How will COVID-19 change healthcare over the long term?

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The Impacts of COVID-19 Blog Series

The COVID-19 pandemic has been characterized as a black swan—an event that happens so rarely that it is incredibly hard to predict and even harder to prepare for. With the benefit of hindsight and knowledge of our current reality, this blog series approaches and attempts to answer a series of questions about our present state and our future. The first post dissects the U.S. healthcare system and discusses the structural weaknesses that this pandemic exposed. The series follows with a post on how innovative healthcare stakeholders are responding to these weaknesses with incredible problem solving and resiliency. Building off this foundation, we continue the series with a look forward into the future of healthcare (Part 1, Part 2) through the lens of this pandemic. We conclude the series with the viewpoint of the investment community and unpack what pre-COVID-19 themes will persist or be accelerated and what new categories will emerge.


 It had arrived just in time for the season opener—the Honeywell/Nike collaboration N95c (consumer) mask was styled in her hometown Chicago Bears logo and colors. It was the perfect complement to her upcoming weekend trip to Green Bay for the big game. She didn’t always wear a mask anymore, but in densely populated settings like sporting events, she still took the necessary precaution—like many people did—when virus season was approaching. She made sure to budget extra time for the sterilization and security (S&S) lines, because she hadn’t opted in for Google’s COVID Entry program due to privacy concerns, so subjecting to Amazon’s instant COVIDscreen was the price of admission. These lines had become somewhat like TSA lines in the years following 9/11; incidents were very rare, though not impossible, and the public’s heightened attention coming out of such a jarring event demanded increased prevention visibility.

This anecdote of a “normal” day is just one of the plausible scenarios that will slip into consumers’ lives following COVID-19’s crisis stage in 2020, and the changes we’ll see as an industry will be even more impactful.

In our previous post, we closed by noting that when you’re making healthcare investments for the future, like any investment strategy, a longer time horizon is to your advantage. Here we’ll discuss some of the significant guideposts we predict will come to fruition 36 months from now (and beyond).

While it’s impossible to know what the best bets are on a day-to-day basis, guiding your organization’s conversations and decisions toward these points will be to your advantage.

Embrace the Shift in Consumer Expectations

The opening anecdote paints a picture that we feel will become largely representative of daily life following the COVID-19 crisis management era. While consumers will return to social interaction and patronage of brick-and-mortar businesses, educational institutions and events, they’ll do so with the scars of 2020 still healing. Masks, already prevalent in other countries where airborne infectious disease epidemics are the norm, will not be as common as they are today, but they won’t warrant a second glance either. Offices—and architecture firms/space planning service providers—will reorient around 6-feet distance concepts and sterilization station installations.

Bear in mind that 2020 will understandably solidify in many people’s minds that hospitals are places to be feared, and it will be incumbent on health systems to overcome those fears. Brand association is very much in the balance for attracting patients and the workforce alike, especially in competitive markets.

The New Entrants Will Be Emboldened

From 2020 through 2023, we’ll see organizations with strong balance sheets aggressively acquire distressed hospitals and systems. In simpler times, those acquisitions would quell significant competitive threats. But their most agitated competitive fights will not be with other mega-health systems.

Walmart, Amazon and others will have successfully planted roots in the collective mind of the American public that a hospital isn’t necessarily the de facto place to receive medical care anymore. The simplicity, ease of access and financial viability they offered through the COVID-19 crisis will have built significant public trust when, amid unemployment, millions were told that traditional care pathways and coverage were no longer accessible. This is a massive shift in the collective psyche that will have a material impact on the entire industry’s economics. The Fortune 10 “new entrants” and a shortlist of recently public young companies will also have offered better working conditions for the clinical workforce. They will have solidified their primary care presence and expanded into specialty outpatient services, and will only rely on traditional facilities for surgeries, trauma and other tertiary/quaternary care.

Traditional health systems that heavily invested in building a digital health ecosystem through COVID-19 to advance their digital footprints, consumer value proposition and governance structures will remain the most competitive.

Financial Operations: Goldilocks and the Three Hospitals

Cash on hand will be a metric that shines a light on the immense wealth variance across the nation’s hospitals and places them into three buckets.

  • The first type is huge, wealthy and ready to acquire (over 12 months of cash on hand and access to capital markets).
  • The second type is small and cash-distressed (less than 60 days of cash on hand). For these two buckets, M&A will be the path to the next chapter.
  • The third type falls somewhere in the middle: not distressed enough to be easily acquired, but certainly not in a position to deploy strategic capital. This is the most interesting cohort from an operations perspective.

