Becker's Hospital Review

18 Executive Briefing Sponsored by: A s the American population ages, demand for healthcare services has increased, creating pressure on the entire healthcare sector. This pressure is influencing major shifts in healthcare delivery, such as value-based care, the rise of nonacute care settings and more. Becker's Hospital Review recently spoke with Michele Holcomb, executive vice president of strategy and corporate development at Cardinal Health. She discussed how macro trends are impacting healthcare and how companies are responding. Our discussion happened before COVID-19 had become a worldwide pandemic. We reached out to her again to see how the current situation is affecting the healthcare trends we initially discussed. Demographic changes, technological advances and, now, the COVID-19 pandemic are reshaping the world we live in The United States Census Bureau 1 estimates there are 73 million American baby boomers. The Pew Research Center 2 projects that between 2011 and 2030, each day 10,000 Boomers will reach age 65. The aging of the baby boomer generation is significant from a healthcare delivery perspective for two reasons. First, as people age, they require more healthcare. "In most industries, when demand increases, that's a good thing. In healthcare, however, it's challenging because as costs go up, they eventually reach a ceiling of society's ability to pay," Holcomb said. "This is creating reimbursement pressure at nearly every interface in healthcare." The emergence of COVID-19 has exacerbated these demographic challenges because individuals over the age of 65 are more likely to experience severe illness due to the new coronavirus. The healthcare needs of the nation's older population will increase due to the current crisis. Against the backdrop of the aging population and ongoing pandemic, technology is likely to continue to influence healthcare consumer expectations. Almost every aspect of life has been transformed by the emergence of digital convienences. Digital technology is transforming industries, including shopping, communications and entertainment. Healthcare is no exception. On the scientific front, the ability to map and process massive amounts of clinical and genetic data has enhanced the medical community's understanding of where and how disease happens. This knowledge is transforming the pharmaceutical industry, thanks to new cell and gene therapies or "precision medicine." According to EvaluatePharma 3 , this sector is expected to see enormous growth — up to a 70 percent compound annual growth rate. Experts believe precision medicine will represent around $3 billion this year and could reach upwards of $20 billion by 2024. According to 2018 data from IQVIA Institute 4 , over the past 10 years, specialty medicines grew from about half of the products in the pharmaceutical pipeline to around 65 percent of the launches coming from this pipeline. Overall, these trends were cascading throughout the healthcare ecosystem, from how and where care is delivered to new economic models, improved data interoperability, more robust analytics and more. With the emergence of COVID-19, we are seeing some of these trends advance more quickly. Consumers' desire for convenience is transforming where healthcare is delivered Although hospitals still play a large role in America's healthcare system, nonacute care is gaining momentum. One major driver is the lower cost of treating people in ambulatory surgery centers, clinics, outpatient settings and even at home. Another driver is the convenience factor. Many patients prefer to be treated in locations closer to where they live rather than travel to a hospital. Most health systems now offer both nonacute care sites and traditional hospitals. According to the L.E.K. Hospital Study 5 , about half of health systems had nonacute care sites in 2017; today, it's closer to three quarters. Connectivity in combination with mobile devices is making home- based services like telepharmacy and telemedicine a reality. These are great options if patients feel too sick to leave their home or they want a second opinion. It's also possible to connect people in rural areas with academic medical centers. During the pandemic, the use of telemedicine has risen dramatically. Nonurgent physician interactions are either delayed, cancelled or conducted via telemedicine. This is introducing physicians and patients — including those over 65 years old — to using these digital approaches more frequently. It is rapidly bringing people over the hurdle of trial and adoption. "Technology is enabling access to healthcare in many ways," Holcomb said. "You no longer need to live in certain places to get access to great care, and you no longer have to go to your physician in person, for many aspects of a visit – this is helping people get care, even as they stay at home." While specialty medicines hold great promise, cost pressures are driving new payment models Although cell and gene therapies represent a major advance in how diseases are treated, their economics are challenging, as cell and gene therapies can be extremely expensive. This huge expense is forcing the industry to think differently about reimbursement models for these therapeutics. Value-based reimbursement is emerging, as are new payment mechanisms such as subscriptions. Holcomb said, "Biosimilars are an important area to watch because they may make specialty medicines more accessible to a broader set of patients. As Adam Fein of Drug Channels Institute 6 noted, The U.S. had six launches of biosimilars in 2019 and we are starting to see greater market penetration, particularly among supportive drugs like Epogen and Neulasta." To increase the value and efficacy of healthcare, clinicians need to connect data, not just collect it Improved connectivity means that healthcare practitioners can shift from point-in-time measurements to longitudinal patient data gathered from multiple sources. For instance, patients with How technology, aging populations and a global pandemic are reshaping healthcare — Insights for hospital leaders

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