Disruptive trends impacting the healthcare industry...

February, 2019
Dr. Nick Horney & Dr. George Hallenbeck
Disruptive Trends Impacting the Healthcare
Industry and Their Implications for Talent
RUPTTM
Report for Healthcare

©2019 Center for Creative Leadership & Agility Consulting and Training, LLC. All Rights Reserved.2
With the healthcare marketplace transforming to a value-based reimbursement model, healthcare
organizations are aiming for efficiency, cost control and sustainability by rethinking their strategy
and reallocating capital and resources toward future business models, either through investments
in technology or different care delivery models.
Turbulent disruptions are occurring, not only in regulations but also in four other significant areas:
technology (artificial intelligence, machine learning and cybersecurity), consumer-related (rapidly
rising consumer expectations and the digital consumer), society-related (society is grappling with
an opioid crisis) and industry-related changes (value-based pricing, mergers and acquisitions
(M&As), and specialty drug pricing and supply chain disruption).
These disruptions are breaking existing silos and redefining the basis of competition. In an
industry rife with continued disruption, companies will need to become more agile in order to
take advantage of critical growth opportunities or risk falling behind as competitors bolster their
positions and reshape the healthcare value chain.
The agility of your talent portfolio and hence ability to adapt and thrive in the face of continuous
disruptions in the business environment is dependent on your organization’s talent portfolio
agility mindset, process and people.
Executive Summary

©2019 Center for Creative Leadership & Agility Consulting and Training, LLC. All Rights Reserved. 3
Disruption cannot be avoided, but it becomes more manageable when it can be understood. We have framed
the forces of disruption into a single model, which we call the RUPT model. RUPT is an acronym that captures
the nature and impact of the turbulence and upheavals we experience in the 21st century: Rapid, Unpredictable,
Paradoxical and Tangled. Taken together, they have the power to disrupt, interrupt and even corrupt.
Disruption comes in many forms and from many places. We’ve identified four meta-forces that are most often the
source for disruption: Technology, Consumer, Industry and Global/Societal. Based on a thorough market analysis
conducted by industry experts, we’ve captured specific disruptions that pertain to healthcare in each of the meta-
force categories. For each disruption, we provide a brief overview of what it is and why it’s important with relevant
facts and case examples. We then highlight potential implications associated with the disruption.
We see agility as an important antidote to disruption. In a veritable sea of disruption, you need to roll with the
waves and possibly even surf them to shore. If you stubbornly stick to how you’ve done things, you’ll surely
get knocked off course and maybe even capsize. Specifically, we highlight the importance of agility in how the
organization manages its most valuable resource: its talent. For each disruption, we’ve also highlighted implications
for how the organization needs to be agile in its approach to talent. These implications are presented through three
different lenses: Talent Mindset, Talent Processes and People (Talent).
About This Report
© 2018 Center for Creative Leadership. All Rights Reserved. CVD: 08022018
Agility in a RUPT World
TEAM
Agile
People
Rapid
Paradoxical
Unpredictable
Tangled
Technology
• AI & Machine
Learning
• Healthcare
Cybersecurity
Consumer
• The Consumer Experience
• The Rise of the Digital
Health Consumer
Industry
• Value-based Reimbursement
• Specialty Drugs Pricing
• Healthcare Integration
• Supply Chain Disruption
Global/Societal
• The Opioid Crisis
• Legislative and Regulatory
Changes in Healthcare

This report will be a valuable source of input in our approach to working with you
to reframe how you think about and manage your talent as a key strategic resource
and one of your most important assets in battling disruption. We also encourage you
to apply the information regarding the disruptions and their implications to promote
readiness and agility in other key areas of your organization’s operations.

Table of Contents
Consumer-Related Disruptions
1. The Consumer Experience 7
2. The Rise of the Digital Health Consumer 11
Technological Disruptions
3. AI and Machine Learning 17
4. Healthcare Cybersecurity 19
Industry-Related Disruptions
5. Value-Based Reimbursement 25
6. Specialty Drugs Pricing 28
7. Healthcare Integration between Insurers and Providers 30
8. Supply Chain Disruption (Healthcare Middlemen) 33
Societal Disruptions
9. The Opioid Crisis 39
10. Legislative and Regulatory Changes in Healthcare 42

Consumer-Related
Disruptions

1. The Consumer Experience
Today, when you create a superior digital consumer experience in healthcare, you drive everything from brand
awareness to patient acquisition to consumer engagement to loyalty. Consumer experience has become a
growing priority in the last decade for a number of reasons, namely policy, leadership choice and implications
for reimbursements. Healthcare companies now understand that consumers (on both sides of the care equation)
are not just passive participants in a transaction. They are, in fact, partners in the healthcare experience and must
be treated as such. Acknowledging what matters to them and personalizing the solution to suit them have now
become increasingly important for continued loyalty. The experiences that consumers have in healthcare are very
important to them, and companies need to recognize this. Consumer experience is and will continue to drive
outcomes such as consumer satisfaction, trust, loyalty and retention as well as impact costs.
Research by Gartner shows that consumers regard healthcare as an outlier of inefficiency, inconvenience and
condescension. However, firms are finally waking up to the importance of consumer experience, and 61 percent of
U.S. integrated delivery systems (IDSs) now have a senior executive specifically charged with accountability for the
patient experience.
The experiences that consumers have in healthcare - positive or negative- influence their future decisions when
navigating the healthcare system and their personal health. These decisions are powerful determinants of health
outcomes and medical costs.
“The future of experience in healthcare
demands an ecosystem of entities that
align their business models with consumer
goals through a shared commitment
to collaboration, interoperability and
consumer empowerment.”
Gartner 2017

In a survey conducted in early 2018 by The Beryl Institute, in conjunction with research partner SMG Catalyst and
corporate partner Studer Group, less than 10 percent of healthcare consumers suggested that experience was
only somewhat important or less. 32 percent of respondents believed patient experience was very important, and
overwhelmingly 59 percent of respondents believed patient experience to be extremely important.
When consumers were asked “Why is having a good patient experience important to you?,” the overwhelming
reasons were primarily about an individual’s health. In fact, the top identified item, “my health and wellbeing are
important to me,” far outscored other items. This data point in itself reinforces how consumers view the healthcare
experience. It is personal, and it is important. The top three items selected overall also showed how patient
experience contributes to healing and health outcomes.
59%
believe
the patient
experience
is extremely
important
Less than
10%
32%
believe
the patient
experience
is very
important
believe the patient
experience is
only somewhat
important

©2019 Center for Creative Leadership & Agility Consulting and Training, LLC. All Rights Reserved. 99©2018 Center for Creative Leadership. All Rights Reserved.
Source: The Beryl Institute
78%
72%
69%
68%
65%
51%
45%
38%
35%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
My health and well-being are important to me
I want to know that my physical needs are being taken seriously
Good PX contributes to my healing/good healthcare outcomes
I want/deserve to be treated with respect
I want to be addressed as a person, not as a symptom…
It will influence how I make healthcare decisions in the future
My time matters
I am spending my money on this
I see myself as a customer
Why patient experience (PX) is important

