Published Tue, Oct 10 2023 12:00 PM EDTUpdated Tue, Oct 10 2023 1:58 PM EDT

• Microsoft introduced new tools in Microsoft Fabric and Azure AI for health-care organizations.
• The new products can combine data from sources such as electronic health records, images, lab systems, medical devices and claims systems so organizations can standardize it and access it in the same place.
• Microsoft said the new tools can also help eliminate the "time-consuming" process of searching through these sources one by one, so medical providers can focus on care.

Microsoft CEO Satya Nadella listens to an audience member's question during the company's annual shareholder meeting in Bellevue, Washington, Nov. 30, 2016.

Stephen Brashear | Getty Images News | Getty Images

Microsoft on Tuesday announced new data and artificial intelligence products that aim to help health-care organizations easily access and learn from the mountains of information collected by doctors and hospitals.

The health care and life sciences industry is responsible for generating more than 30% of all data produced globally, according to a recent report from Deloitte. But it can be challenging to leverage all that information since it is stored across a variety of different systems and formats. Around 97% of all the data generated by hospitals remains unused, for instance. 

To help address this issue, Microsoft said Tuesday at the HLTH conference in Las Vegas, it developed new health-care-specific tools in Fabric, a data and analytics platform the company announced in May. It can combine data from sources such as electronic health records, images, lab systems, medical devices and claims systems so organizations can standardize it and access it in the same place. Microsoft said the new tools will help eliminate the "time-consuming" process of searching through these sources one by one.

Microsoft has been trialing Fabric for health care with select customers including Northwestern Medicine, Arthur Health and SingHealth, and it is available in a preview capacity starting Tuesday.  

Doug King, the chief information officer at Northwestern Medicine, said Northwestern is still in the process of moving its data into the Fabric system but that the organization is already excited about the potential. 

He said consolidating disparate data will ultimately help health systems improve care and see more patients.  

"Data is king now within health care, and that goes from everything from understanding what's happening in the OR, to how many patients are coming in? How many patients are leaving the house or the hospital? And then how can you get them in faster?" he told CNBC in an interview. 

King said Northwestern is deploying Microsoft's technology thoughtfully, but it could be a "game changer" if it is done well. He said the organization is thinking about future applications such as managing patient flow and staffing, as well as how to integrate broader population health data, such as where food deserts are located, into care.  

"The current state of technology and Microsoft Fabric and Azure and generative AI, all of that, it's going to change the way we live. And it's going to change the way we take care of patients. And it's probably one of the best shots that we have to solve some of the biggest problems we have within health care," he said.  

Microsoft also introduced new tools for health-care organizations within its Azure AI services Tuesday.

The company will offer a new generative AI chatbot called the Azure AI Health Bot, which can pull information from a health organization's own internal data as well as reputable external sources such as the Food and Drug Administration and the National Institutes of Health.

Linishya Vaz, principal product manager at Microsoft Health and Life Sciences, said the chatbot can be used to help staff within an organization ask questions, such as how to treat a specific disease and what the internal protocols and processes are. Patients can also use the chatbot within their patient portal to ask clarifying questions about their symptoms and medical terms they encounter, she added.

"What's also really important is that we built in guardrails and safeguards into this process," Vaz told reporters at a press briefing. "There's a way to verify this information, make sure the customer can do an audit of the answers to see that they are credible."

Microsoft announced another solution called Text Analytics for health, which can label and extract important medical information from a variety of unstructured data sources such as clinical documents and notes. Vaz said the tool will be released in Spanish, French, Italian, German, Portuguese and Hebrew in addition to English.

Finally, Microsoft unveiled three new models within Azure AI Health Insights, which offers tools to help doctors, nurses and researchers make more informed decisions.

The first model, patient timeline, gives clinicians a simple, chronological overview of a patient's medical history by using generative AI to consolidate information from different unstructured data sources.

"You're able to visually see, immediately, there was a medical encounter here, there was a procedure done here, this is the medication that someone took, and [the clinician's] able to get a really good picture," Vaz said.

The second model, called clinical report simplification, allows clinicians to use generative AI to simplify reports full of complex medical terminology into language that patients may understand better. And the final model, radiology insights, aims to help clinicians and radiologists by identifying errors and inconsistencies that can come up across different reports. The model can also offer follow-up recommendations.  

