Healthcare trends you need to know for 2023 and beyond (part one)

Healthcare is facing a critical juncture: Forces are challenging access to healthcare and threatening the industry's economic outlook. At-scale innovation is critical to filling the gaps.

The once-in-a-century pandemic forced the healthcare industry right into the eye of the storm. With growing affordability and access to care challenges made worse by provider and staff shortages and burnout, this gathering storm seems like it has the power to turn the healthcare industry on its side, and put revenue and patient care at risk. 

While there isn’t a crystal ball that can successfully predict the future of healthcare, opportunities, progress and optimism are standing on the other end.

In the past two years alone, healthcare technology has made measurable strides—like increasing the continuity of care, massive telehealth adoption across a myriad of specialties, and even patient-billing transparency, to name a few. 

So with all these improvements in rapid time, where do we go from here? 

We sat down with three prominent founders during the annual Medallion Elevate conference to discuss the industry's current state, opportunities for growth, and steps to take that can get us there.

Zachariah Reitano is the CEO and co-founder of Ro, a telehealth company that has a vision of giving consumers more power over their health. Chris Johnson is the CEO of Landmark Health, a risk-based provider group that delivers high quality, in-home medical care to chronically ill populations. And, Harry Ritter is the founder and CEO of Alma,  a mental-health startup that helps therapists manage their practices and contract with insurers.

The conversation is below, and given the breadth of information shared and uncovered, we've split it into two parts. If you're short on time, here are a few quick takeaways: 

  • Examining systematic failures can lead you to what your organization should solve for and create opportunities to do it. 
  • There is ongoing competition over who can best serve providers, patients and payers–it’s fantastic and this new “playing field” in the healthcare system is desperately needed.
  • One exciting trend ahead is that more companies will go from solving one critical part of healthcare operations to creating holistic solutions now that they have their foundational pieces in place.

If you enjoy this material, check out more sessions from the Medallion Elevate event. A lightly edited transcript of the session follows. The conversation has been transcribed and edited to the best of our abilities and please allow for a slight margin of human and machine error. Any questions or concerns, send an email to events@medallion.co for help.

Derek Lo: Welcome, everyone. Harry, Z and Chris. I'm excited to have you all here today. You're all running successful businesses, and despite everything going on in public markets, the outlook ahead for all three of your companies is so promising. We've seen patient care completely transform and evolve, and every day, it feels like a new evolution. So with that, I'm excited to dive into the future of healthcare alongside these amazing CEOs. First, can each of you introduce yourself and give a bit of background on who you are and what your company does? 

Zachariah (Z) Reitano: Thanks for having us, Derek. I'm excited to be here. My name is Z. I'm one of the co-founders and the CEO of Ro. Ro is a direct-to-patient healthcare company that helps patients achieve their goals. Patients can come to us and say, I want to have a child. I want to lose weight, and I want to clear my skin or improve my mental health, or I want to have better sex, whatever that may be. We've built amazing products to help them achieve those goals and deliver the most effective and convenient care. We vertically integrated the business to have a national digital doctor's office. We have ten pharmacies distributed throughout the country and our own CLA-certified lab. The seamless integration between all those things lets us treat patients across the country. We've treated one patient in every single county across the US. So that's a little bit about Ro. I'll popcorn it over to Harry now.

Harry Ritter: I love it. Derek, thanks for having us. Thanks for hosting this awesome conference and conversation. I'm Harry, founder and CEO of Alma. I'm a doctor by background. I started going through medical training and, like many docs, got very frustrated with the system I worked within. I wanted to be part of building some of the innovative technologies and models that could help solve some of those challenges. So I started Alma. We are a business that helps independent mental health professionals build thriving practices. We work with thousands of providers in all 50 states to help them build thriving practices. We help them find great clients for their practice, manage the back office work and the technology, education, and training that goes with, you know, continuing to invest in yourself and become a better clinician. We work nationally with insurance companies around the country to help our providers accept insurance. We manage the entire process, from contracting to credentialing and claims, for them so that they can offload the administrative hassle to us and focus on what matters most, which is getting their patients healthy and well.