Apple is intending to open health
clinics, Google is exploring Medicaid
and Uber has a desire to disrupt
ambulance services. They plan to
create “new customer experiences”
rather than new products or
services.
Implications
A) Patient
empowerment
B) Sharing of
information
C) Improve the patient–user
experience at every touch point
• Throughout the course
of the patient–provider
relationship, patients can
develop their sense of
empowerment through
their own education
as well as provider
encouragement. By
equipping patients with
vital skills and resources
pertinent to their
conditions, providers drive
patient self-management.
• Both patients and providers
need to have the pertinent
information to provide the
best patient experience.
• Patient expectations about
the power of digital health
records are well ahead of
the ability of healthcare
providers to keep up,
according to a new survey.
A vast majority of patients
believe it is important for
any health institution,
regardless of type or
location, to have access to
their full medical history in
order to deliver high-quality
care.
• Consumers today expect a seamless and
real-time experience on all transaction
touch points, and the healthcare industry
is no exception. This provides a huge
opportunity for providers to deliver
personalized value at every touch point of
interaction with the consumer.
• In an industry that is already facing
increasing pricing pressure and
uncertainty, new entrants including
technology brands such as Amazon,
Apple, Google and Uber have already
shown interest in reinventing healthcare.
• These four potentially disruptive giants
have access to vast stores of customer
data as well as the technological prowess
to be big threats. Amazon is the biggest
threat with its particularly relevant
technological prowess and disruptive
innovation experience.

2. Rise of the Digital Health Consumer
Digital health consumers are emerging as a very important segment within the consumer market and increasingly
buying more health products online. According to Euromonitor International, 45 percent of the global population
uses the Internet as of 2017, and the number is projected to increase to 76 percent by 2030. This connectivity is
accelerating the rise of the digital health consumer. This increasingly tech savvy segment is tracking their health
and fitness online through wearable devices and doing most of their purchasing for consumer health products
like vitamins and dietary supplements (VDS) online. Prescription orders for pickup and delivery are through apps,
and consumers expect consumer health firms to understand their health needs quickly and offer personalized
healthcare solutions.
This consumer is adopting new ways to research health products and services online (especially through their
smartphones) and assuming responsibility for their health through digital health tools. Since they are sharing so
much information about their health, preferences and personal data online, they expect healthcare companies to
understand them and tailor offerings to their personal specifications.
45% of the global population uses the
Internet as of 2017, and the number
is projected to increase to 76% by
2030
(Euromonitor International)
Delivering on
health and
service
promises
Faster
service
With a
flawless
experience
At the right
time
Tailored
messages
related to
consumers’
health

Social
Media
Health
Apps
Voice-Enabled
Commerce
Digital
Pharmacy
Health and Fitness
Micro-Influencers
Source: Euromonitor
Implications
A) Increase volume and
customer retention by
investing in digital services
B) Shift to a more connected
ecosystem to improve
treatment outcomes
C) Find new ways of
delivering value
• Nearly 2 out of 3 patients will
choose their provider based
on a strong online presence,
according to Doctor.com.
• These consumers rely heavily
on the web to make decisions
at every stage of the healthcare
journey including search (80
percent), comparison (67
percent), trust (nearly 60
percent) and scheduling (45
percent).
• Making substantial investments
in reinforcing their online
presence could help providers
increase customer volume as
well as retention.
• Not all healthcare data is
integrated and available to
clinicians to deliver deeper
insights and improved quality of
care.
• Healthcare firms need to be able
to link personal, clinical, financial
and environmental data to truly
realize the potential of this data
in developing personalized care
plans.
• A cross-functional, team-
based approach combined
with investing in an efficient
healthcare analytics system will
allow them to leverage this data
to improve efficiencies and drive
competitive advantage.
• The healthcare sector has begun
to follow the retail sector in
providing convenient digital
tools that take caregiving out of
the traditional hospital setting.
• In order to remain competitive,
healthcare companies will
need to develop new ways
to offer value through retail
clinics, telemedicine, remote
health monitoring and home
healthcare.

Consumer-Related Disruptions – Implications
and Considerations for Talent Portfolio Agility
As access to data and technology has transformed the consumer experience in other realms of
daily life such as transportation and shopping, the expectations for a similar transformation to
occur in healthcare are surging, maybe to the point that they are unrealistic compared to what
healthcare entities are capable of delivering in the near term. Patience, trust and a willingness
to share responsibility will be required to forge a new patient–provider relationship. As the role
of healthcare in the consumer experience evolves, so will notions of who should be involved at
what touchpoints along the patient journey and what skills will be required to create successful
outcomes.
Considering the disruptions highlighted in this section, here are some potential implications for
the organization’s talent portfolio.
Talent Mindset
Nimbleness and ingenuity will be required to quickly prioritize and address the rapidly evolving needs and expectations of
patients. Talent will need to shift to “where the action is” to satisfy current patients needs before the competition comes
up with a better alternative. On the other hand, lest the organization get caught up in a never-ending game of “whack-a-
mole” with addressing patients latest pain points, focus and discipline will also be required in terms of how the organization
assembles and deploys its talent.
Here are some specific aspects of talent mindset to take into consideration:
• With so many gaps likely to exist between what patients expect and what the organization is capable of delivering, how
does the organization avoid spreading its resources too thinly in an effort to solve them?
• To enable the sharing of patient information in a safe, efficient and effective manner, how should investments be divvied
up across human sources of talent and technology-driven talent? When and where must people be involved, and when
can technology take the lead role?
• As more power shifts to the patient, what responsibilities are no longer placed on employees? What responsibilities
potentially take their place?

Talent Process
Do you have the agile talent processes needed to address changing patient expectations and behaviors? How well do your
talent processes demonstrate the needed agility to anticipate and/or respond to patient shifts?
Here are some specific aspects of the talent process to take into consideration:
• How do you ensure that you acquire talent that possesses the design thinking skills needed to help shape the patient
experience?
• What performance management processes are in place to reward/recognize patient/consumer relationship management?
What key performance indicators (KPI) and KPI improvement targets should be developed to measure and reward
improved patient experience at each “moment of truth” between patient and employee?
• How do you develop and reinforce customer-centric skills such as empathy and listening for all talent, even those not in
direct patient-facing roles, so that a customer-driven culture can take root?
• As the organization strives to fulfill the increased expectations surrounding the patient experience and maintain customer
engagement levels, how too can it strive to do the same on behalf of employees? To what extent does delivering a world-
class employee experience support the delivery of a world-class patient experience?
• As the free flow of interconnected data plays an increasingly important role in shaping the patient experience, how can
the organization leverage the reams of data it possesses with regards to its own talent?

People
How agile are the people in your organization to deal with the implications of the changing patient experience? As their role
relative to the patient transforms, how do they shift what they do and how they do it to still deliver value and also maintain
their identity as caregivers?
Here are some important aspects of your organization’s people to take into consideration:
• As the patient/consumer becomes increasingly empowered, how does the organization’s talent reconcile a perceived or
real shift in power from them to the consumer?
• If your organization lacks the funding or tech-savvy of high-tech disruptors such as Amazon, Apple and Google, how does
it differentiate with the skills that you have in your current talent pool? What skill gaps need to be closed? What reskilling
efforts might be required?
• How do individuals develop the capacity to deliver a world-class experience and superior value to a patient they might
never encounter directly?
• How does the organization reconsider its patients/consumers as a source of talent? How can they be leveraged in new or
better ways to function as advocates, influencers and collaborative problem-solvers?