Vaz said Microsoft's new health-care tools within Azure AI will help improve patient experiences and allow clinicians to focus on delivering better care. The new solutions are available in a preview capacity starting Tuesday, Microsoft said.   

When gold miners, pioneers, and others began to migrate to the Pacific Northwest in the 1800s, it soon became clear they would need services like health care and education. In 1856, Mother Joseph and four Sisters of Providence answered that call by traveling 6,000 miles from Montreal to the Washington Territory, establishing hospitals, schools, and orphanages. Over the years, other Catholic sisters transferred sponsorship of their ministries to Providence, helping to create a mission-focused, not-for-profit health care organization that now delivers services across seven states.

Today, Providence runs 51 hospitals, 829 physician clinics, senior services, supportive housing, and other health and educational services, employing more than 117,000 caregivers. As technological advancements continue to transform the health industry, Providence is focused now on simplifying, modernizing, and innovating, using AI and other technologies for increased efficiencies and better personalization of the services it delivers. In doing so, it aims to support the organization’s mission to serve all, especially the poor and vulnerable, and enhance the patient and caregiver experience, according to B.J. Moore, CIO and executive vice president of real estate operations and strategy for the health system.

In a recent discussion with Randy Bush, a principal with Deloitte Consulting LLP, Moore describes what he anticipates for the future of health care, including the role technology is playing at Providence and beyond.

Bush: What is your vision for technology in health care in the coming years? What are the big opportunities?

Moore: In general, health care is probably behind many vertical industries when it comes to technological advancement. So, our tactical vision is to prioritize closing that gap through simplification, modernization, and innovation. Eventually, I would like to see health care play a leading role in the use of AI.

As I look to the future, AI is clearly one of the biggest areas of opportunity. Not only can it facilitate automating and simplifying operational functions like HR, finance, and IT, but it also presents a unique opportunity to improve the effectiveness of our caregivers. We estimate that nurses and doctors currently spend about 50% of their time completing pure administrative work. AI can relieve some of that burden so caregivers have more time and energy to dedicate to their patients.

When it comes to care, our goal is to help patients manage their health needs more effectively and achieve better health outcomes through the use of AI––further advancing our vision of health for a better world.

What types of technology do you expect will play a leading role?

Generative AI is of course the hot topic of the day, but for this technology to be most effective, organizations should have strong building blocks underlying it, and that starts with simplifying and moving data to the cloud. That was step one for us. As part of simplifying our operating environment, we went from 10 on-premise ERP systems to just one in the cloud in 2022. It’s a similar story for our electronic health record (EHR) technology—we now have a unified single system.

It’s like Maslow’s hierarchy of needs—the most basic needs have to be met before achieving higher-level needs. In this case, without a strong foundation, an organization probably cannot breed technological progress and innovation. For us, that foundation has included adopting SaaS and becoming cloud-native. It also includes simplifying business processes and workflows and improving the experience and effectiveness of employees and caregivers.

But it’s important to remember that AI is not a new concept that just showed up in the last six months—we’ve been using it for years. For example, we’ve been using machine learning to schedule nurses predictively. During COVID-19 surges, while remotely monitoring 35,000 patients, we used predictive modeling to identify where cases would surge and when our hospitals and clinics would need supplies, including personal protective equipment. We also use ambient AI devices to supplement doctors’ clinical notes and foster more attentive doctor-patient interactions. On the administrative side, we’re using generative AI to produce job descriptions, though what I especially love about that technology are its reductive capabilities—it can look at an entire medical record or research paper and provide a summation. It’s not just about content creation; that summarization capability is very powerful. Other new developments hold significant potential for health care as well, including smart and wearable devices that empower patients with more control over their health.

Transforming health care comes in many flavors, but overall, much of the focus is on efficiencies. Right now, technology often amounts to one plus one equals 1.5. Our caregivers frequently put more into systems than they get out and view technology as a burden that interferes with the practice of their craft. Our goal is to make technology something that relieves them of administrative tasks and helps them deliver the best patient care possible—in other words, to use technology as a force multiplier that makes one plus one equal five.

What are some milestones you’ve achieved so far? Any tangible benefits or quantifiable results you can share?

