Symposium issue for Sept 2015

Survival and the Middle Picture

2016 ConvUrgentCare Symposium Issue

Managing a large enterprise in a predictable environment is tough enough.  But when it turns unpredictable, it becomes a complex web of cash flow management, hard decisions about your employees and leadership, and risky new strategic paths.  As many of you have heard me say, I lived through this in the mainframe computer business.

I have also said the business of taking care of people is no longer a predictable enterprise, and in many ways the hospital business model reminds me a lot of the mainframe business model.  Big computing fell victim to small computing.  High acuity is falling victim to low acuity.  Or better said, the lower the acuity level, it seems, the lower the predictability.  It is now all about questioning your assumptions.  Constantly.   

I am the host of our annual ConvUrgentCare Strategy Symposium and each year we try to bring together speakers that, when taken together, tell a story that helps you manage to an uncertain future.  The 2016 ConvUrgentCare Strategy Symposium is about looking at what we call “The Middle Picture.”  You have heard the big-picture talks from healthcare futurists.  About half of their predictions will come true, you just don’t know which half.  And there are conferences that go into the nitty gritty details on everything from facilities management to ICD-10.

But the middle picture is all about executing on future trends that we know are going to happen and building new teams and partnerships that are 100 percent committed to winning at their particular part of the challenge.

Here are three of those trends we know are going to happen:

1.       The forces of economics will push virtually all commercial and individual health insurance plans to some form of high-deductible coverage.  Within five years you will have to assume that every non-Medicare/Medicaid healthcare consumer who is healthy enough to walk through your doors for a low acuity service will be paying for all, if not most, of the cost of that care.

2.       Consumer technology, meaning devices that consumers can afford to own, will play a far more significant role in their interactions with healthcare providers.

3.       Hospitals will be in a battle for survival as they face non-traditional competitors moving into the provider space.

In the on-demand medicine space, we have come to the conclusion that many initiatives by hospital systems and even the most sophisticated of urgent care operators, are not the most important initiatives for building long-term competitive advantage.  We hope that this year’s conference will help bring some clarity around that middle picture, and the elements required to win.

Economic Forces

What has existed in virtually every other industry is now happening in healthcare: consumers are paying for most of their low-acuity healthcare services out of their own pocket.  The result is a more powerful and demanding healthcare consumer, and a healthcare services industry that looks a lot like most other retail service establishments.  Teams will have to be consumer focused.  Training on interacting with consumers will move from tactical programs like “The Language of Caring” to larger, more sophisticated training departments who strive for high levels of performance and service level guarantees.

As we look at training, patient care and marketing, what if our assumptions about motivation, education and engagement are all wrong?  And how might those faulty assumptions apply to how we build teams, lead patients to healthier lives or motivate new customers to come to our clinics?  Leading us in that discussion will be Kyra Bobinet, MD, CEO of engagedIn. 

“The surprising thing is that most people know what they should do, but they can’t explain why they don’t do it,” says Dr. Bobinet.   Dr. Bobinet is one of those inspiring bright lights in healthcare who is helping leaders across the country raise the bar on interacting with patients, customers and team members.  She will discuss her work with “fast brain” and “slow brain,” and how the gap between the two are linked to why behavior change doesn’t happen.  She will talk about myths around willpower, motivation and engagement.  And she will give us actionable insight into how emotions can carry the day when trying to change behavior.

Also speaking at the conference is Gary Loudamy, operating partner, Greenridge Investment Partners.  Mr. Loudamy is a former Johnson & Johnson executive who has applied his experience with a consumer products company to walk-in medicine.  His work is so successful that a private equity firm investing in urgent care centers hired him.  His work has involved the connection between leadership and strategic planning, and what he calls the causal hierarchy.

“Outcomes have causes,” he says.  “If you set up a process that causes positive outcomes you will see what “good” really looks like.  In a highly competitive consumer services environment, this is critical.”

Creating an environment where you have a high degree of consistency in the customer experience is an area where healthcare provider organizations are only getting started.  With so many hospital systems tied to customer satisfaction systems like Press Ganey, there are slow reaction times to unhappy customers.  The result is often negative social media commentary and poor on-line reviews

Another area where economics will force us to change is with consumer marketing.  To begin with, most retail business have no choice but to spend a fairly high percentage of revenue on advertising and marketing.  Ray Owens, CEO and founder of DX Marketing, has made a living as a marketing expert in the chain restaurant industry.  But four years ago his company realized there was tremendous overlap with on-demand medicine and began focusing on that segment as well.

“For a long time the marketing sophistication in chain restaurants has pushed the edge of what’s possible,” he says.  “When you compare that industry to healthcare, there’s a pretty big gap.  That’s what makes it so satisfying.  We’re able to bring a whole new level of customer targeting and payback that healthcare is just not accustomed to.”

Owens will go into some detail on the new levels of consumer analytics and targeting that are possible.  As walk-in medicine looks more and more like other retail establishments, the timing couldn’t be better.

Technology

Closely related to consumer marketing in healthcare is the subject of telemedicine, or as many would prefer to say, “telehealth.”  One of our keynote speakers at this year’s conference is Jay Sanders, M.D.  In fact, Sanders snickers at the telehealth/telemedicine terminology debate.

