Preface

The healthcare industry is ever-changing and dynamic, with the continued need to balance patient outcomes with operational goals. In 2023, the industry finds itself at a complex crossroads that includes challenges and opportunities. While the global pandemic is now thankfully in our review mirror, the changes it accelerated continue to impact the industry, from employment to regulatory issues. New technology and innovation are creating a forward momentum that can improve patient outcomes and even operations. Yet, the very nature of healthcare means that operations must comply with regulatory issues and maintain the patient protections afforded through HIPAA.

This report provides a comprehensive analysis of these three areas–innovation, regulation, and pandemic constraints–as viewed through the eyes of industry thought leaders. These insights provide valuable guidance for the entire healthcare ecosystem, including providers, payors and vendors who can use this to propel their organizational momentum this year. 

The Transformative Forces Shaping Healthcare

No rear-view mirror is needed to say that the last three years have been particularly challenging for the healthcare industry. From navigating an unprecedented global pandemic to integrating game-changing technological innovations that have the potential to improve patient care and organizational effectiveness far beyond what is currently attainable, healthcare organizations have found themselves in uncharted – and sometimes rather deep – waters.

The COVID-19 pandemic forced the industry to adapt on the fly,  accelerate ideas, and integrate a nimbleness that has been missing from healthcare as we were forced to abandon traditional models. If there’s anything that we’ve learned, it is that there is room for positive change and growth that will improve how care is delivered. 

Uppercentile has focused on three critical areas that continue to drive change in 2023: innovation, regulation and the outcomes of the pandemic constraints we dealt with globally. We’ve taken a hard look at what industry leaders and their organizations are doing, which provides a clear roadmap for others to follow. These are not new trends, but rather those that are having the greatest impact in shaping healthcare in 2023.

Innovative technologies often create new challenges that must be addressed, particularly in healthcare.  Artificial Intelligence (AI) and Machine Learning (ML) are top of mind for leaders like Gianrico Farrugia, MD, president and CEO at Mayo Clinic, and Tomislav Mihaljevic, President and Chief Executive Officer of Cleveland Clinic, but it must amplify care capabilities rather than create new problems.

Innovation

Technological advancement remains a perpetual trend in healthcare, but the advances come with their own unique set of challenges. Gianrico Farrugia, MD, president and CEO at Mayo Clinic, has identified three positive trends in this area that present innovative opportunities for new forms of care: reducing bias in Artificial Intelligence (AI), blurring the lines between care settings, and increasing access to clinical trials – will present innovative opportunities for new forms of care.

“At the same time, efforts to ensure care quality, patient expectations, and advancements in new cures remain top of mind for healthcare providers and other operators,” he said. “Clinicians will need more and diversified data, placing a priority on more effective and trustworthy artificial intelligence (AI) models.”

While Sam Altman, the CEO of OpenAI, has suggested that ChatGPT is capable of acting as a medical advisor for people who can’t afford healthcare, healthcare leaders are viewing AI more as a way to enhance clinician care rather than acting as a replacement. Moreover, there are flaws that need to be addressed.

“Reducing bias in AI and increasing data transparency will be imperative as we look to the year ahead,” said Farrugia. “This will be increasingly impossible to ignore as AI integrates further into healthcare decision making and if AI is to uphold the promise of amplifying clinicians’ skills and knowledge to find patterns in data that go beyond our current capabilities.”

The known bias in AI is a serious threat to health equity, but also to the long-term success of AI as a dynamic tool for patients, providers, and other healthcare innovators, according to Farrugia. Bias in AI can, in part, be attributed to missing patient data from underrepresented patient groups, even as developers and data scientists are constructing models intended to provide accurate, unbiased medical care. Data from these underrepresented patient groups are missing due to long-standing barriers to health care, including lack of access and distrust in sharing of data, among others.

“To be successful, innovations in health care require, above all, trust that they will provide better outcomes for patients,” he said.  “As a result, we must pursue nontraditional initiatives to achieve more breadth and greater transparency within AI models.”

For AI to be an innovative healthcare tool, it must perform equally well across all patient categories. BMI is one area that can skew algorithms. For example, a 2020 cardiovascular study published in JAMA identified that the pooled cohort equations revealed poor algorithmic performance with higher BMI patients. This created a bias that significantly overestimated the risk of atherosclerotic cardiovascular disease in higher BMI individuals. In this instance, instead of improving care, AI could lead to incorrect diagnoses, treatment plans and risk to patient health.

