At Health Evolution’s 2023 Summit, CEOs from health systems, health plans, and life sciences companies, as well as select policymakers, investors, retailers, and technology leaders, came together to discuss the top challenges and opportunities facing the health care industry—and to chart a path forward together.
Executives and policymakers discussed the interplay between health care and current economic pressures, and they shared strategies for navigating today’s difficult operating environment. They also explored longer-term questions about confronting affordability industry-wide while still driving innovation, and doing so ethically and with a focus on leveraging partnerships to achieve breakthrough discoveries and make societal impact.
Throughout these conversations, four major themes emerged:
- Cross-industry collaboration is vital to moving the health care industry forward;
- The acceleration of innovation in health care isn’t slowing;
- The industry must integrate new innovations and technologies to harness their promise for both health care companies and patients; and
- Focusing on proactive, preventive, and accessible care is imperative.
Click the links below to read highlights from those conversations and learn how leaders from top provider, payer, life sciences, technology, and investment organizations and government agencies are working to drive collaboration and collective action in health care—and where they’re leading the industry next.
Taking Stock – State of the Investment Landscape in Health Care, featuring comments from Meera Mani, MD, PhD, Partner, Town Hall Ventures, and Hemant Taneja, CEO & Managing Director, General Catalyst.
Purchaser Perspectives – Prospects for Reining in Health Care Inflation, featuring comments from moderator Frederick Isasi, Executive Director, Families USA, and discussion leaders Alice Chen, MD, Chief Health Officer, Centene Corporation; Cheryl Pegus, MD, MPH, Partner, Morgan Health Ventures; and Mario Schlosser, Co-founder & President of Technology, Oscar Health.
Accelerating Care Redesign – Confronting the Cost and Sustainability of Care Delivery, featuring comments from discussion leaders Clive Fields, MD, Co-founder & Chief Medical Officer, VillageMD; Laura Kaiser, President & CEO, SSM Health; and Bernd Montag, PhD, CEO, Siemens Healthineers.
Health Policy Spotlight – Major Implications of the Inflation Reduction Act (and Beyond), featuring comments from Mark McClellan, MD, PhD, Director, Duke-Margolis Center for Health Policy and former Commissioner, FDA, and Meena Seshamani, MD, PhD, Deputy Administrator & Director of Center for Medicare, Centers for Medicare & Medicaid Services.
Conversation with Johnson & Johnson’s Joaquin Duato on Future Frontiers in Health Innovation, featuring comments from Amy Abernethy, MD, PhD, President of Product Development & Chief Medical Officer, Verily, and former Principal Deputy Commissioner, FDA, and Joaquin Duato, Chairman & CEO, Johnson & Johnson.
Meera Mani, MD, PhD, Partner, Town Hall Ventures, and Hemant Taneja, CEO & Managing Director, General Catalyst, discussed the infusion of private capital in health care and the industry outlook from the investment perspective. They explored how global and macroeconomic forces are reshaping the investment landscape in health care, as well as the prospects for achieving responsible innovation amid a growing focus on generating societal as well as financial returns.
Taneja noted that investing in health care often is different than approaching investments in any other industry, because in health care, you must have “a mindset of radical collaboration” to create a company or product that aligns with the industry’s needs today. Companies can’t assume they’re going to “disrupt” health care without “working closely with leaders already in the industry to figure out how to insert themselves in a way that’s going to drive the next generation of health care business,” Taneja said.
And those businesses will be focused on building “proactive, affordable, accessible care” with positive consumer experiences, according to Taneja. He explained that, in health care, the “market failure and transformation opportunity” that arose during the COVID-19 pandemic “continues to remain,” so investors are looking at companies that are trying to address those trends and become part of the “next generation of health care leaders.”
Mani said investors need to look for companies and innovations that are scalable and will “provide the greatest lift to health outcomes while generating the financial returns many investors have come to expect.”
But Taneja noted that companies and investors need to think differently about the timeline in which they expect to see returns in the health care space. “In health care, the transformation has to happen on a much longer timeline” than most other industries, he explained. “We need to think about how we build these companies on a 20- or 30-year horizon versus the venture horizon, because otherwise the role of innovation in this space is limited. It will solve incremental problems, but it’s not going to solve structural problems,” Taneja said.
