth of virtual health care during the COVID-19 pandemic. Although the growth of online visits is a big story for consumers, other parts of the industry are rapidly changing as well.
The other technology consumer: providers
With the explosion of digital solutions for health care delivery, one crucial group is often overlooked—providers. The PWC report noted that system executives recognize the problem of helping providers adapt to new platforms and models of care.
"Nearly all respondents to HRI's survey—94% of provider executives, 92% of life sciences executives and 91% of health plan executives—said improving the clinician experience is a priority for their organizations as they enter 2021," the report said.
The report noted that relief of administrative burdens for providers may be another priority in the near future. For example, the Centers for Medicare and Medicaid Services (CMS) relaxed several administrative requirements as the pandemic took hold. There are cases where insurance carriers have streamlined claims processing and prior authorizations. In addition, there are signs that interaction between pharmaceutical companies and providers may become more efficient with the use of virtual meetings.
One issue for providers during the pandemic was a significant drop in income: office visits were cut sharply during stay-at-home orders, and concerns about the virus resulted in big reductions of elective and non-critical procedures. The future may see more emphasis on developing other models of care and keeping referrals in-house. More cooperation between providers and health systems may be another outcome.
"COVID-19 has worsened the financial outlook for many health care providers, who are already pressured to manage costs. At the same time, the pandemic has accelerated consumers' introduction to and use of alternative health care settings such as retail and urgent care clinics, according to HRI's consumer survey," the report said. "Health systems are starting to think more strategically about how they build alliances and improve relationships with independent physicians to compete. HRI expects health systems in 2021 to improve physician relationships by using digital technology to help manage and grow referrals to the organization and prevent leakage from their physician networks. The global referral management technology and consulting market is expected to grow from $2.6 billion in 2019 to $11.3 billion in 2027."
Work on vaccines reveals shortcomings of supply chains
Operation Warp Speed—the effort to rapidly develop a vaccine for COVID-19—was one of several developments that have revealed health care supply chain issues in the past year.
"The challenges plaguing the medical products supply chain—lack of geographic diversity, limited numbers of suppliers for essential medicines, inability to predict demand surges, and limited purchasing power of small and midsize health systems—existed before the COVID-19 pandemic but have been exacerbated by the crisis," the report said. "Furthermore, the fragility of the supply chain has only increased based on the stress the crisis has placed on its suppliers."
Trade wars, natural disasters, or other disruptions could take a toll on supply chains for US consumers in the future, the report added, since a significant percentage of the US supply of drugs and medical devices comes from countries such as China and India. Early in the pandemic, shortages of personal protective equipment led to markups that could be as much as 200% for gowns and 6,000% for N95 masks.
"In 2021, HRI expects distributors and health systems to consider establishing contracts with secondary suppliers, joining new group purchasing organizations, relocating facilities and approaching storage and distribution on a more regional scale," the report said. "According to HRI's executive survey, 94% of life sciences executives and 86% of provider executives said that improving their supply chain overall was a priority in 2021."
Taking the status quo for granted was a luxury of the past; the fallout of the 2020 pandemic is likely to ensure that both health care providers and purchasers will not make the same mistake again any time soon.
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