In addition to consolidating seven legacy systems and transitioning almost 300 entities to a single ERP system as well as embracing one EHR platform, we’ve implemented three AI solutions and have four more in production. We have a consumer-facing chatbot that can answer a majority of patient questions without requiring the direct involvement of a caregiver, for instance. We’ve also implemented AI for inbox management, using large language models to categorize incoming messages to make them easier for caregivers to triage.

From our ambient AI solution, internal surveys indicate that 69% of providers report an increase in provider/patient face time; 56% of physicians report a reduction in feelings of burnout and fatigue. Our internally developed MedPearl system, meanwhile, includes a knowledge base of over 560 guides and algorithms curated and validated in a no-code environment by our clinician community and engineered to optimize the workflow for specialty care referrals.

What challenges have you faced? How did you overcome them?

One thing that’s really holding us back is the shortage of nurses and doctors. We don’t have enough people coming into those roles. It can take eight to 12 years of education, and today, people are aging out faster than the new generation is joining. If we want to grow and have a bigger impact in our communities, we need to reduce the burnout of those nurses and doctors and improve our effectiveness and operational capabilities. Virtual care can help, allowing nurses who can no longer do rounds to practice remotely from home while helping us reach a broader geography, including rural communities that tend to be underserved.

Another challenge is making the cultural shift toward innovation. Health care in general can be slow to change. As these new AI tools and concepts progress, it’s important to establish an innovative mindset. When we started rolling out ambient AI tools in clinical care, we carefully selected doctors who we suspected would be the most open-minded to using a beta technology with an unpredictable and unproven success rate. Sometimes it will work great; sometimes it won’t. That’s part of the process. Over time, the technology matures, and only then can it be rolled out to other physicians for wider use.

What advice would you offer to peers embarking on similar journeys?

I’ve talked to many CIOs in the industry who are just beginning their cloud journey; some are even still questioning whether the cloud is a fad. To me, it’s not discretionary. You’re going to miss out on the next wave of innovation if you don’t get on board now. But technology is only half the picture; the other half is simplifying business processes. This is a matter of life and death for a health system. At the end of the day, it can help empower the patient and enable caregivers to practice their art. It’s a win-win.

—by Katherine Noyes, senior writer, Executive Perspectives in The Wall Street Journal, Deloitte Services LP

Published on  Oct 6, 2023, 7:00 PM

This article is part of an ongoing series of interviews with executives. The executives’ participation in this article is solely for educational purposes based on their knowledge of the subject and the views expressed by them are solely their own. This article should not be deemed or construed to be for the purpose of soliciting business for any of the companies mentioned, nor does Deloitte advocate or endorse the services or products provided by these companies.

This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor.

Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.

About Deloitte

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the “Deloitte” name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see www.deloitte.com/about to learn more about our global network of member firms.

Copyright © 2023 Deloitte Development LLC. All rights reserved.

Commercial reimbursement is poised for a fade-out and corporate giants may ramp up their demands and scrutiny. Are hospitals and health systems ready? 

Hospitals and health systems rely on commercial reimbursement to supplement the money they lose from governmental payers. Private insurers paid nearly double Medicare rates for all hospital services, on average, according to a KFF analysis of 19 studies comparing Medicare and commercial payment rates. Medicaid fee-for-service payments for physician services are even lower — nearly 30 percent — than those from Medicare. 

This isn't to say that working with commercial payers is anything close to utopia. Their reimbursement rates to providers may be higher than those of their governmental counterparts, but the cost-control tactics they deploy when making payments are disruptive. Throughout the first three months of 2023, about one-third of inpatient and outpatient claims submitted by providers to commercial payers went unpaid for more than 90 days, according to an analysis from Crowe. 

The provider-commercial payer relationship, albeit flawed, allows for the cross-subsidization that determines the financial sustainability of most hospitals and health systems. It is essential. And now, as employers brace for rising healthcare costs, the provider-commercial relationship is also increasingly volatile. 

"The strong U.S. economy and a general labor shortage have collectively served as a great buffer for payers and providers, but in recent conversations with employers and their advisors, we hear that employers' ability to continue to invest in rising healthcare costs is fraying (one advisor described employers as approaching a 'benefits cliff') and they are willing to consider healthcare cost management options they had not seriously considered in the past," Joyjit Saha Choudhury, managing director with Kaufman Hall, wrote in an Oct. 10 analysis. 