“The Amazon of health care is not a company, it’s an ecosystem that collaborates with each other and grows together toward a common set of principles on a long horizon, and the financing needs to enable that as the architecture of innovation for our space,” Taneja concluded.
Mani said health care leaders across the industry should use their voices to help direct where investments and innovations go next, noting that the “chances of responsible innovation are way better if we have more diversity of thought and more lived experience represented in health care investing.”
“Private capital is going to participate in health care, so you have two choices: either jump in the fray and use your voice to direct it to where you believe it needs to go or watch it happen,” Mani said. She added, “I really hope that more people with ‘shop floor’ experience in health care—nurses, administrators, pharmacists, doctors, social workers, etc.—lend their voices and engage in health care investing.”
In a conversation highlighting purchasers’ perspectives, moderator Frederick Isasi, Executive Director, Families USA, and discussion leaders Alice Chen, MD, Chief Health Officer, Centene Corporation; Cheryl Pegus, MD, MPH, Partner, Morgan Health Ventures; and Mario Schlosser, Co-founder & President of Technology, Oscar Health, explored how leaders across the industry must come together to curb growing health care costs. To set the stage, Isasi highlighted the financial hardships many Americans face when accessing health care, especially as costs continue to rise. “The American public is much more concerned about paying for getting sick than actually getting sick,” Isasi said.
And in response, policymakers are taking action to ease the cost burden on Americans, Isasi said. “The political winds are blowing very hard against health care inflation and, ultimately, the question may boil down to whether the health care sector is going to successfully reform itself or is it going to be reformed?” he said.
Pegus noted that although the United States spends comparatively more than other wealthy countries on health care, the U.S. spends “a third less than comparable countries on preventive and primary care” that could help Americans avoid costly conditions. “So it’s not so much how much we spend, it’s how we’re spending it,” she said.
Pegus said leaders across the industry should focus on solutions that prioritize primary and coordinated care, and she suggested Medicare Advantage (MA) plans could serve as a blueprint for how to move forward. Under many MA plans, “people get food delivered to them, they get access to health care in their homes,” and plans have collected data on how those types of services drive better health outcomes, Pegus said. “So we have figured out how to pay for the right types of outcomes, and we’ve figured out how to also include preventive services to address social determinants of health. But what we haven’t done is brought that to the employer” or other markets at scale, she noted. “We now have to translate that into other parts of our business model,” Pegus said.
Schlosser agreed that the industry has “ideas of what we should be doing differently,” but they’re not necessarily “catching on.” The country’s current payment systems often make it difficult for entities across the industry to embrace innovations that could help the industry transform, he argued.
To solve that problem, industry leaders need to work to decrease fragmentation across the health care ecosystem, Chen said. Currently, the country is a system of “different purchasers who have different expectations,” and they “all contract with the same payers, who are all contracting with the same providers,” but “there’s just this diffusion of focus and responsibility” because there’s no “unified voice on what’s expected in terms of quality outcomes,” she explained. “If we can get multi-payer alignment, multi-purchaser alignment,” and provider alignment around quality of care and advancing population health, that could have a big impact on driving down total costs of care, Chen said.
Pegus added that payers, providers, retail clinics, pharmaceutical companies, and others across the industry must collaborate to take a team-based approach and continue to innovate on new ways to provide care with a focus on prevention. “That type of innovation is what we should be focused on because it changes the entire paradigm shift of how we’re providing care,” she said.
But it takes “all of us aligning,” Pegus said, adding, “This is not a business model that there’s one winner. If we all don’t win, we can’t win.”
As part of that alignment, the industry should shift the way it thinks about patients’ care and coverage journeys to allow providers and payers more time to invest in preventive care and new innovations, Schlosser said. “One of the biggest issues I think payers have in this country is the shortness of the horizon under which they can invest in members,” he said. “We should be much more aggressive about putting people in longer-term care pathways” where patients can stay longer with the same provider and payer, “so that, over time, costs come down,” Schlosser suggested.