To address these concerns, Mayo Clinic is pursuing a platform approach called Validate that addresses issues such as AI bias. “We also know that we cannot solve this problem alone, which is why we must move away from the traditional, linear pipeline-service-model thinking and to a platform approach, one where producers and consumers from across healthcare can collaborate around shared data to create new insights and solve systemic challenges such as bias in AI,” Farrugia said.

Some healthcare leaders are taking a more conservative approach to AI, such as Tomislav Mihaljevic, President and Chief Executive Officer of Cleveland Clinic. “I think the importance of AI in health care is perhaps overemphasized compared to what it's currently offering us,” he said in his 2022 State of the Clinic address. “Because while AI is certainly important, there are many more tools that, while less interesting to talk about, can have a substantially greater, more immediate impact on health care delivery and care quality.”

That isn’t to say that Cleveland Clinic hasn’t invested in AI and Machine Learning (ML). Mihaljevic says that the clinic uses an ML algorithm in its daily practice to predict which patients have a greater likelihood of readmissions. The clinic is also interested in what AI and ML can do in the cancer space.

“I think another AI opportunity that could really transform health care is voice recognition—the sooner we can get away from keyboards as a major tool for health care delivery, the better off we are,” he said.  “So the list goes on and on.”

He is also equally intrigued by a digital infrastructure that could help the day-to-day management of a large integrated healthcare delivery system like ours. The example he gives is if Cleveland Clinic doubled its size from 200 care delivery sites to more than 400 within a year. 

“How do you coordinate all of that? We don't have a digital infrastructure that helps us to allocate our resources, people, space, and time in concordance with our patients' needs, and there are care disruptions as a result,” he said. “So we're passionate about finding digital solutions that will enable us to use our resources more effectively. So when we look at digital partnerships, we're looking for a much more comprehensive package than just AI.”

Innovation is also fueling improvements on the front end of patient care. For example, UC San Diego Health is the first healthcare system to pilot the use of health insurance QR codes for patient check in. This concept provides a new model for digitally standardizing and modernizing health insurance cards, streamlining patient check-ins, reducing billing errors and providing transparency to patients regarding their required co-pay and medical information.  

“There are more than 1,000 health insurance companies in the United States, each with their own insurance card format,” said Christopher Longhurst, chief medical officer and chief digital officer at UC San Diego Health. “It takes weeks to train new staff members to decipher all those different card formats, and there are often typos, which can lead to rejected insurance claims. Having a common QR code format to scan will streamline the process, reduce errors and simplify insurance documentation for our patients and staff.” 

Regulatory compliance is a perpetual concern for healthcare organizations, especially in 2023, with the expiration of the COVID-19 Public Health Emergency waivers and modifications. And while HIPAA compliance is nothing new for the industry, tracking technologies in digital healthcare apps can result in unintended HIPAA violations. Various healthcare entities, from BetterHealth to Dignity Health and UCSF Medical Center, have found themselves attached to unexpected and costly lawsuits.

Regulations

Among the top regulatory concerns for healthcare executives is the ending of the more than 200 waivers and modifications of health regulations due to the federal COVID-19 Public Health Emergency, which expired on May 11, 2023. According to an American Hospital Association bulletin, the end of the PHE impacts healthcare organizations with:

• Significant changes in payment for many COVID-19-related services;
• Significant changes in how hospitals and health systems could use expansion sites for the care of COVID-19 patients or to keep non-COVID-positive patients isolated;
• The return of regulatory requirements that were waived to ease burdens on the health care system allowing staff to focus on caring for COVID-19 patients, or in the past year, from the tripledemic of COVID-19, influenza and RSV; and
• Varying implementation timelines for reinstating regulatory requirements and other operational changes.

Healthcare organizations can no longer use pandemic waivers for staffing flexibilities and with certain administrative tasks, such as extended timelines for medical record completion and utilization reviews. Health and Human Services has also announced that hospitals can be penalized for noncompliance with certain HIPAA requirements.  

“I don’t think the end of the PHE in and of itself is that significant here on a day-to-day operational basis,” said Chris Raphaely, cochair of the healthcare practice group at Cozen O’Connor, in a Healthcare IT interview. There likely will be a rollback of some of the flexibilities afforded patients and providers with respect to telemedicine, specifically for the reality of COVID, and that rollback may accelerate somewhat with the end of the PHE, but that will still happen over time … The fact is nothing that dramatic happened on the day the PHE ended.”