Nearly half of Americans receive health insurance through an employer. Average costs for U.S. employers that pay for employees' healthcare will increase 8.5 percent in 2024 to more than $15,000 per employee, according to a projection from Aon. The increase is nearly double the 4.5 percent bump to healthcare budgets that employers experienced from 2022 to 2023.

This forecast builds on recent cost increases: The annual premium for family coverage in 2022 averaged $22,463, with the worker contributing $6,106 annually — an increase of 20% over the previous five years and 43% over the previous 10 years.

There are a few ways commercial reimbursement could weaken, some familiar and some intensified by employers' growing cost burden, according to Mr. Choudhury. Employers may shift more costs to employees via premiums, deductibles, copays and coinsurance or turn to narrow networks. Health plans may ramp up reference based pricing, in which the payment amount for a service is capped regardless of the provider's usual unit cost for that service. Or employers may negotiate "best price" clauses into their contracts with insurers. Most extreme, employers could drop coverage altogether, which has been playing out over the past decade with small businesses with 47% of companies with three-49 employees offering health insurance in 2022, according to KFF.  

Although employers have a menu of cost containment strategies for healthcare costs, they have been slow to use them so far due to fierce competition for talent. Shifting healthcare costs to employees doesn't make for the most alluring benefits package when competing to attract and retain top talent. 

But if and when employers turn up the dial on healthcare cost containment or quality control, providers will feel a variety of impacts either directly or indirectly. Spillover effects include: increased competition and rate concessions if payers narrow network participation; shifts in revenue and volumes if enrollees move from commercial group markets to individual or exchange markets; more cash price-seeking patients; and increased scrutiny or measurement toward quality of care, which varies widely for covered employees. 

An analysis from JP Morgan released in August shared specific examples of the variation in care delivery for employees, finding that in a sample of 809 Ohio cardiologists, among the top 10% of providers, an average of 73% of their patients are taking statins regularly. Among the bottom 10% of providers, about half as many patients adhere to statins. Among 3,121 Texas obstetricians, the instance of a woman with an uncomplicated pregnancy undergoing a C-section ranges from 14% for 10th percentile to 61% for the 90th percentile, depending on the obstetrician who delivers the baby.

Although the clinical variation is stark, managing it is difficult. Neither employers nor employees can reliably learn which physicians are low- or high-performing without provider-level quality data. 

"Even though employers do not often interface directly with health care providers, employers can shift their health plans toward accountable care models, where physicians manage cost and quality across the spectrum of care delivered to their patient panels," JP Morgan wrote in its analysis. "Within these arrangements, provider quality data can be leveraged to both improve a provider's own clinical practices and to facilitate high-quality specialty referrals."

If employers and payers lean more heavily on providers to demonstrate appropriate, high-quality care, it will have been a long time coming. While "value-based care" has been in the zeitgeist for years, fewer employers by name have publicly stepped up to command greater control over the cost and quality of care. This pursuit may have been the stuff of closed-door rate negotiations or health plan network design. But in a time when employers are miscalculating union tactics and demands while seeking stabilized talent, it would make sense if large corporations looked outward and turned up the heat as healthcare purchasers.  

Walmart is one of the few and early major employers to recognize and act on the variation it experienced in employee healthcare. After establishing its Centers of Excellence program in 2013, in which it partners with vetted health systems for defined episodes of care, the retail giant learned of the complete lapses in quality that employees had previously received from healthcare providers that Walmart did not vet or approve.  

Lisa Woods, vice president of physical and emotional wellbeing with Walmart, said in 2019 that 10% of employees who received a cancer evaluation at Mayo Clinic in Rochester, Minn., learned that they, in fact, do not have cancer. They receive a different diagnosis entirely; 55 percent receive a different treatment plan. Some Walmart associates learned that their cancer diagnoses were based on biopsies that were never completed at their local hospitals or medical groups. Another 54 percent of Walmart associates were told they need spine surgery locally, only to visit a COE to learn they could avoid surgery in their treatment.

Ms. Woods said pre-pandemic that the deficiencies and variation in care — from misdiagnoses to inappropriate care — are not limited to one region. "Unfortunately, it is all over the country. It's everywhere," she said. 

