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Today in health, it combating. No. Uh, consulting. I'll tell you what it is in a minute. But it's prevalent and I think it's problematic. My name is bill Russell. I'm a former CIO for 16 hospital system and creator of this week health. So channels and events dedicated to transform health care. One connection at a time. We want to thank our show sponsors who are investing in developing the next generation of health leaders.
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If you don't know what that is, it's called mentoring. That's. What I used to do is find a podcast or a set of articles, and I would have the person I was mentoring, read those. I would have them talk to me about what they were getting out of it. I would. Talk to them about what I got out of it. And that's just a form of mentoring, of molding the minds of the next generation. Just something you could do with this show.
Hey, do it with any show do with ed marks a show, do it with I dunno, do with the webinars over there at health system, CIO whatever you think is great content, do that with them. I'm all for however you want to mentor the next generation. Of health leaders.
Today, we're going to be taking a look at Deloitte 2020 for outlook for healthcare. Planning for the future of health. Top trends for 2024. We're going to be looking at a bunch of these articles over the next couple of weeks, because they're everywhere. I spent the better part of 20 years of my life in consulting. And one of the things you need to know about consultants is that the consulting world does. You do a lot more consulting business in disruptive times than you do in status quo times. In fact, you have to create that sense of urgency.
Otherwise, it's really hard to get hired. And it's harder to create the sense of urgency then to just have it. At emerge, right? If you do consulting for a company in chapter 11, they are very prone to hire you and very prone to do what the recommendations are. If you can find an industry in complete disruption, digital disruption, or those kinds of things. These are good.
They're looking for people that can guide them and give them help. And so to a certain extent, when you read some of these things, you have to look at it through those lens. That the Deloitte to this world, the Accentures and the others. They make a living off of essentially when there is a need for answers in the industry. And you will go out and hire them because they do a lot of studies.
They work with a lot of different organizations. But that is one of the byproducts of having an organization that has a lot of clients. And a lot of depths and a good knowledge management system internally and good processes. And Deloitte has all these things.
I don't have a problem with the light, by the way, they were my internal auditor at St. Joe's and they were a great. A firm. Like any firm, if you provide them really good leadership, they provide you really good results. If you provide them poor leadership. They generally will give you poor results, no matter how good of affirm they are. It does require good leadership internally, just like any other project that you kick off. I want to take a look
there are five trends. We had a thing called no.consulting. And before we went in and gave a presentation to an executive team. We would have to give it internally to our team. And if we were to say the title of a slide or the, Hey, we have five trends that we've put it up there and somebody would say, No, duh. Then we knew we had to go further.
We knew we had to, find the. The insight. That would make them say, oh, I see why that's important. All right. And so we're going to, we're going to look at this for. Some of that, are we looking at some, no duct consulting? So here's what they did. They. They did an industry survey and they got a lot of stuff back and a lot of people are a little negative on 2024, actually a lot native. If on 2024. It's a pretty significant decrease, even from 2023. Now the people in 2023, who thought it was going to be good, we're probably wrong.
And who knows, maybe the people who think it's gonna be bad in 2024, it could be wrong. Who knows? But let's see what they have five factors. Likely to shape healthcare in 2024.
Let's see many healthcare leaders understand that the status quo is not sustainable. Here are five factors that we expect will continue to reshape the healthcare sector in the year ahead, by the way, that's their point of view.
This, the status quo is not sustainable. That's an important to understand what they're saying is things have got to change because we can't continue on this path.
And they're saying that the industry agrees with this. MNA consolidation and convergence. Now, if I were to just put that up on the slide and that's the title, that would be a no dust slide because M and a consolidation and convergence has been on every trend. For every year, since I've been in healthcare and probably could go back 20 years before that.
And it was on every trend. And the reason is it's just a highly fragmented industry and you're always going to have M and a going on. You're always going to have consolidation and convergence definitely in a down economy. This is not . A significant prediction. In any way, shape or form, I, by the way, I think it is going to happen. But it's not a big prediction, so let's take a look there.