One regulatory area that should be on the organizational radar is the use of advertising technologies with healthcare apps and connected devices that track patient activity, wellness, and other vital data. According to the Office for Civil Rights (OCR) at the Department of Health and Human Services (HHS), HIPAA Rules apply when the information that regulated entities collect through tracking technologies or disclose to tracking technology vendors includes protected health information (PHI). Some regulated entities may share sensitive information with online tracking technology vendors and such sharing may be unauthorized disclosures of PHI with such vendors. According to the OCR, regulated entities are not permitted to use tracking technologies in a manner that would result in impermissible disclosures of PHI to tracking technology vendors or any other violations of the HIPAA Rules.

BetterHealth, an online mental health counseling service, allowed advertisers to use PHI to market to clients. The company is now banned from sharing patient information and has agreed to pay $7.8 million to consumers to settle charges regarding the sharing of sensitive personal data with third parties for advertising purposes.

The Federal Trade Commission alleged we used limited, encrypted information to optimize the effectiveness of our advertising campaigns so we could deliver more relevant ads and reach people who may be interested in our services,” BetterHealth said in a statement regarding the allegations. This industry-standard practice is routinely used by some of the largest health providers, health systems, and healthcare brands. Nonetheless, we understand the FTC's desire to set new precedents around consumer marketing, and we are happy to settle this matter with the agency. This settlement, which is no admission of wrongdoing, allows us to continue to focus on our mission to help millions of people around the world get access to quality therapy.”

The statement continues with a clarification that BetterHelp denies sharing the alleged information with third parties and that any payment was received for any information about members. 

“As part of our ongoing investment in privacy, betterhelp.com has recently been certified by HITRUST,” the statement concludes. “This certification is the industry-recognized gold standard for providing the highest level of information protection and compliance assurance because of the comprehensiveness of control requirements, depth of quality review, and consistency of oversight. In cooperation with the FTC, we will continue to make industry-leading investments in safeguarding the privacy of our members.”

A similar class action suit was filed against Meta, the parent company of Facebook, for using its Pixel-tracking technology to access patient data. Several healthcare organizations, including Dignity Health and UCSF Medical Center, have been named as co-defendants. Similar data mining has been reported by other healthcare organizations, including WakeMed, Northwestern Memorial, and Advocate Aurora Health, among others.

According to Clearwater, a healthcare cybersecurity firm, healthcare organizations may be underestimating their potential liability. Clearwater reports that, in 2022, the Markup took a close look at the websites of Newsweek’s Top 100 hospitals in America. The investigation uncovered that of those 100 hospitals, 33 were Meta Pixel. With the tracker installed on their websites, hospitals unknowingly sent patient information to Facebook, for example, when website visitors used web-based functions like appointment scheduling. At least seven of the hospitals also had this tracking technology installed on their patient portals, resulting in likely HIPAA violations. 

“What makes this situation especially complex and troubling is that the healthcare organizations themselves may not have been aware that the Meta Pixel Tool had been embedded in its website and/or that it was tracking, comparing and receiving data about patients, including PHI,” said Clearwater’s Vice President of Privacy and Compliance Andrew Mahler in a HealthcareIT News article. “This underscores the importance of performing thorough risk analyses, proper training and education, as well as independent third-party reviews of policies, processes, and systems to highlight potential gaps and risks.”

The COVID-19 pandemic acted as a catalyst in accelerating certain healthcare trends, from the use of telemedicine to employment issues that remain challenging for many healthcare organizations. Kevin Mahoney, CEO of the University of Pennsylvania Health System, and Marschall S. Runge, M.D., Ph.D., Michigan Medicine Chief Executive Officer, note that the post-COVID-19 landscape is making healthcare organizations rethink their normal operations from delivering quality care to staff retention and recruitment efforts. At UW Health, Dr. Alan Kaplan, CEO, says the organization is focused on efforts to encourage future healthcare workers, particularly from underserved populations.

Pandemic Constraints

While the federal COVID-19 Public Health Emergency is officially over, the critical effect it had on global healthcare continues. But some executives see the pandemic less as a disruptor and more as an accelerator.

“So I’ve tried to convince everybody here that there’s no new normal,” Kevin Mahoney, CEO of the University of Pennsylvania Health System noted in a Philadelphia Citizen interview. “What Covid has done is accelerate trends that were already underway.”