Published Tue, Oct 10 2023 12:00 PM EDTUpdated Tue, Oct 10 2023 1:58 PM EDT

• Microsoft introduced new tools in Microsoft Fabric and Azure AI for health-care organizations.
• The new products can combine data from sources such as electronic health records, images, lab systems, medical devices and claims systems so organizations can standardize it and access it in the same place.
• Microsoft said the new tools can also help eliminate the "time-consuming" process of searching through these sources one by one, so medical providers can focus on care.

Microsoft CEO Satya Nadella listens to an audience member's question during the company's annual shareholder meeting in Bellevue, Washington, Nov. 30, 2016.

Stephen Brashear | Getty Images News | Getty Images

Microsoft on Tuesday announced new data and artificial intelligence products that aim to help health-care organizations easily access and learn from the mountains of information collected by doctors and hospitals.

The health care and life sciences industry is responsible for generating more than 30% of all data produced globally, according to a recent report from Deloitte. But it can be challenging to leverage all that information since it is stored across a variety of different systems and formats. Around 97% of all the data generated by hospitals remains unused, for instance. 

To help address this issue, Microsoft said Tuesday at the HLTH conference in Las Vegas, it developed new health-care-specific tools in Fabric, a data and analytics platform the company announced in May. It can combine data from sources such as electronic health records, images, lab systems, medical devices and claims systems so organizations can standardize it and access it in the same place. Microsoft said the new tools will help eliminate the "time-consuming" process of searching through these sources one by one.

Microsoft has been trialing Fabric for health care with select customers including Northwestern Medicine, Arthur Health and SingHealth, and it is available in a preview capacity starting Tuesday.  

Doug King, the chief information officer at Northwestern Medicine, said Northwestern is still in the process of moving its data into the Fabric system but that the organization is already excited about the potential. 

He said consolidating disparate data will ultimately help health systems improve care and see more patients.  

"Data is king now within health care, and that goes from everything from understanding what's happening in the OR, to how many patients are coming in? How many patients are leaving the house or the hospital? And then how can you get them in faster?" he told CNBC in an interview. 

King said Northwestern is deploying Microsoft's technology thoughtfully, but it could be a "game changer" if it is done well. He said the organization is thinking about future applications such as managing patient flow and staffing, as well as how to integrate broader population health data, such as where food deserts are located, into care.  

"The current state of technology and Microsoft Fabric and Azure and generative AI, all of that, it's going to change the way we live. And it's going to change the way we take care of patients. And it's probably one of the best shots that we have to solve some of the biggest problems we have within health care," he said.  

Microsoft also introduced new tools for health-care organizations within its Azure AI services Tuesday.

The company will offer a new generative AI chatbot called the Azure AI Health Bot, which can pull information from a health organization's own internal data as well as reputable external sources such as the Food and Drug Administration and the National Institutes of Health.

Linishya Vaz, principal product manager at Microsoft Health and Life Sciences, said the chatbot can be used to help staff within an organization ask questions, such as how to treat a specific disease and what the internal protocols and processes are. Patients can also use the chatbot within their patient portal to ask clarifying questions about their symptoms and medical terms they encounter, she added.

"What's also really important is that we built in guardrails and safeguards into this process," Vaz told reporters at a press briefing. "There's a way to verify this information, make sure the customer can do an audit of the answers to see that they are credible."

Microsoft announced another solution called Text Analytics for health, which can label and extract important medical information from a variety of unstructured data sources such as clinical documents and notes. Vaz said the tool will be released in Spanish, French, Italian, German, Portuguese and Hebrew in addition to English.

Finally, Microsoft unveiled three new models within Azure AI Health Insights, which offers tools to help doctors, nurses and researchers make more informed decisions.

The first model, patient timeline, gives clinicians a simple, chronological overview of a patient's medical history by using generative AI to consolidate information from different unstructured data sources.

"You're able to visually see, immediately, there was a medical encounter here, there was a procedure done here, this is the medication that someone took, and [the clinician's] able to get a really good picture," Vaz said.

The second model, called clinical report simplification, allows clinicians to use generative AI to simplify reports full of complex medical terminology into language that patients may understand better. And the final model, radiology insights, aims to help clinicians and radiologists by identifying errors and inconsistencies that can come up across different reports. The model can also offer follow-up recommendations.  