Technological
Disruptions

3. AI and Machine Learning
AI and Machine learning are disrupting the healthcare industry by transforming the way care is delivered, and their
impact is steadily increasing. AI and machine learning are deploying clinical services as well as facilitating faster
workflows and processes.
A new report from Markets and Markets predicts the healthcare artificial intelligence sector to be valued at 7.98
billion in 2022, accelerating at a wild compound annual growth rate (CAGR) of 52.68 percent over the forecast
period.
Machine learning giants Google, IBM and Microsoft are developing and refining the deep learning techniques that
are already being applied to pathology, predictive analytics and precision cancer care. Machine learning, also known
as cognitive computing, deep learning and semantic computing, happens when computers are “taught” to analyze
extremely large, dense or detailed data using algorithms that can absorb previous outcome data to inform future
results. Deep learning helps to analyze, sort and find patterns across huge reams of data.
A study by McKinsey (July 2018) predicts that payers and providers could reduce fraud, waste and abuse (FWA) by
$20–30 billion from the U.S. healthcare value chain by implementing machine learning.
Healthcare organizations need to start preparing themselves for a world driven by increasingly advanced machine
intelligence. With both the widespread adoption of AI and machine learning and the increasing prevalence of data-
gathering medical devices, such solutions are currently under investigation by industry players such as IBM and
could soon be commonplace within healthcare institutions and facilities.
A recent application of deep learning, the RightEye GeoPref Autism Test can identify the early stages of autism
in infants as young as 12 months – the crucial stages where early intervention can make a big difference. The
technology uses infrared sensors to test the children’s eye movement as they watch a split-screen video: one
side fills with people and faces, the other with moving geometric shapes. Children at that age should be much
more attracted to faces than abstract objects, so the amount of time they look at each screen can indicate
where on the autism spectrum a child might fall.
(Wired.com 2017)

Implications
B) Machine learning in clinical trialsA) Machine learning to provide
precision medicine
• In the future, machine learning technologies could
be closely linked to clinical research trials as they
could provide several benefits including identifying
ideal candidate groups based on factors such
as genetics. This would result in substantial cost
savings both financially and in terms of clinical
resources. Machine learning could also result in
smaller, quicker and less expensive trials overall.
According to McKinsey, there are many other
machine learning applications for helping increase
clinical trial efficiency, including finding best
sample sizes for increased efficiency, addressing
and adapting to differences in sites for patient
recruitment and using electronic medical records
(EMRs) to reduce data errors (duplicate entry, for
example).
• Machine learning technologies can be used
to interpret the high volumes of patient data
collected by Internet of Things (IoT) and healthcare
devices and then use these interpretations to
predict conditions or suggest treatments.
• Computers can be taught to identify the subtle
patterns that indicate the beginnings of a disease
based on previous test results of patients.
Repetitive data collection can further enhance the
accuracy rate and improve diagnostic abilities to
predict health outcomes. Machine learning can
also be used for population health management,
understanding the relationship between specific
therapies and their outcomes, or matching
socioeconomic and community factors with the
likelihood of a patient experiencing a health event.
• Although machine learning can generate value
through greater physician decision-making
and improved efficiencies, it will require expert
monitoring as well as investments in data
infrastructure to be effective.

4. Healthcare Cybersecurity
Healthcare cybersecurity will be one of the top 10 challenges facing healthcare executives next year, according
to a new poll by the Healthcare Executive Group (HCEG). All the stakeholders including CISOs, CIOs, healthcare
providers, patients and caregivers, EMR vendors and healthcare innovators need to work together to address
growing cybersecurity threats to patient data and ensure privacy and security of healthcare consumer information.
According to a report by College of Healthcare Information Management Executives (CHIME) more than 60 percent
of healthcare IT (HCIT) executives lack confidence that their current medical device security strategy protects
patient safety and prevents disruptions in care. The report found that there were around 10,000 connected medical
devices per organization, and approximately one third of those devices were unpatched.
Safeguarding medical devices poses a lot of security problems with firms struggling with out-of-date operating
systems or the inability to patch devices, which are major security risks. IoT-connected devices have become a
mainstream part of our lives, especially in healthcare. Gartner predicts that nearly 20 billion IoT-connected devices
will be online by 2020.
An August 2017 hacking attack lead to the recall of 500,000 pacemakers by the U.S. Food and Drug Administration
(FDA) due to fears that their lax cybersecurity could be hacked to run the batteries down or even alter the patient’s
heartbeat. While these devices are undoubtedly improving our lives in many ways, securing this massive number of
devices will represent one of healthcare’s biggest challenges in 2018.
Another threat, healthcare ransomware, is malware that typically prevents organizations from accessing critical
systems, such as EMRs, unless they pay a certain amount of money. Numerous hospitals and healthcare information
systems, including the National Health Service (NHS), were impacted by the WannaCry ransomware attack in 2017.
This causes major problems for an organization’s hospital data security.

Phishing emails that bypass technology, are malicious and cause data breaches and financial loss are another major
threat for healthcare organizations.
The healthcare industry is an attractive
target for phishing campaigns because
few industries collect more lucrative
personal data: name, Social Security
number, email address, home
address, date of birth and usually
one or more credit card numbers.
Cofense 2018
The term “payment notification” is the top healthcare phishing attack subject, appearing in 58 percent
of healthcare phishing attack campaigns in 2018, according to the latest data from Cofense. Healthcare
organizations should train employees on how to spot and avoid phishing emails, adopt best practices and deploy
appropriate technology to lessen the chances that a phishing attack will succeed.
Moving forward, healthcare cybersecurity issues including patient privacy, healthcare data security and
preventing ransomware will continue to be top concerns for the healthcare industry.

©2019 Center for Creative Leadership & Agility Consulting and Training, LLC. All Rights Reserved. 2121©2018 Center for Creative Leadership. All Rights Reserved.
Implications
B) Training C) Increased
collaboration between
device manufacturers
and healthcare delivery
organizations (HDOs)
A) Focus on cybersecurity best
practices
• As the types of healthcare
cybersecurity issues are likely
to evolve along with new
technologies, organizations
must regularly train
employees and update their
systems.
• Employee training will be
essential in identifying
malicious emails and
preventing phishing attempts
and hospital ransomware
attacks. Staff members at all
levels need to be trained to
identify and report suspicious
emails, and be aware of
suspicious links. They should
also be trained in how to
respond if their networks are
breached.
• Vulnerable medical devices
are an escalating security
concern for the healthcare
industry.
• Medical device vendors
need to collaborate
with healthcare delivery
organizations to work
towards the common goal
of patient safety.
• Vendor contracts will need
to carry an assurance that
the data collected and
shared by the device is
secure.
• Security support from
these vendors will prove
invaluable in providing
an additional layer of
cybersecurity.
• Healthcare organizations are now
realizing that patient security
requires cybersecurity and are
working to fortify themselves against
a cyber epidemic.
• The number and frequency of
healthcare cybersecurity threats—
ransomware, cryptocurrency mining,
data-stealing malware, advanced
persistent threats, malicious
insiders and careless employees,
can be intimidating. Having
a comprehensive disaster recovery
plan in place will help to mitigate the
effect in case of a breach. The plan
would need to include defensive
measures and trained personnel
to implement them quickly. Fully
implementing existing technology
and investing in new technology will
be an additional line of defense.
• Healthcare organizations need
to be prepared to respond and
move forward quickly in case of a
security breach and use that in a
way to mature their organization’s
cybersecurity program.