 “It’s not telehealth; it’s not telemedicine,” he says.  “It’s just medicine.”

Dr. Sanders is CEO of The Global Telemedicine Group, adjunct professor of medicine at Johns Hopkins School of Medicine and a founding board member and president emeritus of the American Telemedicine Association.   He is known to many as the "Father of Telemedicine.”  Dr. Sanders will look the past, present and future of seeing patients outside of the traditional exam room using technology.  And the future is very different from what most people looking at the field realize.

“From a medical standpoint, we’re just taking the exam room to the patient,” he says.  “And despite some of the resistance out there, in many cases it is better medicine.”

He points to measures such as blood pressure or peak flow.  The environment can have a tremendous impact on those measures, he says.

He will also point to some of the latest research and development, including consumer devices in the home and mobile devices.  Site and sound devices, such as digital otoscopes and stethoscopes, are what we think about today.  But Sanders says we will begin to see the ability to capture touch digitally, which will move no doubt increase the scope of healthcare services that can be offered over a network.  And bandwidth will continue to increase.

New Competition

Sanders says new players are entering this space, and that, too, is going to change the entire healthcare industry structure.   Optum, the healthcare services arm of UnitedHealth Care, is the one that hits closest to home.  Optum is viewed as one of the most aggressive players in the telehealth space.  But that has not stopped them from acquiring and developing brick and mortar in the form of large multispecialty groups like Southwest Medical Associates and urgent care platforms like MedExpress.

Another is the partnership between IBM and Apple, ironically, made public the week after the Optum-MedExpress announcement.  That partnership aims to tie IBMs famous Watson supercomputing and artificial intelligence capability with Apple’s consumer reach through mobile devices.  IBM has created a “Watson-in-Medicine” business unit with 2,000 people.   Apple has two develolper tools kits, HealthKit and ResearchKit, which allow the collection of personal health data.  The idea is to create a kind of cloud-based middle layer between consumer devices, clinic-based electronic medical record systems and a high-powered computational system that can help with research and diagnosis.  No doubt other IT giants like Cerner and Epic won’t be sitting on the sidelines.

CVS is another company we can’t ignore.  Clearly they are no longer a retailer playing on the periphery of healthcare.  Since dropping tobacco products from its shelves and renaming itself CVS Health, the company has been embarking on a plan that will give them enormous reach to consumers through its own stores and Target stores, to employers through its pharmacy benefits management (PBM) company, Caremark, and through a rapidly evolving telehealth strategy that weaves in hospital affiliations across the country.

What is most potentially disruptive about these new competitors isn’t just their potential to deliver patient care.  The real disruptive power will come from data: data about consumers, data about outcomes, and data about cost.  Back-end systems are beginning to show up as more and more influential in the practice of medicine from the most high-acuity intensive care unit at a hospital to the most basic screening at an employer worksite. 

Other Speakers and Topics

The 2016 ConvUrgentCare Strategy Symposium will cover a number of other topics as well:

Gordon Maner, managing partner at Allen Mooney Barnes Investment Banking is one of the most active investment banking professionals in the urgent care space, will review the major deals in 2015, provide some perspective on current valuations, and offer some predictions on what to expect in 2016 and beyond.

Jon Henderson, office managing partner in Dallas and chair of the Corporate and Transactional Practice at Polsinelli PC, will cover how joint ventures are being structured between independent urgent care operators and hospital systems, and what he believes are the best approaches for both parties on the most often negotiated issues.  Interest in joint ventures between health systems and independent urgent care operators spiked in 2015, so we expect this session to be very useful to our attendees.

Robert Rohatsch, MD, FACEP, co-founder and former chairman and CEO at Physician One Urgent Care, will present lessons and observations for hospital systems from a former ED physician turned independent urgent care operator. It is a view from the independent operator side that all health systems should pay close attention to.  Dr. Rohatsch built Physician One from a single center in 2010 to the nine centers that operate today across Connecticut.

Bernie Kuhn, a principal at Merchant Medicine, will present “A Playbook for Health Systems in the Walk-In Space.”  The good news for hospitals is they have a trusted brand and a great opportunity for their urgent care business to be both a positive financial contributor and a catalyst for change in their organization. The challenge is hospitals will have a hard time competing if they run their urgent care business like a hospital. Kuhn will outline the unique challenges hospitals face in the walk-in business and, using case studies, he will show how to overcome these obstacles.

And finally, I will be giving a talk called “Bubbles Mean Troubles,” where I look at certain submarkets of on-demand medicine, and point out the sectors that are most vulnerable to a “pop” in their growth cycle.

Registration and Location

The 2016 ConvUrgentCare Strategy Symposium will take place at the Marriott McDowell Mountain Resort in Scottsdale, AZ, January 25-27, 2016.  The early registration fee is $799 until October 15, and $999 after that date.  The conference is an invitation-only event for hospital system and large medical group executives.  If you have not received an invitation and would like one, please contact us at info@merchantmedicine.com or call Yvette Harvieux at (651) 483-0450 x702.