Here are four of many ideas that cropped up in my discussions with CEOs, advisors and investors throughout September with why I think each is interesting to you and your strategy. These ideas relate to the challenges of dealing with an ageing population, AI strategy, exit options and return on investment. All four are topics we will continue to explore in more detail throughout the next 12 months.
#1.
Fix discharge upstream; more money for acute care won’t fix the issue
Every winter the headlines are the same: patients treated in corridors, long emergency department waits, calls for more funding. At any point in the UK, around 13,000 patients are ready to leave hospital but have nowhere to go. Acute care does need investment, but there is more to gain upstream via Community nurses, step down care, physiotherapy and rehabilitation, and stopping patients arriving at an acute setting by default.
Why is it interesting?
Health and social care reform are usually treated as separate issues, but discharge is where they meet. Investing in upstream alternatives frees up acute capacity, and it opens opportunities for providers who can deliver that care. This requires governments to act and to find a way to fund that change, with reform on the docket for many governments across Europe this is starting to look like a real opportunity. The question for many CEOs will be where in your pathway upstream investment would free the most capacity, and whether you are placed to provide it.
Stopping patients arriving by default is an opportunity that doesn’t rely on health system reform but on clever investment by groups in the right technologies and processes. One care group CEO I spoke to has developed 24/7 data monitoring on its patients, coupled with investment in software that alleviates admin burden for care staff. The aim is to predict and prevent patient hospitalisation which benefits both the patients and the system. Another has developed AI for MRI that improves read accuracy, so high-risk post-surgery patients (clot or stroke risk) can be discharged sooner, a common challenge that drives up average length of stay.
#2.
Hone your data strategy before you develop your AI strategy
The pressure to develop and deliver an AI strategy from boards is high; so is the opportunity. Getting it wrong could be disastrous, wasted spend, poor outputs or even expected outputs being completely unattainable. Healthcare organisations are sitting on vast pools of data that most haven’t been able to understand how to leverage to gain efficiency or drive outcomes. Taking the time to organise the data first means that the AI layer will be more effective.
Why is it interesting?
In a race to develop AI capabilities, slowing that down especially if your board is particularly vociferous, is a real test of leadership mettle.
AI is getting better at interpreting unstructured data. And perhaps as the technology advances, it will also overcome the challenge of siloed datasets. A tool that is built on top of this may give confident answers which are incorrect. Healthcare sits on vast pools of data which grow day by day, from clinical to wearables to financial to operational systems. The value is unlocked by taking the time to structure the data into a solid foundation that can be scaled. This isn’t fast; one hospital CEO tells me that they’re nearing the end of a four-year project to structure this data into something they understand.
The real question to put back to the board is instead: ‘What decisions could be made better if we trusted our data?’
#3.
Build a platform you know you can unbundle later
As exits are proving harder, value has to come from running the business better and from being able to carve portions out for sale. There is not only opportunity but a need to think long-term about what you are acquiring or investing in to see the potential to build a platform that can be unbundled further down the line if needed.
Why is this interesting?
According to data from Bain & Company, carve-outs in healthcare have grown on an absolute basis since 2023. This is particularly true where you can separate assets from the core, for example laboratories, home health, digital tools, purchasing or supply chain.
This changes how you think about building a platform. Systems may remain shared, but clear separation of data, contracts and staff makes a future break-up easier to pull off . This also serves an organisation well to consider diversification and utilising these elements to service others in the market. This has been seen in dental chains owning labs, in care businesses carving out home care platforms and hospitals leveraging purchasing power to offer procurement services to others. If this also enables you to increase your payor mix away from a single source or to internationalise the exit value potential is multiplied.
#4.
ROI comes from owning the pathway
Return on investment is becoming increasingly important in an era of increased resource constraint and escalating demand. The more you can start to think about and be involved in a full patient pathway, the more you can control the total cost of care, avoid preventable utilisation and manage the variables that influence outcomes.
Why is this interesting?
Most organisations measure return based on the part that they deliver. The parts before and after shape cost and outcomes equally. Being involved across the pathway lets you do something about it, however it only pays off if you are rewarded for it. Where reimbursement is tied to outcomes or total cost, as is becoming increasingly the case, control of the pathway raises your return. Where it isn’t, you carry the cost of the upstream work which someone else benefits from.
It isn’t practical, or possible for most organisations to own the entire pathway. Partnerships that also contain shared data and coordination can achieve a lot. The question to consider is: what part of the pathway I don’t control drives up my costs the most, and how can I do something about it?