Looking Ahead: Market Trends Impacting Key Healthcare Issues

© 2024 Health Catalyst Inc. All Rights Reserved.
Looking Ahead: Market Trends Impacting
Key Healthcare Issues
Tim Zenger Leslie Falk
Market Insights, VP, Health Catalyst Chief Client Success Officer, Health Catalyst

Agenda
Key Healthcare Issues:
1. Economics
2. Data, analytics, and AI
3. Value-based care
4. Health equity

1.Economics
2.Data, analytics, and AI
3.Value-based care
4.Health equity
Poll Question
What area are
you most
interested in
today?

Signal or Noise?
1.4%
of 87,792

Economics

Large Macro Trends
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
Jan-60
May-61
Sep-62
Jan-64
May-65
Sep-66
Jan-68
May-69
Sep-70
Jan-72
May-73
Sep-74
Jan-76
May-77
Sep-78
Jan-80
May-81
Sep-82
Jan-84
May-85
Sep-86
Jan-88
May-89
Sep-90
Jan-92
May-93
Sep-94
Jan-96
May-97
Sep-98
Jan-00
May-01
Sep-02
Jan-04
May-05
Sep-06
Jan-08
May-09
Sep-10
Jan-12
May-13
Sep-14
Jan-16
May-17
Sep-18
Jan-20
May-21
Sep-22
Inflation Fed Target
Buying gets more expensive
Buying gets less expensive
Buying gets WAY more
expensive
Key Insights
 Good news,
healthcare as a
percentage of GDP
has decreased from
COVID.
 Bad news, healthcare
as percentage of GDP
is still 17 percent-plus,
and likely to increase
as GDP contracts.
 Costs are constant
and likely to rise.
Source: Altarum, Federal Reserve
11.17
16.6
0
10
20
30
40
Health expenditures as percent of annual GDP
Comparable high income country average United States
Buying stays
expensive, but
doesn’t increase
as fast

Is Your Business Model Sustainable in This Environment?
Key Insights
 Operating margins
have improved as
some healthcare costs
resources have
decreased.
 Margins are small and
there is no room for
error.
 Data/analytics can
provide insights into
revenue and cost
opportunities.
Source: KaufmannHall, Beckers
($11.6M)
3M
($48M)
12M
($14.9M)
3M
($21.1M)
3M
($28.6M)
9M
($177M)
9M
($36.6M)
12M
($58.6M)
3M ($16.4)
3M
($28.6M)
3M
($104.4M)
9M
($310M)
3M
($291M)
3M
($3B)
12M
-6%
-4%
-2%
0%
2%
4%
6%
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
Jul-22
Aug-22
Sep-22
Oct-22
Nov-22
Dec-22
Jan-23
Feb-23
Mar-23
Apr-23
May-23
Jun-23
Jul-23
Aug-23
Sep-23
Oct-23
Nov-23
Dec-23
Jan-24
Feb-24
Hospital Median Operating Margin Index

Healing Hands, Strained Hearts
Key Insights
 We already see these
trends impacting
quality of care, costs,
and revenue.
 Will technology help
or contribute to the
burden?
 AI is already available
to identify and
alleviate areas of
burden.
Very Little
or No
Trust
23%
Marginal
Trust
24%
A lot or A
Great Deal
Of Trust
53%
How much do you trust that the leaders
of my organization are making decision
that are good for patients
Source: AMN, Jarrard
How would you rate the level of stress you have
experienced in your job while working as a nurse?
2021 2023
A great deal 38% 56%
A lot 27% 25%
A moderate
amount
22% 15%
A little 10% 3%
Not at all 3% 1%

Data, Analytics, and AI

Needing More Data Isn’t The Problem Anymore
Key Insights
 Many improvement
teams can’t articulate
the questions they’re
trying to answer.
 Data volume does not
equal data value.
 General mistrust is a
common barrier to
data and analytics
Source: World Economic Forum, Elsevier, ZS
97% of data
hospitals produce goes unused
71% of clinicians
don’t know what to do with data
69% of clinicians
feel overwhelmed by the amount of patient data

Maturity Distibution By Industries
How Does Healthcare’s Analytics Maturity Compare?
Key Insights
 Healthcare
persistently has a low
analytic maturity.
 Analytically mature
organizations perform
better on 3, 5, and 10-
year revenue and
margin performance.
Source: International Institute for Analytics, IMO
90% of provider
leaders have lost
revenue due to
inefficient data use
Low Maturity
High Maturity Maturity Distribution By Industries

1.People
2.Processes
3.Culture
4.Technology
Poll Question
What is the principle
challenge your
organization faces in
becoming
data-driven?