They have the big takeaway. So March healthcare organizations have acquired or partnered with non-traditional industry, disruptors and innovators. Tech giants, Telekom, retail. As they try to meet the needs of the increasingly savvy and more empowered healthcare consumer. We expect this trend to continue as the industry experiences more pressure towards convergence.
Some new entrance unencumbered by outdated business models tend to be focused on meeting consumer needs. Following this mantra could help legacy health systems transcend from business as usual to groundbreaking business models and offerings that meet rapidly changing consumer expectations.
That's interesting. I'm not sure who this note is for. I'm trying to figure is this for a health system, because if I'm at a health system and I'm reading this, I am saying no, duh yes, partnerships is the way to go. I get that. I'm not going to be able to do everything to everybody. Healthcare is very complex.
We need to expand in a lot of different ways. We need to expand geographically. We need to expand virtually. We need to expand into people's homes. You're not gonna be able to do all this yourself and you need to have partnerships need to be strategic partnerships. In fact, that's probably one of the skills that every health system needs more of is people that can start and manage. Great partnerships. And get the most out of those partnerships with that being said, following the mantra. At the end of this thing, you know that we're going to build these transcendent business models by doing these partnerships.
The problem with that is. This is a really hard. Needle to thread. Because , if you partner incorrectly, you could end up disintermediating yourself from your consumer. There are things that every business has to do. They have to connect with their consumer. They have to create experiences for those consumers that make them want to continue to be a consumer.
So you, you create more personal experiences. You create a better outcomes for them. You reduce friction, all those things. Is how you do that. Now the tech companies are really good at that. The retail companies are fairly good at that. They know how to reach these people. They know how to get in touch with them.
Their marketing is far more savvier than any health system. That I know of out there that's doing this. And so if you partner in the wrong way and they could figure out a way to get in between you and the consumer. And take over that space. It might feel good because you all of a sudden have all these new capabilities, but they're not really your capabilities. There that company's capabilities and they now control the consumer, whoever controls the consumer controls to the dollar.
And if they control the dollar. They control the relationship and they're really in the driver's seat. So that's why that's a really interesting needle to thread. It's easy to throw that recommendation out there. It's hard to do. And I don't know, maybe that's the point is, Hey, now you've got to call them to figure out how to do it.
But I think we know that we have to partner and we know that there are some pitfalls in doing that. So M and a consolidation convergence sort of falls into the no dot category. I'm not sure I saw anything in there the next one's interesting generative AI and digital transformation.
Healthcare organizations appeared to be at a midway point in their adoption of digital technologies, cloud data analytics, natural language processing, virtual health. And they cite a report, not surprisingly a majority. Of survey respondents. Expect the accelerated adoption of digital tools will impact their strategy in 2024.
I hope so. At this point, however, these digital components are often added piecemeal. For health systems and health plans to compete in the digital race. Each component should be integrated throughout the organization. Surveying healthcare executives agree that generative AI has potential to address many of the sectors, most fixing issues, access patient, wait times, claims staff burnout and could revolutionize the way healthcare is delivered. Let's see. It's only recently urged healthcare leaders to incorporate generative AI in parallel with other digital technologies.
As they retired legacy hardware and transition to the digital realm, the technologies already. Being used to predict in hospital mortality, like the stay. Medical claims denials. That's not generative AI. It's more machine learning. In other AI models, but regardless. , at the same time, many consumers are already turning to gender AI to help make decisions about their health and wellbeing to locate clinicians, learn about medical conditions, understand treatment options.
It's a great place for generative AI to set. Here's the big takeaway and by the way again, I there's nothing in here that really. If I were writing this about generative AI I know let's get it. Get to their big takeaway. Then I'll come back. Consolidation often leads to significant technical debt as organizations try to integrate disparate it systems. The challenge is expected to become more complex. With continue to industry convergence. Moving to a single digital system and sunsetting, the others can be. Disruptive expensive.