Technological Disruptions – Implications and
Considerations for Talent Portfolio Agility
Talent Mindset
Technology disruptions can be particularly unnerving. They can arrive without warning,
spread like wildfire and be difficult to understand. They have the power to cripple your
organization, but they can also be a source of tremendous competitive advantage.
To achieve the latter and avoid the former, you need to be able to marshal the right
resources at the right time on an ongoing basis.
Considering the disruptions of AI, machine learning and healthcare cybersecurity, here
are some potential implications for the organization’s talent portfolio.
Technology brings certain change but also certain ambiguity. The impacts and how best to respond to them often
take time to sort out. The worst thing to do is do nothing and “wait it out” until the path forward is clear. Nor can the
organization risk going “all-in” on speculative solutions.
A balance needs to be struck. The organization’s approaches to talent need to provide sufficient direction so that people
and the policies and systems that govern them can take necessary steps when faced with technology disruptions, but
neither can they be so precise or restrictive that there is no ability to improvise and experiment.
Here are some specific aspects of talent mindset to take into
consideration:
• Is the organization ready for “talent” that isn’t human?
• Is the organization ready to take the talent-related risks
and false starts that come with implementing new
technology?
• A sudden technological disruption may reveal a
talent gap that wasn’t previously acknowledged, and
there may not be sufficient time to reskill or redeploy
existing resources to deal with the threat. How open/
flexible is the organization to leveraging external talent
(freelancers, consultants, service providers) to deal with sudden, urgent technology disruptions?
• Disruptions can’t be avoided, so preparedness plans are needed so your talent can respond quickly and effectively.
You need to provide sufficient guidance to deal with ambiguity but can’t be overly restrictive either. How can you
articulate policies and practices so your talent can respond immediately but also flex in the moment?

Talent Process
People
Predictive analytics and AI have come to the HR field, and the transformative effects are also being felt. Big data also
brings big risks in terms of privacy and security. How does the organization yield technology to streamline talent
processes without racking up either too much dependency or vulnerability?
Here are some specific aspects of talent processes to take into consideration:
• While advanced technologies may take center stage in the clinical setting, one of the areas that might be most
impacted by AI is talent, especially talent acquisition and performance management. Is the organization ready for
these transformations?
• How can the organization yield data and technology to streamline talent processes without drowning in data or
running afoul of privacy concerns?
• How does HR partner with IT in designing the next generation of tech-driven talent practices?
• As specific technology skills quickly rise and fall in demand, how does the organization gain access to talent pools
with “in demand” tech skills, rapidly reskill existing talent, and offload tech talent that is no longer relevant?
• How can the organization enhance and maintain the employee experience when it is always on guard for the latest
cybersecurity threat or fear of obsolescence due to AI? How can talent be empowered by technology vs. feeling
powerless in the face of it?
• How can the organization not just be vigilant to technology threats but also ready to respond effectively when they
occur? How do you ensure backup processes to enable talent systems to remain functional when “offline”?
People and technology are a tricky mix. We can pair together to do fabulous things, and technology can enrich and enhance
our personal and professional lives. It can also threaten us, making us feel insecure in a number of ways. As technology
changes rapidly, it also demands a lot of us to keep up and stay relevant.
• How can you augment/reskill your organization’s workforce so they can work side-by-side with technology-driven talent?
• Who will “manage” the machines and make sure they are being used efficiently and responsibility?
• How can you help your people maintain their engagement and identify as healthcare providers/healers as technology
plays an increasing role in patient care?
• What can people do that machines can’t/shouldn’t? What are the gaps in your current talent that need to be addressed?
• Are there critical gaps in “tech-savvy” or “tech IQ” in certain areas/levels of the organization? Is tech savvy something
you want to have as a core competency of your full-time talent or something you prefer to outsource?
• As technology gains lead to some current challenges being minimized (e.g., the application of machine learning leads
to reductions in errors, waste, fraud and abuse), where can resources be redeployed to tackle either long-neglected or
newly emerging challenges?

Industry-Related
Disruptions

5. Value-Based Reimbursement
The healthcare industry is under acute pressure to align financial incentives to value. Value-based reimbursement
ties payments for care delivery to the quality of care provided and rewards providers for both efficiency and
effectiveness. This form of reimbursement has emerged as an alternative and potential replacement for fee-for-
service reimbursement, which pays providers retrospectively for services delivered based on bill charges or annual
fee schedules.
Value-based reimbursement marks a structural shift in how patient care is provided and measured. The Economist
Intelligence Unit (EIU) defines value-based healthcare (VBHC) as “the creation and operation of a health system
that explicitly prioritizes health outcomes that matter to patients relative to the cost of achieving those outcomes.”
Value can be thought of as the health benefit for every dollar spent, although the components of what constitutes
value are becoming more complex.
This shift is challenging HDOs to reconsider how services are provided and populations of patients are taken care of,
and it requires a mobilization and coordination of complex interdependent parts with insight into cost and quality
to optimize the value.
Performance-based payment models are slowly replacing traditional fee-for-service models, and the need to shift
from volume to value is shared by payers, providers and patients. Value-based care is bending the healthcare
cost curve, reducing unnecessary medical costs 5.6 percent on average while improving care quality and patient
engagement (Change Healthcare June 2018).
Value-based delivery models, such
as bundled payments and pay for
coordination, increasingly fold into
the payment services that have been
provided across a chain of integrated
and coordinated care and measure
the value rendered across services
and the outcome achieved.
Gartner 2018

By focusing on measurable health outcomes like reducing hospital readmissions, using certified health IT and
improving preventative care, value-based care can help healthcare providers reduce cost and deliver the best
possible health outcomes to patients with the resources available.
While the case for implementing a VBHC model is gaining popularity, it will require a transition to a more patient-
oriented system. More importantly, it will require a complete reassessment and revision of age-old corporate
practices, which will be difficult and time consuming. As the adoption of value-based care arrangements steadily
grows and patients become increasingly empowered in making care decisions, companies will have to embrace
agility (organizational and innovation) in order to survive in an ever-changing business landscape.
Implications
B) Multifaceted workforceA) Innovation agility
• To remain competitive in today’s rapidly
changing healthcare environment,
organizations need to build a cross-
functional team. Recruitment of team
members with experience in public health
as well as expertise in data analytics and
business diversification strategies will be
necessary for the delivery of value-based
care.
• Bundled payments for episodes of care are an increasing
part of the shift toward value-based reimbursement that
is spreading through the healthcare sector. Episode-based
payment (or bundled payment) has been adopted by a large
number of public and private payers over the past five to
seven years because it holds the potential to achieve faster
and more consistent impact than other alternative payment
models (McKinsey March 2018).
• However, innovation agility remains a problem, with only 21
percent of payers capable of rolling out a new episode of a
care program in three to six months. Over a third of payers
need up to a year to launch a new program, 21 percent
require up to 18 months and 13 percent need up to 24
months or more–more than enough time for conditions to
change in a fast-moving healthcare market.
• With the shift toward patient-centric healthcare, companies
need to focus on implementing rigorous standards for
patient care as well as KPIs to evaluate their success at
achieving these standards.
• Having this core capability (of clinical quality) in place will
allow them to go after more innovative care delivery.