Chris Johnson: Thanks, Harry. Derek, thank you for having us. Hi, everyone. Chris Johnson, CEO of Landmark Health. Glad to be here with you all today. By background, I'm a reformed strategy consultant. I started my career working with large health systems and payers, thinking about shifting from fee-for-service to community-based care. I found my way to Landmark, where the mission was to figure out how we can deliver care in the home of patients in a value-based arrangement that dramatically changes the trajectory of care. 

Our model is we provide in-home primary care to seniors with serious illnesses, and we do that by contracting with Medicare Advantage plans or anyone else who has a full risk for a Medicare patient population. We build and operate medical groups that provide in-home primary care. So, physicians and nurse practitioners go into the home and see patients ten to twelve times per year in the comfort of their home, either at their kitchen table, in their living room, on their couch, or even at their bedside to get them the access they need to primary care.

So I'm glad to be here and excited to dig in with you guys about where we think healthcare is going.

What unmet needs are you solving for?

Derek Lo: Wonderful. Thank you all for sharing. I'd love to start with the origin story behind all three of your companies. You founded your companies before Covid-19 and before digital care became widely accepted. What unmet needs did your company solve, and how have they evolved today? 

Harry Ritter: Yeah, for sure. So on my journey to this space, I was training at Mass General Hospital in Boston at this incredible teaching institution where as an intern, I was managing the intensive care unit overnight and all these crazy things that were just unbelievable. 

In my primary care clinic, if you asked me to refer someone from mental health or prescribe basic antidepressants, my eyes would glaze over. It wasn't part of what we learned in primary care. Around that time, I became a solo caregiver for my father. He has since passed away, but during that journey, I discovered the challenges of caring for a loved one. 

The anxiety, the loneliness, and the anticipatory grief have led me down this journey, and through the advice and prodding of my now partner, to seek therapy and explore mental health. 

When I left clinical medicine, I had an opportunity to be one of the earlier clinical team members at Oscar Health. I saw that mental health was a huge challenge across the board. 

Access was terrible. Finding providers that accepted insurance took time. I've always gravitated to understand what's happening for providers and why this problem exists. Like, is there a failure that we can solve? Can we better empower these clinicians? And so I started to spend time with mental health clinicians and realized they were an insanely beautiful, wonderful, compassionate, caring group of people. But in the United States, most providers are independent, solo practitioners and need more support to succeed. So we built a business that put the provider at the center. If we can solve the provider's needs, the system will get better for everybody involved, and can we build a platform that supports these clinicians and delivers their care? 

Our transition to digital health was an interesting one. We launched with software for clinicians and an online directory. As the business evolved and with Covid-19, we needed to adapt and figure out if our North Star is helping these amazing clinicians deliver behavioral services; what does that mean today? 

Today over 90% of care delivered through AMA is virtual via teletherapy or online care. And we've been able to dramatically expand the business and care for more providers by really investing in the incredible promise of virtual care and what it means for access across the country.

Zachariah (Z) Reitano: That's so great to hear. Thanks for sharing. I grew up around medicine, and I can tell this story with a big smile because everyone's doing okay now. But every person in my family, myself included, has had some life-threatening illness at one point. My dad has had four heart attacks and a stroke. I had a congenital heart condition. I had heart disease when I was 18.

My mom has a neurological disorder, and my sister is a two-time cancer survivor with an autoimmune disease. We're all okay. We're lucky because my dad is a physician and saved every single one of our lives.

Our house growing up was far more like a doctor's office and our closet far more like a pharmacy.

And when we went to him, he would handle everything from beginning to end.

And if he couldn't, he would shepherd us through the healthcare system and handle whatever we needed.

