Unlocking growth in healthcare: Digital innovations and population health

Healthcare providers represent the cornerstone of the U.S. healthcare system, but political, social and—most urgently—economic forces pose an existential threat to their sustainability. Climbing costs, supply chain issues, labor shortages, the rising tide of patients with chronic conditions, shrinking margins (and growing payer pressure) and many other forces threaten providers’ ability to fulfill their most basic function: caring for patients.

Against this backdrop, hospitals and health systems are searching for ways to more effectively manage and grow their businesses with an eye toward funneling the proceeds toward improving patient care. This means investing in capabilities beyond care delivery, including through integrated health plans, accountable care organizations, clinical research and development, and more.

Unfortunately, many organizations struggle to make these initiatives profitable because they lack either the internal capabilities or ecosystem relationships to pull them off—or both.

Moving forward, we see many opportunities to create greater sustainability for health systems. Two of the most exciting growth drivers are to be found (1) in digital innovations, both for their own patient populations and as spinouts to employers and others, and (2) through building analytics capabilities to optimize the value of their population health programs.

Building digital solutions into new revenue streams to fund patient care

Aside from patients themselves, no entity understands as deeply as healthcare providers the challenges healthcare consumers face. This makes health systems fertile laboratories for digital front-end solutions that create competitive advantage (and new revenue streams) by optimizing patient care, closing care gaps and improving patient experience.

This is what Mayo Clinic has done with its portfolio of AI-driven solutions, which includes technology products that improve patient care within Mayo and also generate revenue through licensing and partnerships with other health systems. Other large health systems, such as Cleveland Clinic, are focusing on building products that support diversified business initiatives, such as clinical research and development, genomics and precision medicine.

Unfortunately, many systems lack the go-to-market expertise and cross-ecosystem relationships to successfully commercialize their digital innovations. This explains why many health systems are partnering with companies like ZS to assist in the productization and commercialization of their digital innovations. We recently helped a large health system build an on-demand care management solution for high-risk patients. In addition to offering the platform to its own patients, the idea is to sell and license the technology to other health systems and employers as an add-on to their care management and employee assistance programs.

At the outset, this health system lacked a deep understanding of the wider consumer landscape, the buying process for this type of product and the sales model required to commercialize its solution.  Working with ZS, the hospital is now selling its solution, improving patient outcomes beyond its own patient population and creating a sustainable source of revenue it can use to fund its core work of delivering outstanding patient care.

Optimizing population health initiatives through better use of data and analytics

Another significant growth opportunity for hospitals and health systems today is in optimizing their payer contracting, specifically for value-based care and other innovative contracting approaches. These models are incredibly complex for providers to manage, and they tend to increase distrust between payers and providers. As a result, many providers have written off population health as unsustainable – a view I consider outdated.

This is because advances in analytics, AI and data availability give healthcare providers the ability to simplify their contracting approaches for risk-sharing arrangements, such as value-based and capitated care. With the right organizational capabilities, providers can use predictive analytics to identify (and, ultimately, close) patient care gaps by identifying high-risk patients, forecasting future healthcare utilization, optimizing care pathways and tracking outcomes against interventions.

If health systems can plug existing care gaps – especially for patients with comorbidities and complex conditions – it will lead to fewer hospital readmissions, more sustainable contracts and improved patient outcomes. This is what Intermountain Healthcare, a   Cracking the code on population health, as now seems possible, offers the potential to create a more sustainable healthcare system and deliver better health outcomes at the same time.

Making healthcare delivery sustainable depends on cross-sector collaboration

Whether it’s commercializing digital innovations or optimizing payer contracts, healthcare providers can only disrupt the status quo with close collaboration across the healthcare ecosystem. Commercializing tech-based solutions doesn’t just require a new mindset and talent pool, it requires contributions (in the form of data, technology, relationships and know-how) from big tech, biopharma companies and even payers. The same goes for optimizing the value—to providers, patients and payers alike—of population health programs.

For the past four years, ZS has surveyed healthcare consumers and providers from across the world on the topic of healthcare. One thing both groups agree on: Healthcare is becoming costlier and less accessible. Given this reality, healthcare providers have a strong incentive to explore every opportunity to create a sustainable business model that enables them to do good while doing well.