Source: Finding the Value: The State of Value-Based Care in 2018, a new national study of 120 payers conducted by
ORC International and commissioned by Change Healthcare.

6. Specialty Drugs Pricing
Specialty drugs are administered to less than 1 percent to 2 percent of the U.S. population, yet they account for 38
percent of US prescription drug costs. By the end of 2018, US specialty drug costs are expected to account for 50
percent of all US prescription drug costs (NCBI). This has emerged as a strategic issue for employers. “The largest
proportion of new medicines launched in the last five years have been specialty drugs, and specialty share of
spending has risen, while traditional net medicine spending has declined by more than $133 per person over the
past decade” ( Medicine Use and Spending in the US, IQVIA Institute).
This cost growth is driven primarily by the large number of new medicines, many of which will be specialty and
orphan drugs. Specialty drugs include treatments for AIDS, infertility, obesity and other medical conditions, but
specialty drugs for just three conditions—cancer, arthritis and multiple sclerosis—account for more than half of all
spending on specialty drugs (Biotechnology Healthcare).
As the specialty drugs sector continues to transform, FDA approval of specialty drugs will continue to rule the
pharmaceutical landscape. The FDA is introducing new initiatives designed to increase competition and moderate
drug price trends. These include encouraging new market entrants to rapidly start developing generics in classes
where there is no competition, streamlining the generic drug approval process and promoting biosimilars [The
Healthcare Leadership Council (HLC)].
Five key trends are currently shaping drug pricing decisions:
• Negotiating power of pharmaceutical companies: Increasing competition has caused insurers and pharmacy
benefit managers (PBMs) to put downward pricing pressure on the pharmaceutical companies.
• Outcome-based pricing: Outcome-based pricing has emerged as a key way to control drug costs through value-
based contracts. However, to determine if the drug produced the desired outcome, health plans and PBMs need
time as well as resources to capture and analyze an immense amount of data. Because of this, outcome based
contracts still remain relatively new. There is a growing need for new drug pricing models that are flexible and can
assess the appropriate cost of an orphan drug.
Specialty drugs for just three conditions–
cancer, arthritis and multiple sclerosis–
account for more than half of all spending
on specialty drugs

• Focused legislation: State and federal legislators have set their sights on drug pricing reform especially capping
price increases, and increasing pricing transparency.
• Increase in the rate of rare disease drug development: The largest proportion of new medicines launched in the
last five years have been specialty drugs.
• High-deductible health plan: As healthcare costs, including drug prices, kept increasing, employers were in favor
of high-deductible insurance plans, which allowed them to lower their expenditure on healthcare. This has changed
as more and more employees have protested against this.
Implications
B) Integration of medical
and pharmacy benefits
C) Improved educationA) Establish reference points
• When patients administer specialty
drugs themselves or take them orally,
the pharmacy benefit associated with
their health plan generally provides
coverage, often through the use of a
PBM.
• In contrast, when a healthcare
provider administers specialty drug
therapies, payers tend to cover the
drugs and the related therapy as
part of a medical benefit, which has
a different approach to payment
(UnitedHealthcare). The growth
in specialty pharmacy costs has
occurred mainly on the medical side.
About half of spending for specialty
drugs is funded as a pharmacy
benefit while the other half is funded
as a medical benefit, leading to
challenges in cost control. Employers
need to plan for both the medical
and pharmacy side of the benefit In
order to successfully control costs.
• Pharmaceutical pricing
for specialty drugs is a
key driver of increasing
healthcare costs.
Employers will need to
have well-trained, cross-
functional teams who are
familiar with the specialty
drug pipeline and are
better able to forecast and
manage cost trends while
balancing outcomes for
population health.
• Most employers don’t have a
clear understanding of specialty
pharmacy and don’t know how
much they spend on specialty
drugs overall.
• They will need to use available
data to determine what illnesses
or specialty drugs may be most
relevant to their organization.
• They should also ensure that all
vendors tasked with managing
pharmacy costs are able to supply
timely reports on both cost
and utilization. Reestablishing
contract guidelines will increase
efficiencies and help guide
patients to higher quality
providers.

7. Healthcare Integration between
Insurers and Providers
In the last five years, the healthcare industry has seen a trend of M&As driven by incessant pressure on
companies to lower costs and improve reimbursements. New regulations and legislations are also added to the
mix. This looks to continue with the creation of integrated full-service providers from the mergers of providers
and payers. Insurers are looking to form closer relationships with providers of lower cost medical care through
either ownership models or partnerships. Consolidations between payers and providers is rupturing traditional
practices in healthcare and blurring the lines that divide healthcare sectors.
The CVS/Aetna merger is set to disrupt the system with a retail pharmacy and e-enabled high-value provider
network. Achieving regional scale is the aim of the Advocate/Aurora merger by combining hospitals and
clinically integrated physician networks and related pharmacy capabilities. The proposed Baylor/Memorial
hospital merger is aiming for lowered healthcare costs by identifying and transferring best practices, including
ways to reduce intensive care stays or make surgeries more efficient.
The most recent mega-deals by CVS and Aetna, Humana and Kindred, Ascension Health
and Providence Health, Aurora Health Care and Advocate Health Care, as well as the
ongoing provider acquisitions by insurance goliath UnitedHealthcare, all send a clear
message: insurers, physician groups, health systems, and even retail organizations are each
seeking to compete as high value care and financing networks (HLC).

As the healthcare marketplace is transforming to a value-based reimbursement model, healthcare organizations are
aiming for efficiency, cost control and sustainability through M&As. Healthcare companies are pursuing healthcare
M&As to achieve the following:
• Attain category leadership by increasing scale within a category, therapeutic area or call point.
• Leverage an asset’s R&D capabilities: In a fragmented and constantly evolving industry, accessing innovation
through M&As can provide companies with quick access to new technologies without having to develop
them. Acquiring R&D capabilities is an effective way to build positions in emerging technologies such as gene
therapy and biosimilars.
• Cost reduction through HCIT: HCIT companies that specialize in software help improve efﬁciency.
• Access new proﬁt pools by reaching across industry sectors: The CVS Health and Aetna merger seeks to
integrate management of patients’ pharmaceutical use with management of their general health (Bain &
Company).
Source: Kindred Healthcare