Chen agreed and said policymakers could step in to help facilitate more alignment. “I think there is a real role for regulators to step in to address tragedies of the commons issues. So particularly when you have payer churn and when you have changing provider networks, no one entity is going to invest unless there really is a requirement. So I think there is benefit to having the regulatory framework to have everyone aligned to do the right things,” she said.
But overall, Chen said, “in terms of what ails the health care system, we have a lot of the solutions in hand.” The industry just has to have “the will and the discipline” to put those solutions in place, she said. “Innovation is less about the new thing than about integration and doing it systematically in a sustained way with outcomes in mind,” Chen concluded.
In a conversation highlighting providers’ perspectives, moderator Neil de Crescenzo, CEO, Optum Insight, and discussion leaders Clive Fields, MD, Co-founder & Chief Medical Officer, VillageMD; Laura Kaiser, President & CEO, SSM Health; and Bernd Montag, PhD, CEO, Siemens Healthineers, explored the health care landscape’s effects on care delivery. Leaders noted that provider organizations are facing intense, immediate inflationary pressures, as well as structural staffing shortages that could continue to strain organizations for years to come. They discussed how providers can embrace technology and collaboration to address workforce and cost challenges now and create new, innovative paths forward.
Fields said the industry cannot rely on increased spending to solve those challenges, as it has in the past. “I think the one thing I know for sure is the answer is not more money. It’s actually a redirection or redistribution of money” toward new solutions, Fields said.
When it comes to workforce challenges, Fields said the industry must focus on its mission-driven principles to attract new people into health care jobs and leverage technology to streamline workflows.
“When we think about technology, we have to think about how we actually help providers at the site of work and give them what they need to work more efficiently, instead of just adding more and more stuff for them to manage and think about and log into,” he said. To do so, Fields said provider and technology organizations must partner to “think about things from the provider up,” rather than creating technology “that comes from the top down looking for problems to solve.”
“If I step back and think about areas where technology has helped in the primary care arena, online scheduling has reduced our need for phone operators and check-in technology and has removed some of the data-collection tasks so that nurses can actually say hello and establish a relationship” with patients, Fields said. “We would love to see more basic technology that can help remove some of the redundant tasks for physicians and support staff. I don’t think anybody is excited about improving online scheduling or developing new check-in tools, but it’s super important and shouldn’t be neglected,” he added.
Kaiser said “ambient documentation” tools, which use speech recognition technology go transcribe physician-patient interactions, are helping to optimize workflow at SSM Health. “We’ve adopted this at SSM and it’s been particularly helpful for some specialties. The physician is able to actually have a conversation with the patient and not worry about being tethered to their keyboard, which is essential to collecting good background information,” she said.
The technology “also is transforming some information that’s been historically contained in the electronic health record from dark data to usable data,” Kaiser said. “We’re now seeing some applications with primary care for helping to get a better picture of patients that providers can use as the health record goes from one caregiver to another.”
That’s especially useful when it comes to addressing social determinants of health, she added. It’s helping to “provide better care and better continuity for patients.”
Montag said he believes health care organizations are “just at the beginning” of figuring out “the structures needed to optimize” and increase efficiency through technology. “It really requires a different way of thinking,” he said, “and I believe the industry is at a tipping point for the use of technology in health care to accelerate.”
Montag explained that the combination of cost and workforce challenges, as well as an influx of “digital natives entering health care” and new innovations, make the industry ripe for transformation. “I believe that all these things really will help to accelerate the change of mindset,” he said.
The discussion leaders agreed that integrating technology to make systems more efficient could help to address health care’s cost and workforce challenges. However, they acknowledged leaders also must collaborate more across the industry.
According to the discussion leaders, cross-industry collaboration has sparked innovation and new ways for organizations to work together. They pointed to Civica Rx, the nonprofit generic drug company founded by national philanthropies and U.S. health systems, including SSM Health, as an example.
Kaiser explained that “the premise behind Civica Rx was about health systems coming together to solve the wicked problem of difficulty in accessing an affordable, consistent supply of generic medications for hospitals.” It led to a “collective of like-minded organizations joining together to create a generic drug company as an alternative to the traditional channels,” and the results have “upended the industry.”