I think one of the most significant insights, at least for us, was when your dad is your doctor, yes, they care about your health, but they care about your health in service of you living a happy and fulfilled life.

They care about your health in service of you achieving your healthcare goals. A therapist would have a lot to say about at least my personal North Star, which is to try and recreate my dad with software and keep them alive forever. But that's what I'm trying to do and give everyone that type of care. Right? My dad thought about my health more than I did. He was reactive to my complaints and proactive because he was thinking about it so much.

Regarding how Covid-19 impacted us, in many ways, the problems we started with were the same with Harry and Chris. The issues we started with existed well before Covid-19.

In some instances, they became even more important. There was a mental health crisis. We offer mental health services, some of which have become more exacerbated.

For example, weight loss or managing healthy weight became more important during Covid-19. There were specific products and services directly responding to the pandemic. We were the first company to launch a telehealth visit nationally to assess the risk of Covid-19. We launched Covid-19 tests and did home vaccinations for the elderly and homebound who couldn't make it to a vaccination site.

We built products pre-in response to and then obviously had heightened concern or patients had heightened concern based on the environment. So for us, I think that Covid-19 was eye-opening for many patients and raised the expectations of what they expect from the healthcare system because I believe they all flooded it simultaneously. But ultimately, the problem we are trying to solve is to reorient the healthcare system around the patient and what they are trying to achieve, which existed well before and continues to exist, but potentially has a greater spotlight on it.

Chris Johnson: I have a similar story.

Landmark started many years before the pandemic. It was similar to what Z and Harry were saying.

The pandemic heightened some of the conditions we were trying to solve. Or maybe they were always hiding in plain sight. We are solving the idea that it is really hard to get old in the United States.

Health is a big part of why it becomes tough to get old as we get older. Our bodies require more access to healthcare services to stay healthy and continue our daily routines.

But our system is built around something other than the patient's needs. As Z and Harry discussed, our average patient is about 80 years old and has nine chronic conditions.

They get bounced around the healthcare system. They have almost as many specialists as they do conditions. They spend less time with their primary care physician often than a healthy 30-year-old will as they're navigating different parts of the health system.

No one is asking them, what are your goals of care?

How do you want to continue to live?

What is most meaningful for you? And how do we build care plans around that? And so, as we built our business, it was all about meeting the patient where they are, which is generally their home for our patients. For some, it's a private residence or senior living community, and for some, an institutional setting. 

We look at what's important to that patient and how our medical group can deliver care that aligns with that.

Ultimately, our goal is more than increasing the quality of life but dramatically reducing the number of days folks spend in the hospital or skilled nursing facilities. 

We reduce the number of days in the facility by 20%, plus reductions in hospital days. Our hospital admits 20% plus reductions in skilled nursing days. For folks, that means they're home, with their family and community around loved ones.

It was similar to what you talked about with your dad, Z. The question wasn't about whether someone could do it but rather can you scale it. 

To do that, we needed to take great geriatric behavioral urgent care capabilities and build them into a clinical operating system that could be scalable and deployed consistently across the country and based on evidence-based medicine. 

This way, we could get common outcomes and results for all of our patients and not be as reliant on finding a superhero physician. Instead, we would take the superhero idea, put it into technology, and help upskill the rest of our team so everyone would become superhero physicians.

What skepticisms are organizations facing?

Derek Lo: Incredible, and thank you for sharing openly and honestly. How much skepticism did you face building your organizations, especially early on?

Chris Johnson: Yes. When we started in 2014, it took a lot of work to understand how to send costly resources into the home. 

Today everyone talks about value-based care.

One of the early parts of our business model was about marrying the clinical model, where we knew the best location for care was the patient's home with a business model.

But that way of thinking a decade ago was not as pervasive, and it took a long time to build that narrative, get folks to understand that's how we operate and train our teams, which we need all of our team members to be population health oriented.

