The Evolving Healthcare Landscape


By Kristy DelMuto, LLR Partners

As part of ACG Philadelphia’s Industry Vertical Roundtables, four local healthcare leaders engaged in a discussion on the evolving healthcare landscape and opportunities to improve outcomes in the U.S. The roundtable was moderated by Andrew Garibaldi, Managing Director, Healthcare, L.E.K. Consulting.

Featured Speakers:

  • Heather Helle, CEO, DermOne Dermatology
  • Adele Oliva, Founding Partner, 1315 Capital
  • Scott Perricelli, Partner, LLR Partners
  • Eric Steager, Director, Corporate Development and Innovation, Independence Blue Cross

Evolving Care Delivery Landscape

Consumer demand for better quality, value and transparency is changing our healthcare delivery landscape, but the way the industry responds is still largely in question due to a confluence of factors that span people, culture and technology.

Admitting that she, like millions of others, goes to a Redi Clinic more often than primary care and then sees specialists as needed, Oliva highlighted that we must put more power in the hands of consumers to make their own decisions, if we are also making them responsible for more of the costs. A key player in this equation now is the ancillary provider who has increasing touchpoints with patients. Helle, who ran the Healthcare Clinics for Walgreens, said that CVS and Walgreens, for example, have the opportunity to be at the center to their customers’ care, not only from behind the pharmacy counter but also through on-demand urgent care as well as prevention and wellness services.

Health systems and employers taking on wellness management is where one of the biggest opportunities to improve value lies, added Oliva. By offering employees solutions and incentives to improve their health, they can lower per employee costs and keep people better engaged in their care.

But how do we provide consumers with pricing transparency when reimbursement information remains siloed with the payers? Physicians are being asked to play a role in the business side of care, but as Perricelli pointed out, they don’t have access to pricing at the time of a patient visit.  Physicians went into medicine in treat people, and patients just want to get better. How can we expect them both to be financial experts, too?

Steager summarized the solution by declaring that technology is how we manage quality vs. cost – it is in how we collect and, most importantly, share data that will drive us toward better outcomes and lower costs [Read the take-aways from the Data Analytics Roundtable]. But proper adoption of technology will only occur when payers and providers align their cultures and incentives under a common objective, and consumers are fully engaged in their health.

Physician Practice Consolidation

The current consolidation wave is proving different from the 1990s bubble. Perricelli thought high deal multiples would have come down by now, but today he believes we are still in the early innings. The market remains frothy and the real value is created in how you support growth after a transaction. The private equity model can help smaller practices better access technology, navigate reimbursement and leverage surgery centers over hospitals, while enhancing their ability to compete for new patients.

Among the hottest specialty areas are dermatology, ophthalmology and dental. In dermatology, Helle and Perricelli explained that an aging population, demand for ancillary services and consumers’ willingness to pay out of pocket have made the opportunities for growth and investment attractive. From the physician’s perspective, a generational shift toward younger doctors desiring to be free from running a business, take on less risk and achieve better work/life balance is also driving significant interest in the employer-based model.

Healthcare Technology

HCIT innovation is driving technology into the home, enabling cheaper and better access to care for the consumer. Telemedicine and wearables, for example, allow providers to monitor the chronically ill and get information to patients to help them make better health decisions. These are often early stage businesses, Perricelli explained, but exciting areas to watch as they drive down costs and improve adherence. But the group agreed – we must remember that the risk profile and tolerance threshold for technology in healthcare is significantly greater than in other industries where human life is less at stake. It will be a long-term effort to produce safe, viable solutions to our healthcare shortfalls.

Steager shared that IBX and Comcast are in the early development stages of leveraging technologies already in the home to bring care and diagnostics to patients. The promise here is extraordinary but the roadmap still in development.

Leading Innovation from Outside the Industry

Despite the tremendous work to improve quality from within the healthcare industry, game changing innovation will come from the outside, many at the table agreed. Enterprises like Amazon, Google and Apple have the data, capital and distribution capabilities to be fundamentally disruptive in healthcare – but not quite yet, Steager argued. Oliva believes the complexities in healthcare, particularly around pharma distribution, will play an important role in shaping how a player like Amazon makes its way into the space. Pharmaceuticals may not be the ideal first step but more commodity products delivered to physician offices could be a more natural point of entry given Amazon’s foothold in consumer distribution.

On the contrary, others in the audience argued that there is too much risk to human life for a large non-healthcare company to take the lead. One mistake due to a lack of medical understanding is life threatening. Where we need to deepen the conversation is around quality – circling back to Steager’s earlier point about the need for alignment, only after payers, providers and consumers are engaged in a common discussion about how we achieve quality care at a lower cost will we see the desired outcomes.

What You Need to Know

From our big pharma, payers and technology companies to the startup community, Philadelphia is at the epicenter of the greatest region in the world for healthcare innovation and investment, Oliva asserted. We have the talent and the drive to revolutionize healthcare in the U.S. but change must happen at all levels, from the macro payer/provider relationship to the individual consumers’ daily health decision to take the stairs, not the elevator. Creating lifesaving therapies and technologies comes with a price tag, but with better alignment of our efforts and objectives we can balance the quality vs. cost equation.


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