And time-consuming however, as generative AI matures, we could begin to see some measurable improvements in everything from improved efficiencies to better customer experiences. Across all facets of the healthcare sector. aCtually in the M and a section, this is probably the, probably what I would have talked about. I would have probably talked about the tech debt. Aspect of this and at the organizations that have a very aggressive strategy of consolidation following a merger or acquisition are going to be the winners. It, it makes no sense that you're eventually going to get there.
It's going to be 10 years. It can be five years. It can be two years. So might as well be two years. You might as well, just completely rip off the band-aid decide what you're going to do and get there as quickly as possible. We highlighted that. I think it was Bon Secours mercy. After the one of the JP Morgan. Events, their CEO talked about just that strategy within 60 days, identifying the core systems and moving to those core systems. And it's hard to do.
It takes leadership. It takes strong leadership to do it, you're going to get there in 10 years. Anyway, you might as well get there in two and then start to reap some of the benefits. And yes, there are challenges, but if you're going to do the M and a, you could price that into the M and a. As you move forward. And I think that aggressive strategy is one that has to be taken with regard to a mergers and acquisitions, and a lot of organizations move way too slow in that.
So if you're in that space, If I were going to talk about generative AI, I would say, man, get your experience in places that aren't life and death. Start to figure out how you're going to reallocate your workforce. Because a bunch of them are going to be displaced, not displaced, completely parts of their job are going to be moved out.
Okay. So now what do you do. You need to find the things that only humans can do and start to retrain your workforce to be Generative AI supported and enabled and be able to do even more in better and higher order tasks. Then they did before. The other thing is generative AI. I think that the task here is to determine how it's going to emerge. How has she ever say I got to emerge? And it's not only generative AI, it's all the AI models, but I think it's going to emerge like the human brain.
You are going to have a different parts of the brain that do different functions. And what you're gonna have over time is you're going to have all this information that's running across this entire ecosystem of AI. And eventually instead of the middle manager saying, Hey, we should do a study on whether we should do. Only have two knees for the transplants. Reverses having the four.
I think what you're going to have is the information just constantly running over the AI. And eventually it's just going to spit it out and say, look, we could save. $8.5 million a year. If we went to two knees, these specific knees, which are used by 85% of the orthopedic surgeons. Instead of the four needs that we currently carry because of the 15% of the orthopedic surgeons that want to use those knees.
And if you're willing to do the leadership and go out and have those discussions, you're going to be able to reduce our cost by 8.5 million. I think that's how AI is just going to be sitting there. It's going to be a mesh, a framework in the background, the information going to run over it, and it's going to start generating insights for us.
I need to move on. I'm going to slow here. Workforce talent challenges more than half of the system. Oh, my gosh, this is no, duh. Yes, we've had. That's significant challenges. They're going to continue. Let's see what the big takeaway is.
ACtually, we started here most surveyed executives said they intend to focus on mental health. And wellbeing of their employees in 2024. Great. That's fantastic actually. Some organizations have tried to make employee benefit packages more appealing. And are conducting employee surveys to get feedback on these challenges.
If that's what came out of of this. Thank God. Most really good health systems have been doing this all along. We did this. You're constantly at St. Joe's. We constantly had feedback sessions and whatnot. Let's see their big takeaway as healthcare sector evolves, healthcare leaders should ensure that they are able to retain employees who have the skills needed to keep up with the challenging healthcare landscape. They should also try to attract and retain new talent. That is absolutely the worst, big takeaway I've ever seen. Workforce talent challenges are going to be big in 2024. Is it. No, duh and your big takeaway is retain your best employees and hire good ones.
C'mon your big takeaway. On that should be around what we're going to do in order to retain our best employees. What does it look like? What are our best employees moving forward? Have we even thought about that? Maybe what was the best employee before is not the best employee anymore? Cause the technology. The automation is going to start taking over some of these really complex tasks that we used to need a human to sit there and do. But now we have these thinking machines that are able to sit in place there and now all you need is somebody to look over it and say, yeah, that looks right.
That looks okay. And you don't need that high level deep thinking anymore. So do we even know what our best employees look like? Anyway, I think there's a better, big takeaway. Outsourcing and offshoring. Oh my gosh. Every time we have a downturn in the economy. Outsourcing and offshoring comes up. Not that I'm against it, by the way.