Implications
A) Innovation B) Evolving regulations and
tax reforms
C) New opportunities
• The emergence of leading-edge
technology like biosimilars
and gene therapy is rapidly
advancing in the U.S. market
especially in the oncology space
where these products have the
potential to increase access and
provide lower cost alternatives
to traditional specialty drugs
used for cancer care. As these
technologies gain approval and
enter the mainstream, they
are likely to disrupt the entire
healthcare industry.
• While this will create buying
opportunities in new spaces,
it will also put pressure on
the assessments of traditional
companies.
• Tax reform means lower
corporate rates, potentially
making healthcare assets
attractive to foreign acquirers
and making the U.S. a more
attractive jurisdiction for
inbound M&A activity.
• The most likely effect is that tax
savings will boost the balance
sheets of U.S. healthcare
companies, providing more
funds for companies to
fund acquisitions and spur
consolidation in the industry.
• These new partnerships will
provide the support for the move
toward value-based care, and
have the potential to pass along
reduced healthcare costs to
patients.
• The ever-changing healthcare
landscape presents critical
growth opportunities for
dynamic companies to alter
their growth trajectory. In an
industry that is undergoing
constant disruption, companies
will need to consider M&As that
are truly transformative in order
to remodel the healthcare value
chain.
• As they design their growth
strategies, they will need a clear
idea of the healthcare segments
in which they wish to compete
as well as the strengths they will
need to establish a stronghold in
those segments. As consolidation
will require restructuring and
promoting a shared mission and
common values, it will require
healthcare companies to become
more agile.

8. Supply Chain Disruption
(Healthcare Middlemen)
Constantly increasing drug costs are a top-of-mind issue for all the stakeholders in the healthcare system including
providers, payers and patients. From a domain populated exclusively by providers and their patients, healthcare
has become a battleground for intermediaries, namely insurance companies and PBMs. With increased pressure to
lower cost, middlemen, such as PBMs and wholesalers, will have to reassert their value to avoid extinction.
The current focus on value-based care has forced providers and payers to take another look into the supply chain
to better understand the cost drivers in the value supply chain. These include the lack of transparency throughout
the drug supply chain and the role of middlemen in unnecessarily increasing costs. The high cost of specialty drugs
is further increased by price and rebate transparency issues, and the responsibility for this lies mainly with the
supply chain middlemen. For the 44 million seniors enrolled in Medicare Part D prescription drug plans, Center for
Medicare and Medicaid Services (CMS) found that the growth in rebates paid by manufacturers to PBMs is driving
higher out-of-pocket costs.
In the U.S., $15 of every $100 spent on
brand–name drugs goes to middlemen…
[and] the largest share, about $8, goes
to pharmacy benefit managers.
Bloomberg 2017

PBMs, who serve as the intermediary between payers and pharmaceutical companies, negotiate and receive
significant reductions in prescription drug prices and provide administrative services for health plans. PBMs,
however, take advantage of prescription drug plans’ benefit design and have been criticized for not having more
transparency in their pricing and rebate practices. In the repeatedly disrupted healthcare landscape, PBMs and
wholesalers will be pressed to prove value and success in creating efficiencies or risk losing their place in the supply
chain.
How PBMs
can profit
Spread Pricing
Charge clients more for some drugs than
they pay the pharmacy
Rebate Retention
Keep a portion of a drugmaker’s rebate,
around 10 percent, as compensation
Keep in House
Steer patients to their own specialty or
mail-order pharmacies
Clawbacks
Take back the difference between a
patient’s flat copay and the actual price of
a drug when the copay is higher
Source: The National Prescription Coverage Coalition & Bloomberg News

Implications
B) Direct-to-employer contractingA) Reestablishing contract guidelines
• Direct contract arrangements are becoming
an increasingly attractive way for healthcare
companies to remain competitive in a rapidly
changing market. Direct contracting, in which
employers eschew insurance companies to partner
directly with a healthcare provider, can give the
employer more control over the employee health
benefit design, and potentially lower the cost
of care and improve health outcomes (Modern
Healthcare).
• Healthcare providers who are struggling to find
new ways to bend the cost curve are only too
happy to take the employers’ business and cut
middlemen out of the equation.
• However, direct contracts are difficult to set up
and administer. For this to succeed, healthcare
providers will have to learn better ways to
coordinate care, improve customer experience,
and collect and analyze patient data.
• All contracts with industry middlemen should
be subject to periodic assessment to promote
price and rebate transparency. Outcome-
based pricing through value-based contracts
should also be emphasized.

Industry Disruptions – Implications and
Talent Mindset
The disruptions profiled in this section of the report have an air of inevitability about
them. As a result, there is no escaping them, no quiet place for the organization to seek
refuge. The pressures created by these disruptions must be responded to–and not just
once, but rather on an ongoing basis.
In each instance, whether it means doing more with less (supply chain disruption) or
more with more (healthcare integration), success or failure will come down to whether
value can be clearly demonstrated. This will require the organization and its talent to
demonstrate shrewdness, ingenuity and a keen eye for opportunity, and once bets are made, the wisdom to know
when to cut losses and when to double down.
Considering the disruptions highlighted in this section, here are some potential implications for the organization’s
talent portfolio.
There are three mindsets that drive innovation: doing things better, doing things differently and doing different
things. With the scope and scale of disruption that the healthcare industry is likely to experience in the coming
years, it will be necessary to innovate at the extreme end of the spectrum and develop the capacity to do different
things. This will require bringing in new sources of talent who are capable of thinking and doing differently than
what the organization has been accustomed to in the past. It’s not just new people in new roles–the organization
will also need to experiment with new approaches to configuring teams to unleash innovation.
• Increasing pressures for outcomes may well lead to greater pressure to take risks with talent entrusted to
secure those outcomes. How does the organization mitigate the risks taken, especially with top talent, while
simultaneously not stifling necessary risk-taking. How can it position itself to learn and grow from unsuccessful
talent risks?
• To create more value, many types of innovations will need to be pursued in the industry, not just product
innovation. This will require the organization to look to anyone to potentially contribute as an innovator, not just
members of the R&D or Innovation groups. What other assumptions about “who is capable of doing what” may
need to be challenged?
• As M&A activity increases in the industry, more organizations will face challenges with integrating different
talent mindsets into a unified set of values and assumptions. Cross-cultural perspectives on talent may also
come into play in the case of global mergers.

Talent Process
People
As the industry continues to morph and become increasingly complex and dynamic, so too will the organization’s
talent needs. Yet all this complexity and dynamism will come about in the pursuit of very opposite outcomes
such as efficiency, value and transparency. The organization’s talent processes will likewise need to mirror these
outcomes and become ever more streamlined and capable of delivering value to a diverse set of stakeholders.
Here are some specific aspects of talent processes to take into consideration:
• As the organization focuses on delivering increasing value to the patient, how can it make sure that it also
maintains a focus on delivering value to its talent?
• Keeping pace with industry upheavals and the ongoing demand for innovation will likely necessitate acquiring
nontraditional and even unconventional talent. How does the organization empower hiring managers to make
bold talent calls while also holding them accountable?
• As the organization seeks to shift its value proposition to the customer from volume to value, how might it
undergo a corresponding shift with what it reinforces for performance management?
• As organizations stake out increasingly unique niches in the healthcare landscape, their approaches to talent
may likely become correspondingly unique. Therefore the emphasis on establishing industry best practices for
talent may need to shift to determining best fit practices based on the specific needs of the organization.
If your organization is struggling to deliver on the promise of innovation with its current talent base, how does it
expect to do so when faced with even greater demand for “moonshots” and breakthroughs? New, and at times,
nontraditional sources of talent may be needed to spark and sustain innovation.
• As unrelenting pressure mounts to raise the bar on innovation and efficiency, organizations will need to focus
special attention on tending to talent engagement and also on instilling resilience.
• As new corporate entities form at an increasing rate of speed and complexity, organizations will need to keep
their employee brand coherent and fresh. Likewise, individuals’ personal leadership identity and brand will also
require fresh examination.
• There will be a high need for talent to liberate their thinking and challenge preconceived notions–specifically,
individual talent will often need to check their functional mindset at the door and approach cross-functional
teamwork with openness and flexibility.
• In an environment hyper-focused on capturing meaningful results and demonstrating value to its stakeholders,
individual talent will also need to continually highlight their contribution to results and demonstrate value in
compelling ways.