Technology Alone Is Not The Solution
Key Insights
 People and process
are critical for
improvement efforts.
 Lack of available,
skilled resources
encourages the need
to seek business
process optimization
and managed
services.
Source: New Vantage Partners, Sage Growth Partners
Culture | People |
Processes, 79.80%
Technology
Limitations,
20.20%
Principle Challenge To Becoming
Data-Driven
Data-Ingestion Challenges
68%
Lack of
human capital
52%
Lack of
financial capital
44%
Lack of
technical capital

Key Insights
 Maintenance does
not allow for
transformation.
 Automation and AI
can help reduce
maintenance costs,
enabling
transformation.
 Do we know the ideal
spend and category
mix?
What Level Of Investment Is Required To Transform
Your Business?
Source: Gartner
77%
77%
78%
78%
77%
81%
13%
12%
14%
14%
12%
12%
10%
11%
8%
8%
11%
7%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2018
2019
2020
2021
2022
2023
Healthcare Provider IT Spending Broken Out By Purpose
Maintain Grow Transform

AI: A Trend Or Fad?
Key Insights
 Trend or fad? Who
cares, it can make a
difference.
 Lack of strategic
investment in AI may
put you behind.
 AI is not a panacea;
we need to use the
guiding question,
“What is the cost to
the patient of being
wrong?”
For every $1
companies
invest in AI,
they are
realizing an
average of
$3.5 in return
Source: HIMSS, IDC

Value-Based Care

87% Had A Unique Population Health Definition, But
Some Common Elements Exist…
Key Insights
 It’s less about the
definition, but more
about a central goal.
 Is your unit aligned
toward a central goal?
 The measure of
success is important.
Source: Health Catalyst
Defined
population
4%
3 definitions
with 2 mentions
9%
Unique
definition
87%
17%
26%
30%
36%
41%
Care / Interventions
Cost
Health
Quality / Outcome
Population
Top 5 Definition Element

Move To VBC Slower Than Expected Or Predicted
Key Insights
 Misaligned incentives
continues to be a
major issue.
 How do we accelerate
adoption?
 Is it even feasible
given healthcare’s
financial structure?
Source: HCPLAN
41.0%
39.1%
39.3%
39.3%
40.5%
40.6%
25.4%
25.1%
22.5%
19.8%
19.5%
18.1%
29.8%
30.7%
31.8%
34.2%
32.6%
31.7%
3.8%
5.1%
6.4%
6.7%
7.4%
9.6%
0% 20% 40% 60% 80% 100%
2017
2018
2019
2020
2021
2022
Total Payments Made Through Each Model
Category 1: Fee-for-service with no link to quality
Category 2: Fee-for-service linked to quality
Category 3: APMs built on fee-for-service architecture.
Category 4:Population-based payment

Is VBC Sustainable In Improving Outcomes?
Key Insights
 Should we even be
focused on VBC when
most models have lost
money and aren’t
increasing value?
 Is healthy
competition—like
retail—the answer?
 Will individual state
initiatives lead to
solutions or are they a
Trojan horse?
 90% of models aren’t
showing the benefit.
CMS Innovation Center Has Launched 54 Models, 1M
providers, 26M patients
Source: CMS, MGMA
Yes
28%
No
72%
Has the move towards VBC
initiatives in
Medicare/Medicaid improved
the quality of care for your
patients?

Health Equity

Health Equity: A Priority, But Lacks Resources
Key Insights
 Prioritization and
allocated resources
don’t match.
 Why the discrepancy?
Right thing to do, ROI,
regulatory?
 Inequities have an
impact irrespective of
costs and outcomes.
83%
% C-suite who see improved health
equity at a top-10 goal for 2024
45%
Top health equity challenges:
Budget and resource allocation constraints
Source: Deloitte

How Much Can Providers And Their Organizations Move
The Needle On Patient Outcomes And Personal Health?
Key Insights
 80% of the patient’s
health is outside of
traditional care.
 Providers ideal is to
focus on the 100% not
just 20%.
 Structural issues and
incentives influence
and drive these
results.
5% 32% 24% 26% 10% 3%
How much time and abiliy do you, as a physician, CURRENTLY have to
effectively address yout patients' SDOH?
None Very Litte Little Some A Good Deal A Great Deal
Source: The Physicians Foundation
How much time do you, as a physician, CURRENTLY have to effectively
address your patients' SDOH?

Avoid and Defer
Key Insights
 When will wellness
become the focus for
patients and providers
instead of sick care.
 While cost isn’t the
only barrier to
focusing on wellness,
it is the largest factor.
Source: Qualtrics, Parsley Health
8 out of 10 full-time employed, insured
women delay care until symptoms worsen
or impact their daily lives
46%
43%
12%
High Costs Of
Healthcare
Services
Higher Costs of
Living Overall
Lack of Medical
Insurance
Most Common Reasons Consumers
Choose to Defer Care

Patient Access: Still A Difficult Problem To Solve
Key Insights
 We are struggling to
meet patients’
demand for access.
 Is there an
opportunity to
consider managed
services for areas like
clinical staff,
IT/analytics, and
revenue cycle?
Source: KaufmanHall
63%
27%
10%
Ability To Meet Demand For Patient
Access
Struggling To Meet Demand
Able To Meet Demand
Dealing With Idle Capacity
7%
9%
16%
16%
21%
23%
32%
34%
53%
Supply Chain
Other
Call Center
Food and Nutrition
None
Environmental
Revenue Cycle
IT
Clinical Staff
% of Organizations Pursing Outsourced Solutions

Questions?
Leslie Falk and Tim Zenger
hcwebinars@healthcatalyst.com
Alora Martin, Webinar Program Manager

Looking Ahead: Market Trends Impacting Key Healthcare Issues

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