Vaz said Microsoft's new health-care tools within Azure AI will help improve patient experiences and allow clinicians to focus on delivering better care. The new solutions are available in a preview capacity starting Tuesday, Microsoft said.   

When gold miners, pioneers, and others began to migrate to the Pacific Northwest in the 1800s, it soon became clear they would need services like health care and education. In 1856, Mother Joseph and four Sisters of Providence answered that call by traveling 6,000 miles from Montreal to the Washington Territory, establishing hospitals, schools, and orphanages. Over the years, other Catholic sisters transferred sponsorship of their ministries to Providence, helping to create a mission-focused, not-for-profit health care organization that now delivers services across seven states.

Today, Providence runs 51 hospitals, 829 physician clinics, senior services, supportive housing, and other health and educational services, employing more than 117,000 caregivers. As technological advancements continue to transform the health industry, Providence is focused now on simplifying, modernizing, and innovating, using AI and other technologies for increased efficiencies and better personalization of the services it delivers. In doing so, it aims to support the organization’s mission to serve all, especially the poor and vulnerable, and enhance the patient and caregiver experience, according to B.J. Moore, CIO and executive vice president of real estate operations and strategy for the health system.

In a recent discussion with Randy Bush, a principal with Deloitte Consulting LLP, Moore describes what he anticipates for the future of health care, including the role technology is playing at Providence and beyond.

Bush: What is your vision for technology in health care in the coming years? What are the big opportunities?

Moore: In general, health care is probably behind many vertical industries when it comes to technological advancement. So, our tactical vision is to prioritize closing that gap through simplification, modernization, and innovation. Eventually, I would like to see health care play a leading role in the use of AI.

As I look to the future, AI is clearly one of the biggest areas of opportunity. Not only can it facilitate automating and simplifying operational functions like HR, finance, and IT, but it also presents a unique opportunity to improve the effectiveness of our caregivers. We estimate that nurses and doctors currently spend about 50% of their time completing pure administrative work. AI can relieve some of that burden so caregivers have more time and energy to dedicate to their patients.

When it comes to care, our goal is to help patients manage their health needs more effectively and achieve better health outcomes through the use of AI––further advancing our vision of health for a better world.

What types of technology do you expect will play a leading role?

Generative AI is of course the hot topic of the day, but for this technology to be most effective, organizations should have strong building blocks underlying it, and that starts with simplifying and moving data to the cloud. That was step one for us. As part of simplifying our operating environment, we went from 10 on-premise ERP systems to just one in the cloud in 2022. It’s a similar story for our electronic health record (EHR) technology—we now have a unified single system.

It’s like Maslow’s hierarchy of needs—the most basic needs have to be met before achieving higher-level needs. In this case, without a strong foundation, an organization probably cannot breed technological progress and innovation. For us, that foundation has included adopting SaaS and becoming cloud-native. It also includes simplifying business processes and workflows and improving the experience and effectiveness of employees and caregivers.

But it’s important to remember that AI is not a new concept that just showed up in the last six months—we’ve been using it for years. For example, we’ve been using machine learning to schedule nurses predictively. During COVID-19 surges, while remotely monitoring 35,000 patients, we used predictive modeling to identify where cases would surge and when our hospitals and clinics would need supplies, including personal protective equipment. We also use ambient AI devices to supplement doctors’ clinical notes and foster more attentive doctor-patient interactions. On the administrative side, we’re using generative AI to produce job descriptions, though what I especially love about that technology are its reductive capabilities—it can look at an entire medical record or research paper and provide a summation. It’s not just about content creation; that summarization capability is very powerful. Other new developments hold significant potential for health care as well, including smart and wearable devices that empower patients with more control over their health.

Transforming health care comes in many flavors, but overall, much of the focus is on efficiencies. Right now, technology often amounts to one plus one equals 1.5. Our caregivers frequently put more into systems than they get out and view technology as a burden that interferes with the practice of their craft. Our goal is to make technology something that relieves them of administrative tasks and helps them deliver the best patient care possible—in other words, to use technology as a force multiplier that makes one plus one equal five.

What are some milestones you’ve achieved so far? Any tangible benefits or quantifiable results you can share?