Societal
Disruptions

9. The Opioid Crisis
The U.S. is in the midst of a national crisis when it comes to opioid misuse and overdose. According to the U.S.
Centers for Disease Control and Prevention (CDC) “From 1999 to 2016, more than 200,000 people died in the
United States from overdoses related to prescription opioids. Deaths from prescription opioids—drugs like
oxycodone, hydrocodone and methadone—have more than quadrupled since 1999.” In January 2017, the CDC
reported more than 64,000 annual deaths related to drug overdose—a 21 percent increase from 2016 alone.
Source: catalyst.nejm.org

In 2019, the severity and complexity of this crisis will require increased collaboration between government entities,
payers, providers and health plans at the local, regional and state levels. They will need to simultaneously address
multiple parts of the same problem including prevention, raising awareness, identification of opioid use disorder
and treatment of chronic pain.
With the nation gripped in a drug crisis, hospitals and healthcare systems are partnering with community
organizations to address the opioid epidemic. They are reaching out to community mental health centers, local
behavioral health authorities, law enforcement and nonprofit organizations as well as connecting with providers of
naloxone (known to help patients survive an overdose).
Examples of successful approaches that hospitals have employed include:
• Project Engage, an early intervention program, resulted in approximately 30 percent of 1,500 emergency
department (ED) patients with substance use disorder accepting treatment. Before this initiative, the number of
patients accepting treatment was close to zero.
• The Alternatives to Opiates (ALTO) program effectively treats patients’ pain, and has reduced opioid cases in one
ED by 38 percent in five months (2017 American Hospital Association).
Healthcare providers need to identify and educate those patients at greatest risk for addiction. Patients as well as
their families need to be educated about the risks of prescription opioids.
Limiting the supply of prescription opioids in circulation is also a priority by decreasing supply and providing non-
opioid alternatives for chronic pain management. Currently, 49 out of 50 states have prescription drug monitoring
programs, and many have issued restrictions on filling opioid prescriptions.
At the same time, many insurers and pharmacies are establishing their own rules. Cigna no longer covers most
OxyContin prescriptions in 2018, instead directing patients to a “covered abuse-deterrent equivalent.” Anthem has
reduced opioid prescriptions by 30%, two years ahead of schedule, and Independence Blue Cross has restricted
initial prescriptions of low-dose opioids to five days or less. CVS Caremark, which is the in-house PBM for CVS
Health, is limiting most new opioid prescriptions to seven days [Massachusetts Medical Society (MMS)].
Aetna is working to help reverse the trend of opioid abuse across the country through their pharmacy, behavioral
health and medical programs. Aetna is aiding reductions in inappropriate opioid prescribing, assisting increased
access to non-opioid pain treatment options and promoting evidence-based recovery for members in need. Aetna
launched the Guardian Angel pilot program to identify and conduct outreach to members who recently experienced
an opioid-related overdose. The Aetna Foundation is providing grants totaling $6 million to fund state and local
projects addressing opioid-related challenges.
“Fighting the opioid epidemic requires a
comprehensive strategy that addresses both the
physical and social consequences of addiction.”
Daniel Knecht, M.D., M.B.A., Vice President,
Clinical Strategy and Policy Aetna

Implications
A) Leveraging Health IT
solutions for prescription
drug usage patterns
B) Payer partnerships for
value-based behavioral
healthcare
C) Better treatments for
chronic pain
• Behavioral healthcare providers
need to start developing a data-
driven system that brings value
to patients, providers and payers
equally.
• Leveraging existing data as well
as cultivating new approaches
to predictive analytics and
quality reporting could help
to understand the behavior
patterns that might indicate a
person is at high risk of addiction
or that they are about to relapse.
• Machine learning and predictive
analytics along with patient
data sets can be used to predict
the risk of relapse at the point
of service. Population health
analytics can be used to create
customized reports for provider
feedback and audit, and identify
patient groups, or populations,
with whom they can do targeted
interventions.
• Behavioral healthcare providers
(who are in most cases ineligible
for the financial aid available to
physicians and hospitals) have
been unable to use the power of
data collection and analytics.
• In the current value-based care
environment, it is important
to work with a payer who has
similar goals and understands
the challenges of the behavioral
health space.
• In the future, the healthcare
system will have to modify
current strategies for managing
pain including correctly
identifying causes, using
appropriate tools to quantify its
impact and making sure that the
treatment is aligned with the
patient’s goals and values.
• Certain companies like Aetna
have already taken a step in the
right direction. Aetna provides
coverage of EXPAREL® for
wisdom tooth extractions under
a value-based contract, and
Aetna members can now search
for providers offering opioid
alternatives in their provider
search tool, DocFind.
• Ensuring that patients and
families are aware of and have
access to various options for
care (including non-opioid
pain treatment options) is a
significant step in addressing this
complex issue.

10. Legislative and Regulatory
Changes in Healthcare
Healthcare industry transformation is accelerating at full speed, with strong growth in M&As, shifting value
propositions, blurring industry lines and ownership of physician practices by healthcare organizations.
Inexorable market change before and after the implementation of the Affordable Care Act (ACA), has left ACA
exchanges in financial trouble, providers facing decreased reimbursement and patients with limited access to plans
by metropolitan statistical areas across the country. “Repeal and replace” has been the Trump administration’s
mantra around healthcare reform. Though the ACA, also known as Obamacare, has not been repealed or replaced,
it is likely that the Republican Party will try to pursue healthcare reform through smaller, more intermittent changes.
Change has become part of the norm, and many payers and providers are struggling to keep pace with an ever-
changing business landscape.
According to Managed Healthcare Executive’s 2017 State of the Industry Survey, government requirements and
mandates top the list of challenges at 34%.
Government requirements and mandates top the list of challenges at 34%.
Source: Managed Healthcare Executive’s 2017 State of the Industry Survey