With this perspective, the pandemic made everything happening occur “bigger and faster,” which is the theme of 2030, by Mauro Guillén. It’s a book that Mahoney often cites that revolves around accelerants of trends. 

Pandemic constraints fast-tracked the use of telemedicine and virtual healthcare. During this time, Penn Medicine’s Innovation Center launched the COVID Watch app, which allowed providers to monitor COVID patients at home. This helped triage cases, got the sickest care, and kept others home who could safely recuperate on their own. 

Telemedicine itself was not introduced during the pandemic, but the constraints accelerated its use. According to the Philadelphia Citizen, during the first two weeks of March 2020 Penn Health recorded 200 telemedicine visits. That number jumped to one million between March 2020 and mid-February 2021. Penn also deployed the concept of “hospital at home,” during the pandemic, which included home-based chemotherapy treatments. This was already happening in small trial groups, but it rapidly became part of the protocol for cancer patients who could not afford to be exposed to COVID-19 in public settings. The caveat to this? Home-based care does not generate as much revenue as traditional in-patient/out-patient care, which is a new challenge that healthcare providers will need to address.  

The pandemic also accelerated the growing discontent and burnout simmering in the healthcare workforce. From physicians and specialists to aids and support staff, so many have left the profession through career changes and early retirements that there is now an estimated global shortage of nearly 2 million healthcare workers.

Healthcare executives have watched their workforces shrink, which has led to lower patient satisfaction and outcomes. Staffing shortages have led to reduced numbers of procedures, scheduling difficulties and are fueling an accelerated public health crisis. Though the official COVID PHE is over, employee satisfaction surveys at many healthcare organizations are clear: burnout is still happening.

“To use resources effectively, we need to develop concrete plans that will address the underlying causes leading to burnout within our industry and our system.” noted Michigan Medicine Chief Executive Officer Marschall S. Runge, M.D., Ph.D in his “Minute with Marschall” blog series. 

Michigan Medical has identified specific workplace challenges that are leading to organizational employee burnout, including:

• Email usage burdens
• Job demands and lack of available resources that impact teamwork
• A need for new communities of support for parents and other caregivers for co-workers
• Barriers to vacation and sabbatical usage
• Negative impacts of electronic health record (EHR) usage
• Better and more effective strategies to improve psychological safety among faculty and residents

Other healthcare organizations are looking at what can be done to reward current staff and help attract new workers.  Such efforts do not need to be significant to make a difference. The 2021-2022 Employer Gift Giving Report confirmed that 57 percent of surveyed employees said they’re more likely to be loyal and continue working for a company that provides gifts to employees. Uppercentile offers an easy way to reward staff through our curated online shop designed specifically to improve wellness among healthcare professionals.

In his 2022 State of the Clinic Address, Cleveland Clinic’s Mihaljevic noted that inflation is at a 40-year high, and that has a true impact on caregivers. In response to this, Cleveland Clinic has committed to providing the best benefit package in healthcare and adding new incentives, such as bonuses for nurse referrals.

“Cleveland Clinic subsidizes the healthcare plan it offers to caregivers to lessen its inflationary impact,” he said, noting that the system is paying for the majority of the plan’s inflationary increase on enrolled caregivers’ behalf.  

It’s important to recognize the current challenges as well as take a long-term view, which is what Dr. Alan Kaplan, CEO, UW Health is doing with his organization. Shortages exist for all clinical and support positions, with an estimated 3 to 4 million-position national shortfall by 2026. Kaplan said that the healthcare industry needs a new approach to bridge this gap.

“The demand for healthcare is increasing, but the supply of healthcare workers is not,” Kaplan said. “Even those with good insurance may face the prospect that care is not readily available because there are not enough healthcare workers to provide it. This problem is not new … We need to inspire interest in the field, we need to diversify our workforce, we need to create pathways to a career and we need to provide the tools to support staff throughout their careers in healthcare.”

A philanthropic donation from nearby Verona, Wis.-based Epic Systems, is kickstarting a new program that will inspire, train and support the next generation of healthcare workers, with an emphasis on impacting historically marginalized communities. This program includes an innovative nursing recruitment program and the expansion of a community-based healthcare apprenticeship program that is designed to address existing barriers that prevent people from joining and staying in healthcare professions. 

Philanthropic support will enable the creation of a three-part learning path that supports students through the process of earning a certified nursing assistant credential, followed by an associate degree in nursing and a Bachelor of Science in nursing.