I think selective outsourcing has its place. We've talked about it on the show a lot, especially with regard to security, when you cannot find enough. Skilled resources to deliver what is required by your system. You have to look at selective outsourcing. Now complete outsourcing. That's a whole nother game. And what happens in downturns is people go, oh, outsourcing.
We can save some money. We can get people who do this better than us. That's usually the argument. There's people who do this better than us. They do it cheaper than us. We should do it. And eventually it costs you more than it costs you to do it internally. And then you insource about 10 years later. This cycle has been going on. Since I got into the industry, I've been on actually, I've been on both sides of this. I've been on the hay, outsources, that side of it. And I've been on the immediately following an outsource to the insource. And it's a debacle either way. What it requires is strong leadership. Whether you're going to outsource or insource and I don't care, which you do. You have to have strong leadership who understands how to do these partnerships, how to do these contracts, how to manage these outsource or in source arrangements.
By the way, I see people who say you've got to outsource programming because health systems can't do programming. And then I talked to these other health systems that have, 30, 40% programming teams doing amazing things. So it's not like it's not possible if an outsourcer can do it.
So can an insource or. So anyway I'm not a huge fan of this. They're big T there appears to be a growing interest in outsourcing and offshoring, certain administrative tasks. Yeah. Of course It's actually a lazy management style, quite frankly. It's Hey, look, we can save 30, 40% over the next two to three years. But the problem is if you extrapolate it over 5, 6, 7 years that's usually not the case.
And then the last thing is affordability and empower consumers. Big takeaway healthcare leaders have an opportunity to influence consumer health decisions. And potentially drive loyalty and market share by providing digital tools that can help consumers navigate their healthcare journey. Healthcare organizations might consider offering more affordable treatment options, virtual health, digital tools to help ensure patients continue to get necessary care. Cracking the code could increase stickiness and help ensure loyalty.
I'm pretty sure I could have read that in 20 15, 16, 17, 18, 19 20 21, 22 and 23. So to read it here in 24. Is nothing new. And it's a little disconcerting and look, I'm being a little harsh on Deloitte here. Because I do expect a lot from them. And if the, if they gave me this presentation in the boardroom, I would push back on them.
I'd say, I need more details. I need to understand what you think we should be doing. How should we be thinking about. M and a and consolidation , I'm not going to engage you until you give me a little bit more of what that means. Gender of AI, digital transformation. What do you think it's going to look like?
How is it going to emerge in our industry? How's it going to emerge in the call center? How's it going to emerge at the bedside? I'd asked them about work workforce and talent challenges. What is a good employee? Look? What does a good employee look like in what the enterprise is going to look like in five years? Should we be looking at different talents and skills. Outsourcing and offshoring. Are you saying we should outsource this whole thing?
If so, why didn't we do it three years ago? Or why don't we wait for three years? And if they can do it better than us, why can't we do it better than we're doing it today? What is it that we're not doing well and not doing right? And do we not have the right players in place to make that happen?
And affordability and power to consumers has been a challenge, but here's the thing I would say to them is prove to me the connection. I have not seen the connection be proven. I believe it, anecdotally, I believe it that there, that if we reduce friction and we give them digital tools and whatnot, they are going to be more loyal to us.
They are going to come to our system, but I want to see it. I want to see you do a study that this house system implemented these tools. Tools and they're more tied in. I know they're tied in because of insurance. I know they're tied in because of Specific doctors. I've not seen that be the case with workflow, convenience and digital tools.
I haven't seen a proven. I believe it, it can be proven because I believe it's true. But I have not seen it. Anyway. Again, not being critical of Deloitte. You have to get the word out there. You have to write these kinds of articles. But if they presented this to me, I would ask for more. All right, so don't allow no duck consulting.
And if you want to insert your other word. Feel free. All right. That's all for today. Don't forget to share this podcast with a friend or colleague. We want to thank our channel sponsors who are investing in our mission to develop the next generation of health leaders. Short test artists. I parlance certified health, notable and 📍 service.
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