“It wasn’t anything that could be done by any one individual or organization,” Kaiser added. “It had to be a collective, because by aggregating, it created scale. So we are looking for other big, wicked pain points within the health system and inviting others to join in the collaboration as we identify those” and work to address them, Kaiser said.
In another example, Fields pointed to work VillageMD is doing to build a more seamless experience across primary and ambulatory care providers, pharmacists, payers, and other entities throughout the industry. “We’ve been able to add Walgreens pharmacists to our clinical teams in co-located clinics, and those pharmacists have access to our medical records, so they can unburden the physician of some of their inbox requests,” he said.
“At the same time, we’re working with Cigna to be able to take our expertise in product design and what patients really want—not just from a clinical standpoint, but from an economic standpoint—and bring that information into the room,” Fields noted. “It gives us a much greater opportunity of designing a system from the ground up, from a primary care office up to a payer, as opposed to a payer designing a system and pushing it down,” he explained.
The discussion leaders said testing out new innovations and cross-industry partnerships are important for improving the health care industry at scale.
“It’s about learning what communities need and finding willing partners that are like-minded to figure out how we are going to work at this health care equation together, because it’s complicated and it’s not working as well as it needs to in our country,” Kaiser said. “We’ve got to find a different way because we are not as aligned as we need to be. And it will be helpful if we can continue to break what is in place to come up with new, innovative ways to better improve health care.”
Mark McClellan, MD, PhD, Director, Duke-Margolis Center for Health Policy and former Commissioner, FDA, sat down with Meena Seshamani, MD, PhD, Deputy Administrator & Director of Center for Medicare, Centers for Medicare & Medicaid Services (CMS), to discuss federal efforts to address affordability concerns across the health care industry. They touched on the Inflation Reduction Act’s drug pricing provisions, new rules affecting Medicare Advantage payments, and more.
Seshamani stressed that although the federal government is directing change through new laws and regulations, policymakers don’t want to work in a vacuum. Instead, they’re looking for industry leaders to collaborate with to build and test new, innovative models that will improve the health care system for all stakeholders, especially patients.
“We all share this common vision around advancing health equity, around quality, around access, around ensuring that the dollars we’re spending in health care are driving better care and improved health outcomes. And we really need that to be our true north—as we talk about individual programs, Medicare Advantage, drug price negotiation, value-based care—always remembering what it is in our hearts that led us to go into health care,” Seshamani said. She continued, “At CMS, we want to make sure that all of the people who work with us on this—we are listening to them, we’re engaging, we are bubbling up all of their ideas and really giving them life and a chance to fly.”
When it comes to implementing provisions of the Inflation Reduction Act, for example, Seshamani said industry leaders need to come together with regulators to “make sure that the people who we are all serving get the benefits.” She called out the law’s “lifesaving” provision capping Medicare beneficiaries’ out-of-pocket costs for insulin, saying, “It affects families and communities. And it’s so important in everything that we do that we are partnering and engaging so that we can implement in the most thoughtful, effective way.”
Seshamani also noted CMS’ calls for public comment on portions of the law, including its inflation rebate and drug price negotiation provisions. “We’re really trying to hit the ground running by engaging with everyone involved in this—patients, providers, health plans, manufacturers—because we want to hear from everyone,” she said. “That’s going to be critical for the success of these programs, to make sure we’re really seeing how we can improve access to care, really drive innovation for the types of cures that people need. We need to really get a sense of where there are opportunities collectively for us to improve the market and the health of the populations we’re all caring for,” Seshamani added.
Seshamani called for collaboration in improving Medicare Advantage, as well. She said the program must “drive toward the goals of advancing health equity, expanding access to coverage and care, really driving innovation for whole-person care, and making sure that care is affordable and the Medicare program is sustainable for future generations.”
“And I think that underlies all of the various pieces of rulemaking that have been done,” Seshamani said, noting that’s why CMS has “finalized the health equity index to be able to reward excellent care that’s being provided to underserved populations by plans and looking at prior authorization.”
Overall, Seshamani said CMS is working with industry leaders to identify “common sense ways to continue to improve the program and really engage collectively in continuous learning of where we can make sure that Medicare Advantage as a critical part of the Medicare program is driving toward these common goals that we all have.”