You need to care for the patient before you, but be thinking about everyone on your panel. That's where your accountability is. It's a whole new way of thinking about the world. 

Zachariah (Z) Reitano: We received a fair amount of skepticism. We still do to this day. When we launched, we pitched a bunch of VCs and said we wanted to build a patient-centric healthcare system and radically improve life.

We want to help patients achieve their goals, whatever those may be. They expressed it sounded super exciting and asked about where we were starting. When we said we would be starting with erectile dysfunction, many laughed at us.

After our Series A, even as we're growing super quickly, we had 40 out of 43 "no's," and those are the people who legitimately met with us and responded to us, let alone the people that didn't take the original call. 

We have faced skepticism from day one and continue to do so from investors and the press. 

The interesting part is we've faced the least amount of skepticism from our patients. The traditional healthcare system initially responded similarly, and large incumbents were dismissive of new ideas for the classic innovator's dilemma. 

But we have seen the more innovative ones take notice of this direct-to-patient approach, building direct relationships with consumers and individuals and ensuring accountability for the experience you create for patients.

The BDB products that patients use could be better. Optum is an excellent example of this. They launched the Optum store and see and appreciate the direct-to-patient model. I mean, Chris and Henry are also great examples of this. 

The industry's most encouraging and exciting response has just been an attempt to replicate similar models as a patient and a business ultimately. But as a patient, competition over who can best serve patients is generally a good thing. 

So generally, this DDP category has created competition over who can best serve patients. Prices come down, and the quality and efficacy of the products or services improve.

That is fantastic.

And I hope to be the best at serving patients. But if we're not, it means someone else did something better. And that playing field in the healthcare system is desperately needed.

Harry Ritter: Three things created skepticism at the outset for us. The first, mental health as a category today, is hard to remember. When we started the business in 2007 and 2008, mental health was not yet near what it's become, where people are excited to invest, have their name affiliated with, and dedicate their careers to solving mental health. 

The second was focusing on the patient experience and competing over who can serve the patient best. People wondered if it would work or create the type of leverage and value we hoped by being a provider enablement platform.

Very few businesses took the kind of provider first position. There was skepticism about that.

The third area was the relationship between the payers and us.

We have had exciting and thoughtful discussions about this or identifying when it would be better to rebuild from the ground up. There's a massive market with many opportunities for many different ways to make this work. 

But early on, we took a partnership approach to create value for the provider, the patient, and the payer. 

In a venture-backed business, a lot of times, folks will say, well, you know, if you're waiting around to work with payers or build relationships with payers, you're going to run out of money five times over just waiting for your first ten relationships to get off the ground.

We've built trust-based relationships with our pair partners and momentum in those channels to create value.

What top trends lie ahead in 2023 and beyond?

Derek Lo: It's awe-inspiring to hear the level of grit and disbelief in what you're doing. What top trends are you most excited about in healthcare? Do these advances change how you operate your business? 

Zachariah (Z) Reitano: Great question. Initially, we'll see a couple of trends that will happen in parallel. I think about point solutions. 

For example, you would have to get a lab test to refill your prescription. From there, we would mail you a product or talk to the doctor, but it was separate from the other significant components. 

Two to three years ago, we saw a lot of investment in areas or infrastructure companies built to reduce the cost or speed to shift some of those point solutions and connect them. I include Medallion in this. 

Medallion has helped us expand to geographies and build to reduce redundancy in the network far faster. For the trend, we'll see more of this unbundling of certain parts of the healthcare experience to deliver a better sliver. 

You'll see a lot more, given the infrastructure companies. Given the maturity of many startups over the last four or five years, we'll see many bundling the unique capabilities to deliver more holistic solutions now that they have their foundational pieces in place.

So that capability of getting a lab test, using our pharmacy, talking to our doctor, you will see companies like Harry's or Chris's take on risk. 