In addition to consolidating seven legacy systems and transitioning almost 300 entities to a single ERP system as well as embracing one EHR platform, we’ve implemented three AI solutions and have four more in production. We have a consumer-facing chatbot that can answer a majority of patient questions without requiring the direct involvement of a caregiver, for instance. We’ve also implemented AI for inbox management, using large language models to categorize incoming messages to make them easier for caregivers to triage.

From our ambient AI solution, internal surveys indicate that 69% of providers report an increase in provider/patient face time; 56% of physicians report a reduction in feelings of burnout and fatigue. Our internally developed MedPearl system, meanwhile, includes a knowledge base of over 560 guides and algorithms curated and validated in a no-code environment by our clinician community and engineered to optimize the workflow for specialty care referrals.

What challenges have you faced? How did you overcome them?

One thing that’s really holding us back is the shortage of nurses and doctors. We don’t have enough people coming into those roles. It can take eight to 12 years of education, and today, people are aging out faster than the new generation is joining. If we want to grow and have a bigger impact in our communities, we need to reduce the burnout of those nurses and doctors and improve our effectiveness and operational capabilities. Virtual care can help, allowing nurses who can no longer do rounds to practice remotely from home while helping us reach a broader geography, including rural communities that tend to be underserved.

Another challenge is making the cultural shift toward innovation. Health care in general can be slow to change. As these new AI tools and concepts progress, it’s important to establish an innovative mindset. When we started rolling out ambient AI tools in clinical care, we carefully selected doctors who we suspected would be the most open-minded to using a beta technology with an unpredictable and unproven success rate. Sometimes it will work great; sometimes it won’t. That’s part of the process. Over time, the technology matures, and only then can it be rolled out to other physicians for wider use.

What advice would you offer to peers embarking on similar journeys?

I’ve talked to many CIOs in the industry who are just beginning their cloud journey; some are even still questioning whether the cloud is a fad. To me, it’s not discretionary. You’re going to miss out on the next wave of innovation if you don’t get on board now. But technology is only half the picture; the other half is simplifying business processes. This is a matter of life and death for a health system. At the end of the day, it can help empower the patient and enable caregivers to practice their art. It’s a win-win.

—by Katherine Noyes, senior writer, Executive Perspectives in The Wall Street Journal, Deloitte Services LP

Published on  Oct 6, 2023, 7:00 PM

This article is part of an ongoing series of interviews with executives. The executives’ participation in this article is solely for educational purposes based on their knowledge of the subject and the views expressed by them are solely their own. This article should not be deemed or construed to be for the purpose of soliciting business for any of the companies mentioned, nor does Deloitte advocate or endorse the services or products provided by these companies.

This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor.

Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.

About Deloitte

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the “Deloitte” name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see www.deloitte.com/about to learn more about our global network of member firms.

Copyright © 2023 Deloitte Development LLC. All rights reserved.

Commercial reimbursement is poised for a fade-out and corporate giants may ramp up their demands and scrutiny. Are hospitals and health systems ready? 

Hospitals and health systems rely on commercial reimbursement to supplement the money they lose from governmental payers. Private insurers paid nearly double Medicare rates for all hospital services, on average, according to a KFF analysis of 19 studies comparing Medicare and commercial payment rates. Medicaid fee-for-service payments for physician services are even lower — nearly 30 percent — than those from Medicare. 

This isn't to say that working with commercial payers is anything close to utopia. Their reimbursement rates to providers may be higher than those of their governmental counterparts, but the cost-control tactics they deploy when making payments are disruptive. Throughout the first three months of 2023, about one-third of inpatient and outpatient claims submitted by providers to commercial payers went unpaid for more than 90 days, according to an analysis from Crowe. 

The provider-commercial payer relationship, albeit flawed, allows for the cross-subsidization that determines the financial sustainability of most hospitals and health systems. It is essential. And now, as employers brace for rising healthcare costs, the provider-commercial relationship is also increasingly volatile. 

"The strong U.S. economy and a general labor shortage have collectively served as a great buffer for payers and providers, but in recent conversations with employers and their advisors, we hear that employers' ability to continue to invest in rising healthcare costs is fraying (one advisor described employers as approaching a 'benefits cliff') and they are willing to consider healthcare cost management options they had not seriously considered in the past," Joyjit Saha Choudhury, managing director with Kaufman Hall, wrote in an Oct. 10 analysis. 