Key Findings

AI is not new to healthcare, but the depth to which this technology can be integrated is new.

‍There’s a correct hesitancy in the adaptation of AI technology as biases remain. Fortunately, the industry is proactively addressing the concerns while focusing on ways that AI will improve care quality.

‍Healthcare AI integration requires a broader approach, beyond data applications.

Additional opportunities exist for AI integration within the healthcare setting that are not being addressed yet, including voice recognition, predictive algorithms and digital infrastructure applications. Regardless of how it is integrated, it must remain a priority that AI enhances patient care, not challenges the care strides that have been made.

‍Opportunities for new technological innovations exist throughout the care spectrum.

Technologies that directly improve the patient experience, quality of care, and outcomes are all areas where improvements are needed.

‍The return to pre-COVID regulatory requirements has resulted in little actual disruption.

‍The waivers and modifications that were enacted to ease compliance for organizations have been lifted, though the healthcare landscape has changed. Yet, as this return was anticipated, little disruption has occurred.

‍Unintended HIPAA non-compliance is occurring through the use of healthcare apps that share data with third parties for advertising purposes.

Healthcare organizations are being found liable and the cost can be significant. Training, HIPAA refresher courses and an analysis of mobile and cloud applications can reduce risk.

‍COVID-19 has accelerated trends within the industry, resulting in permanent changes to healthcare delivery.

The widespread adoption of telehealth and virtual healthcare has now become a permanent fixture in how Americans access care. This has created a new problem in that while it expanded care delivery, it has also put pressure on revenue as telehealth/virtual care do not provide the same level of revenue as traditional care means.

‍Simmering workforce issues were compounded by the effects of the pandemic, resulting in severe workplace shortages and even nursing strikes.

This has impacted the patient experience, workplace morale, and interest in healthcare as a career for new workers. Healthcare organizations should consider contingency planning as few entities are likely to escape the impact of these workforce issues.

Appendices

Mayo Clinic

Mayo Clinic has major campuses in Rochester, Minn., Scottsdale and Phoenix, Ariz., and Jacksonville, Fla. The Mayo Clinic Health System has dozens of locations in several states and employs 76,000 healthcare professionals. Mayo Clinic currently treats 1.3 million patients from nearly 130 countries annually.  

Cleveland Clinic

Cleveland Clinic is a nonprofit, multispecialty academic medical center that integrates clinical and hospital care with research and education. The healthcare system has 65,000 caregivers worldwide, almost 6 million patient visits annually and more than 200 locations, including international operations in Abu Dhabi, UAE, Canada, and the United Kingdom.

UC San Diego Health

UC San Diego Health is the only academic health system in the San Diego region and is widely recognized as one of the premier healthcare systems in the United States. The UC San Diego School of Medicine is the region’s only medical school recognized among the best in the nation and in the world, in both research and primary care. The system has six primary locations and employs more than 10,000 healthcare workers.

University of Pennsylvania Health System

The University of Pennsylvania Health System is a major multi-hospital health system headquartered in Philadelphia, Pennsylvania. UPHS and the Perelman School of Medicine at the University of Pennsylvania together comprise Penn Medicine, a clinical and research entity of the University of Pennsylvania. Penn Medicine employees more than 39,000 healthcare workers and has six hospitals, 10 multispecialty centers, doctors’ offices, clinics and sites. _‍

Michigan Medicine

Michigan Medicine includes the University of Michigan Medical School, with its faculty group practice and research laboratories; the university's affiliated hospitals and health centers, including the University of Michigan Hospital, C.S. Mott Children’s Hospital, Von Voightlander Women’s Hospital and approximately 40 health centers and home care services across southeast Michigan; the clinical programs of the University of Michigan School of Nursing; and the activities of the Michigan Health Corporation, through which U-M partners with other medical centers and hospitals to provide specialized care throughout the state of Michigan. More than 26,000 healthcare workers are employed by the various entities of Michigan Medicine.

UW Health

UW Health is an integrated academic health system that is home to the No. 1 hospital in Wisconsin (for the 11th year in a row) as ranked by U.S. News & World Report. The system is made up of seven hospitals and more than 80 clinics across Wisconsin and north central Illinois.

UW Health cares for more than 700,000 patients each year and employs more than 21,000 people — one of the region’s largest employers. Many of the 1,800 physicians are faculty members at the University of Wisconsin School of Medicine and Public Health.

References

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