At Ro, we're putting the pieces together to not only deliver a better part of one experience, the pharmacy doctor visit or lab but to integrate those pieces to ensure that we can look at that patient holistically and promise them an outcome. We can now incorporate doctor's office pharmacy labs and, rather than telling a patient to refill their prescription here, promise them a health outcome where they can achieve their goal. 

Similarly, it's value-based care, but in a direct-to-patient way.

So you'll broadly see we've been building software for about five years. It's integrated vertically. You're going to see companies that were in that first wave start to be able to look at patients holistically and expand from single products to platforms.

And then you're going to see more and more companies be able to leverage infrastructure.

Companies like Medallion and others in the space will start connecting the dots entirely differently and build much better and more comprehensive patient experiences. 

That's the exciting trend we're going to start to see.

Chris Johnson: Those ideas are exciting, and I will add on.

One, the healthcare system as a whole is realizing, coming out of Covid-19, that the workforce is not unlimited. We need to look for solutions that technologically enable things humans have historically done, whether providers and caregivers or administrative personnel, as we go to the future. 

That will drive opportunity because there are labor shortages. That will persist, especially as the aging population will be even larger healthcare consumers over the next decade, allowing options to continue developing more consumer-centric solutions. 

Technology will drive us towards being more consumer-centric if we have the correct type of innovators out there, and it will help to pivot some of the legacy health systems. 

The second big trend is the service element of businesses will continue to be critical.

The phase of pure technology to B to C startup will continue to get challenged as we seek to deliver and guarantee more value. 

That often requires doing more than just being a technology platform. It will need some human service element to it, which can augment the care and care delivery that folks will have. 

That is the last mile that historical B to C tech companies struggled with at the beginning of the previous decade. 

These two themes will create many innovation opportunities over the near term.

Harry Ritter: Those are all great insights. Covid-19 changed the game regarding how we think about the role of virtual care in healthcare. 

Behavioral health is the best example out there.

Early on during Covid-19, about 5% of our total visit volume was virtual. Then from February 27 to April 15, we had the "Covid-19 flip," where the velocity of visit growth didn't experience hiccups, but the bar chart flipped in the other direction, and it has stayed that way. Mental health, in particular, we've seen post-Covid resiliency in virtual care.

We see virtual care as the dominant choice for folks, especially within our community. It creates new opportunities for access and equitable care because there are no longer geographical constraints.

You can see a provider that fits your identity or better fits your clinical need over a much broader geographic span. It also introduces new digital innovations where you could support care in a very offline world without technology having a place to play.

And suddenly, you have this fantastic new universe where you can think about the role of digital therapeutics, digital diagnostics and other support that can augment and support care. So that's one fascinating trend. 

Especially for us in mental health, it's a total sea change. 

The other trend I hope to see is some long-overdue innovation and improvements in the regulatory framework for how we think about enabling virtual care, especially cross-state licensure.

Providers have struggled in this area. It's an unfair burden on clinicians, and it doesn't support the need that's out there.

We need to leverage smarter technology like what you're building at Medallion, Derek, and a more thoughtful regulatory framework to better support this sort of prostate licensure work and some of the other regulatory adjustments around virtual care.

It will be a beneficial trend for all of us.

Part two: Read the group's perspective on shifts they're seeing within this last year regarding what it takes to get investors excited about investing in the future next week.

About Medallion Elevate: The Future of Healthcare Operations

At Medallion's inaugural debut, Elevate: The Future of Healthcare Operations, healthcare executives, founders, and leaders came together and highlighted the collective optimism of an industry that's ready to elevate and advance the industry. 

It represented actionable insights, disruptive ideas, and ground-breaking insights from some of the best healthcare leaders, visionaries, investors, and founders. For more information and to view the sessions on-demand, visit: https://elevate.medallion.co/events/medallion-elevate-2022/registration   

Today and every day, we celebrate the critical endeavors of these health leaders and changemakers. #MedallionElevate

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