Nearly half of Americans receive health insurance through an employer. Average costs for U.S. employers that pay for employees' healthcare will increase 8.5 percent in 2024 to more than $15,000 per employee, according to a projection from Aon. The increase is nearly double the 4.5 percent bump to healthcare budgets that employers experienced from 2022 to 2023.

This forecast builds on recent cost increases: The annual premium for family coverage in 2022 averaged $22,463, with the worker contributing $6,106 annually — an increase of 20% over the previous five years and 43% over the previous 10 years.

There are a few ways commercial reimbursement could weaken, some familiar and some intensified by employers' growing cost burden, according to Mr. Choudhury. Employers may shift more costs to employees via premiums, deductibles, copays and coinsurance or turn to narrow networks. Health plans may ramp up reference based pricing, in which the payment amount for a service is capped regardless of the provider's usual unit cost for that service. Or employers may negotiate "best price" clauses into their contracts with insurers. Most extreme, employers could drop coverage altogether, which has been playing out over the past decade with small businesses with 47% of companies with three-49 employees offering health insurance in 2022, according to KFF.  

Although employers have a menu of cost containment strategies for healthcare costs, they have been slow to use them so far due to fierce competition for talent. Shifting healthcare costs to employees doesn't make for the most alluring benefits package when competing to attract and retain top talent. 

But if and when employers turn up the dial on healthcare cost containment or quality control, providers will feel a variety of impacts either directly or indirectly. Spillover effects include: increased competition and rate concessions if payers narrow network participation; shifts in revenue and volumes if enrollees move from commercial group markets to individual or exchange markets; more cash price-seeking patients; and increased scrutiny or measurement toward quality of care, which varies widely for covered employees. 

An analysis from JP Morgan released in August shared specific examples of the variation in care delivery for employees, finding that in a sample of 809 Ohio cardiologists, among the top 10% of providers, an average of 73% of their patients are taking statins regularly. Among the bottom 10% of providers, about half as many patients adhere to statins. Among 3,121 Texas obstetricians, the instance of a woman with an uncomplicated pregnancy undergoing a C-section ranges from 14% for 10th percentile to 61% for the 90th percentile, depending on the obstetrician who delivers the baby.

Although the clinical variation is stark, managing it is difficult. Neither employers nor employees can reliably learn which physicians are low- or high-performing without provider-level quality data. 

"Even though employers do not often interface directly with health care providers, employers can shift their health plans toward accountable care models, where physicians manage cost and quality across the spectrum of care delivered to their patient panels," JP Morgan wrote in its analysis. "Within these arrangements, provider quality data can be leveraged to both improve a provider's own clinical practices and to facilitate high-quality specialty referrals."

If employers and payers lean more heavily on providers to demonstrate appropriate, high-quality care, it will have been a long time coming. While "value-based care" has been in the zeitgeist for years, fewer employers by name have publicly stepped up to command greater control over the cost and quality of care. This pursuit may have been the stuff of closed-door rate negotiations or health plan network design. But in a time when employers are miscalculating union tactics and demands while seeking stabilized talent, it would make sense if large corporations looked outward and turned up the heat as healthcare purchasers.  

Walmart is one of the few and early major employers to recognize and act on the variation it experienced in employee healthcare. After establishing its Centers of Excellence program in 2013, in which it partners with vetted health systems for defined episodes of care, the retail giant learned of the complete lapses in quality that employees had previously received from healthcare providers that Walmart did not vet or approve.  

Lisa Woods, vice president of physical and emotional wellbeing with Walmart, said in 2019 that 10% of employees who received a cancer evaluation at Mayo Clinic in Rochester, Minn., learned that they, in fact, do not have cancer. They receive a different diagnosis entirely; 55 percent receive a different treatment plan. Some Walmart associates learned that their cancer diagnoses were based on biopsies that were never completed at their local hospitals or medical groups. Another 54 percent of Walmart associates were told they need spine surgery locally, only to visit a COE to learn they could avoid surgery in their treatment.

Ms. Woods said pre-pandemic that the deficiencies and variation in care — from misdiagnoses to inappropriate care — are not limited to one region. "Unfortunately, it is all over the country. It's everywhere," she said.