Expect necessity to drive innovation and transform health systems into entities that resemble scaled versions of today’s “full-stack” tech startups. These organizations will become more assertive in identifying their digital health strengths, opportunities and plans for virtual front-door initiatives.

Pandemic Preparedness and Innovation in Supply Chain Management

If there’s one genuinely net-new tactical skill set gained by health system administrators, it will be improvements in disaster preparedness and infectious disease management. It’s fascinating to revisit how some predicted the need for pandemic preparedness back in 2015. While it’s impressively accurate, theorizing something and actually doing it yield dramatically different lessons in terms of critical details.

What took weeks to organize, set up and deploy in 2020 will be mandated to take days. Facility reconfiguration, military-style portable hospitals and ample emergency equipment for clinicians will be required. What the Titanic did for ensuring available lifeboats on sea vessels, COVID-19 will have done for PPE and ensuring financial resources are available in crises.

The critical investment needed to make this skill set a reality is in supply chain management and analytics innovation. In retrospect, we’ll see that the hospital systems best prepared to respond to COVID-19 were also those that proactively set strategies based on these operating analytics. Look for conference keynotes to attract larger audiences seeking insights into this competency, and for consulting services to be more aggressively marketed.

SDOH Commercial Viability Will Accelerate

In 2019, UnitedHealthcare and the AMA proposed that a new set of “Z-Codes” be added to the ICD-10 roster, enabling a codification of factors such as “Lack of Safe Drinking Water” (Z59.43) or “Unable to Pay for Childcare” (Z59.67) that had actual economic implications. By 2024, social determinants of health codes like these will be leveraged extensively for a few reasons.

Foremost, we will have real and recent data showing the impossible financial scenarios faced when infectious disease hits our communities; and we’re unprepared to manage people and data as one entity. Furthermore, technologists will have a certain carte blanche inaugurated by contact tracing in 2020. By 2024, the power of these data networks will have proven so powerful and lucrative that a “social determinants go-to-market strategy” will no longer be so elusive. HIPAA compliance attorneys and privacy advocates will furiously debate policymakers and tech giants on this point. Even more interestingly, historically walled-garden organizations (i.e., EMR vendors, payers, health systems, etc.) will change their tune and welcome data partnerships as they see the longer term value (and imperative) of data sharing.

The Universal Coverage Debate Will Persist

It’s indisputable that the federal government provided a level of universal aid during the COVID-19 pandemic not previously seen in our lifetime. What will surely be debated, though, is whether that moment in time will denote a “Therefore we must…” sentiment among policymakers in the form of Medicare for All or universal healthcare coverage.

Change in any direction will move slowly. But the recognition that, at least in crisis, we are all connected in health as a society will leave its mark. This will generate additional public support for large-scale change of some variety. Advocates from both sides of the aisle and all sides of the industry will rush in with “the best” healthcare policy proposals. Through all of this, it will be interesting to observe how living through COVID-19 will change the positions of entrenched institutions and lobbyists. 

Mounting Pressures on Labor Satisfaction and Supply

Perhaps the only constituency that we expect to see more volatility from than consumers themselves is the front-line workforce. The pre-COVID-19 environment was already poised for challenges with an aging medical workforce, limitations on medical school enrollments and residency training spots, and burnout-related churn. Early data indicates over 60% of nurses may be flight risks due to the pressures endured during COVID-19. Layer in the assumption that this disgruntled workforce will have more employment options in 36 months via scaling startups or non-traditional care models, and you have the recipe for a labor crisis.

All of these incentives will align to support movement and place pressure on health systems. On the new supply side of the workforce, increasingly debt-conscious students will also face the highly and unflatteringly publicized risks associated with traditional caregiver job environments, leaving the talent pool shrinking.

We expect a shift in the setting of care more than a departure from the industry. But considering front-line care is the backbone of the sector, these shifts stand to cause huge changes in organizational momentum—with the winners being those who put long overdue worksite attributes like culture and balance at the forefront.

Our closing recommendation is this: Build an innovation competency that disarms the fear of change. Then, run right at the problem.

Tomorrow’s customer expectations will be different, but what they value—a shepherd to guide their health journeys—will remain the same. Your decisions and investments can keep this safely at the forefront.

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