And that extends to the way Medicare Advantage plans are paid. “This is a system that’s been in place for many years and a lot has changed in health care. We need to come together to move forward and have a constructive dialogue about how we can make sure that payments are accurate and are part of driving the next phase in health care in a very important part of the Medicare program—and hopefully help to support the industry’s quality improvement strategy, too,” Seshamani said.
Amy Abernethy, MD, PhD, President of Product Development & Chief Medical Officer, Verily, and former Principal Deputy Commissioner, FDA, sat down for a conversation with Joaquin Duato, Chairman and CEO, Johnson & Johnson, to talk about future frontiers in health innovation.
Duato acknowledged that the health care industry is grappling with significant hurdles. “It’s true that we have many challenges—challenges in the economy, geopolitically and in terms of health equity,” he said.
However, Duato is optimistic the industry will not only survive these challenges, but also create innovative solutions along the way. “I think that history is a succession of cycles, but the direction we are moving in is generally a positive one. Yes, we have a complex economic situation now, but I am optimistic about the impetus in health care and the incredible progress we are making,” Duato said.
He continued, “The COVID-19 pandemic put the importance of health care more at the center and has shown the potential of newer technologies in addressing problems that were previously very difficult to solve. And while we continue to address questions relating to trust in science, and critical issues relating to health equity, I believe the pandemic has served as an accelerator in bringing more investment and innovation into health care.”
Duato believes the shared mission that health care companies and their employees have will drive innovation. “People working in our industry have a sense of pride in what they do and in being able to positively impact health care and patients directly. People have a sense of purpose, and that helps in driving the enthusiasm and energy that is needed to continue to evolve,” he said.
Further, technological progress in health care is gaining steam with transformations in many areas, including telehealth, AI, quantum computing, pharmaceuticals, and medical devices, Duato said. “That’s going to accelerate and optimize discovery and development. It’s going to help us identify and manage diseases earlier. Technology is impacting everything we do and it’s moving exponentially,” he explained.
And that will lead to better care for patients, Duato contended. For example, Duato noted that “providing better tools, such as assisted robotic technologies, or being able to do better preoperative and postoperative planning” will lower rates of surgical complications. And “in pharmaceuticals, we’ve seen the advent of multiple new modalities that are really having a significant impact in many diseases that were difficult to treat. We see cell therapy, we see RNA therapeutics, we see progress in vaccines and in gene therapy. And I believe that combination is going to get us to some cures in areas where we were not able to before,” Duato said.
Abernethy agreed that innovation is accelerating in health care and noted that collaboration across industry stakeholders could help to quicken the pace. “For me, the excitement is starting to think about how we leverage technology in new ways, get governments to do their work in new ways, and allow companies to leverage these elements. Innovation’s going to move faster, and we are going to have faster pipelines to get innovations to patients,” but “we have to have all these pieces working together,” she said.
However, Duato noted there are several challenges to overcome to ensure these advancements are realized, including for example, addressing the health care workforce shortage, the need to keep health care workers informed of new innovations and how to integrate them into care, and the importance of navigating the tension between innovation and affordability.
Cross-industry collaboration is needed to address affordability challenges, Duato said. Referring to the company’s transparency report, Duato explained that net prices for the company’s prescription medicines declined for the sixth year in a row in 2022, but that net prices do not always translate into the prices that patients actually pay.
“Affordability of medicines is not only an issue for the pharmaceutical industry, but also an issue for insurance companies and hospitals, as well. There is significant underinsurance in the United States, which means that patients have high deductibles and high out-of-pocket costs. And at the same time, there’s also a significant mark-up of medicines, which makes it more difficult for patients, too. It’s an issue that needs to be worked on, and it’s one we continue to prioritize,” he said.
Duato concluded that cross-industry collaboration is critical to pushing the industry forward. “It’s very important for companies like Johnson & Johnson to connect with customers, physicians, patients, payers, hospital administrators, government officials, Congress, you name it. When you connect with the outside world, it creates a bias for action, and it focuses attention on change, which I think is essential,” he said.