Reforming Medicaid and Medicare
Extreme changes are likely to be in store for Medicaid, the joint state and federal health insurance program that
covers 74.6 million low-income and disabled Americans.
Several states have already proposed changes that would address these concerns. According to Wharton healthcare
management professor Mark Pauly, attempts to rework Medicaid could include instituting premiums for Medicaid
beneficiaries, tightening standards for eligibility and having some part of the Medicaid population purchasing
coverage on exchanges. This could mean that hospitals and healthcare organizations will see fewer patients with
insurance coverage. It is not clear if this will translate into more patients using the ED frequently with fewer visits
for preventative care or hospitals with more dollars in uncompensated care.
In this environment, healthcare companies need to maintain a fine balance of core processes and capabilities with
the ability to employ those capabilities on a real-time basis to address emerging challenges and opportunities.
Implications
B) Develop a proactive rather than
reactive approach to compliance
A) Increased efficiency and cost
optimization
• The constantly shifting landscape of regulatory
challenges in the healthcare environment can
make it very difficult to decide where, and how,
companies need to allocate resources.
• Having an effective compliance program in place
allows firms to anticipate and swiftly address major
risk factors. Leading health organizations have
learned how to predict and prepare for changes in
healthcare regulation.
• Organizations will need to take various proactive
steps including conducting compliance risk
assessments at regular intervals and developing
more innovative care models.
• Healthcare companies will have to look
at new ways to reduce expenses without
affecting customer experiences.
• This could involve a mix of increasing
efficiency as well as investing in new products/
opportunities that lead to sustainable
competitive advantage.
• By shifting to a cost-optimization approach,
hospitals can realize a type of financial
stability that empowers them to look past the
present and invest in opportunities for growth
and improvements in value-based care.

Societal disruptions require healthcare organizations to more effectively anticipate changes
unleashed by epidemics and emergencies such as the opioid crisis (and the crisis in behavioral health
and access to healthcare in rural communities) as well as major shifts and upheavals stemming from
landmark events such as new healthcare legislation. In addition to shifts in technology and business
processes, healthcare organizations will survive and thrive amidst these societal disruptions by
demonstrating agility in all aspects of how they assemble and deploy talent to address matters that
impact the entire nation and in some cases, the entire world.
Considering the disruptions highlighted in this section, here are some potential implications for the organization’s talent
portfolio.
Talent Mindset
What are the talent management policies, assumptions and philosophy that guide your talent strategy in the face of societal
disruptions? How do you effectively maintain a constant state of preparedness, knowing that change is coming but not
knowing exactly what will occur or when it will happen? Developing skills at scenario planning will become increasingly
important to help position the organization to make productive bets on talent without overcommitting itself.
• How does the organization begin to reframe its identification and assessment of risks and develop a proactive rather than
reactive approach to compliance?
• The impact of these disruptions is not likely to be felt evenly, especially from community to community or region to region.
If your organization is widespread geographically, how do you flex and adapt your talent policies and practices to deal with
varied conditions across the system?
• The effects of conditions like the opioid crisis are widespread and affect all walks of life. No one is immune. How does the
organization take into account that some of these societal disruptions might also directly affect their employees or their
loved ones?
Societal Disruptions – Implications and

Talent Process
Do you have the agile talent processes needed to address the rapidly spreading effects of societal disruptions? How well do
your talent processes demonstrate the needed agility to anticipate and/or respond to societal disruptions?
Here are some specific aspects of talent process to take into consideration:
• How do you ensure that individuals selected have an understanding and capability to address current and future societal
disruptions? Are they equipped to understand the underlying causes of societal issues as well as the intended and
unintended consequences associated with the organization’s efforts to address these issues?
• How are development programs designed to encourage speed in anticipating changes resulting from societal disruption?
• What performance management processes are in place to anticipate and rapidly respond to societal disruptions? For
example, are there ways to measure if appropriate steps were taken so that an emerging crisis was mitigated before its
effects were widespread or catastrophic?
• Societal disruptions cannot be addressed effectively by a single organization; they are simple too large and too complex.
Partnership and collaboration are essential to developing innovative and sustainable solutions. How does the organization
reengineer its talent processes to promote interorganizational cooperation without incurring significant risks?
• How is the organization equipped to go outside the healthcare industry in search of partnership and solutions? How can it
draw from the talents in industries such as law enforcement, education and government?
• How is the organization equipped to provide emotional and physical support to those on the front lines of dealing with
public health crises? How can the organization help these individuals avoid burnout and also build their capacity to learn
and grow from their experiences?
People
Societal disruptions affect so many systems and the interactions among them that the exact nature of their impacts can be
difficult to disentangle and decipher. How agile are the people in your organization at dealing with the implications of societal
disruptions?
• To what degree are your employees confident that they can comprehend and deal with the impact of societal disruptions
on the organization and their work?
• How quick and proactive are your employees in addressing the challenges presented by societal disruptions?
• How creative are your employees when addressing the impact of societal disruptions on their work and the entire
organization?
• How well are analytics used by your employees to gauge the impact of their actions to address societal disruptions?
• Dealing with societal disruptions is stressful work that often involves setbacks and dealing with long odds–does your
talent have the long-term resilience needed to cope effectively with the strain caused by these disruptions?

Appendix
References
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• https://www.ahrq.gov/cahps/quality-improvement/improvement-guide/2-why-improve/index.html
• The Future of Experience in Healthcare Demands a Consumer-Aligned, Collaborative Ecosystem Published 28 April 2017
Gartner
• https://www.patientlibrary.net/tempgen/179481.pdf
• https://patientengagementhit.com/news/how-can-providers-drive-patient-empowerment-in-healthcare
• https://www.patientslikeme.com/about
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• http://www.managedhealthcareexecutive.com/mhe-articles/top-ways-health-organizations-improve-customer-experience/
page/0/1
• https://blog.euromonitor.com/2018/04/digital-health-consumer.html
• https://www.cmo.com.au/blog/brand-cx/2018/03/27/customer-experience-disruption-healthcare-faces-a-bitter-pill/
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• https://www.aha.org/system/files/2018-07/2018-aha-chartbook.pdf
• https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5902765/
• https://hitconsultant.net/2017/12/18/defining-healthcare-trends-to-watch-2018/
• http://www.managedhealthcareexecutive.com/healthcare-executive/managed-care-state-industry-survey-2017
• https://www.healthedeals.com/blog/aca/obamacare-whats-new/
• http://knowledge.wharton.upenn.edu/article/the-future-of-the-aca/
• http://www.governing.com/topics/politics/gov-2017-9-issues-to-watch.html
• https://www.dlapiper.com/en/us/insights/publications/2014/10/healthcare-industry/
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er-because-of-a-strong-online-presence-300649353.html
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more-consumer-centric.html
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line-the-hospital-of-the-future.html
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tions-in-healthcare
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curve-300667419.html
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ture-improving
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yet-take-note
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• https://catalyst.nejm.org/quandary-opioids-chronic-pain-addiction/
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• https://healthitsecurity.com/news/healthcare-cybersecurity-is-a-top-2019-executive-challenge
• https://www.csoonline.com/article/3244467/internet-of-things/2018-prediction-securing-iot-connected-devic-
es-will-be-a-major-cybersecurity-challenge.html
• https://healthitsecurity.com/news/payment-notification-is-top-healthcare-phishing-attack-subject
• http://nationalprescriptioncoveragecoalition.com/bloomberg-article-on-pbms-quotes-cahn/

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