clipart of a gurney with two IV's
The Future of Hospitals

Driven by Pressure to Cut Costs, Hospitals Shift More Care to Satellite Sites

By Alexander Gelfand

s a frontline medical professional and senior healthcare executive, Anthony Mazzarelli L’03, GR’03 enjoys a unique perspective on the long-term outlook for hospital operation.

Mazzarelli practices emergency medicine in Camden, NJ. He is also Co-President/CEO of Cooper University Health Care (CUHC), a leading provider of health services across South Jersey and the Delaware Valley. As such, he helps lead the organization that runs Cooper University Hospital, where he practices; Children’s Regional Hospital at Cooper; MD Anderson Cancer Center at Cooper; and the Cooper University Physicians faculty practice plan.

From his vantage point as both practitioner and administrator, Mazzarelli sees hospitals morphing gradually into more expansive organizations like CUHC, where more and more care is provided on an outpatient basis. It’s a transformation that is being driven both by the high cost of inpatient hospital care and by changes to the reimbursement models that determine how hospitals get paid.

“The future of hospitals is really the future of health systems,” he says.

A tertiary care center like Cooper University Hospital, for example, must invest in the expertise and equipment required to provide the most acute, complex, and expensive inpatient care (open heart surgery and neurosurgery, for example). That makes it an inherently high-cost setting compared to an ambulatory surgery center or doctor’s office.

Yet American healthcare is moving towards value-based reimbursement models that shift financial risk from insurers to providers, rewarding the latter when they meet specific cost and outcome targets and penalizing them when they don’t.

That is incentivizing hospitals to provide the highest quality care at the lowest possible cost. Increasingly, this means providing care in lower-cost settings whenever feasible, typically as part of a larger health system. In addition to two full-blown hospitals, for instance, CUHC encompasses more than 100 primary and specialty care offices, several urgent care centers, and an ambulatory surgery center.

“It’s about getting the right care in the right setting,” says Mazzarelli, who adds that most health systems derive more than 50 percent of their revenues from outpatient services. “If it doesn’t have to be done in the hospital, do it in an ambulatory surgery center. If it doesn’t have to be done in an ambulatory surgery center, do it in the office. And if you can help patients have it done in their homes, even better.”

The flow of care from hospitals to lower-cost settings is made possible by advances in medical knowledge and technology. Hernia repairs that were previously performed only in hospital operating rooms, for example, are now done in ambulatory surgical centers. And Mazzarelli sees no reason why the trend shouldn’t continue.

“As care migrates away from the costly inpatient setting, hospitals are going to have to be part of a system beyond the four walls of the inpatient hospital,” he says.

Even within hospital walls, however, changes are afoot. Many are technology-related — and the coronavirus pandemic has only added fuel to the fire.

“COVID really has acted like an accelerant,” Mazzarelli says.

Most hospitals, for example, made at least some use of telemedicine before the pandemic hit. But last spring, when personal protective equipment was in short supply, CUHC began using digital devices to provide contact-free care to patients inside its own facilities.

The organization also sped up its rollout of touchless systems to safely bring people back into the hospital —  systems that allow patients to do everything from checking in to paying their bills using their own devices.

Hospital physicians went touchless, too.

CUHC had previously installed medical transcription software developed by Nuance, the company behind Dragon Legal. But when COVID-19 arrived, having hospital physicians share workstation microphones suddenly seemed unwise. So CUHC moved up implementation of a cloud-based transcription service that allows doctors to dictate notes using their own smart phones as mobile mics.

Mazzarelli and his colleagues also began testing an AI-powered virtual assistant that can listen to an exchange between a physician and patient and generate a set of notes complete with doctor’s orders and a properly formatted medical chart. Currently, a live person needs to check the virtual assistant’s work. But the amount of human supervision required is steadily declining, and Mazzarelli thinks that within a decade, such artificially intelligent helpers will be ubiquitous.

“Physicians will never write a note again,” he says.

That part of the future can’t arrive quickly enough. High burnout rates amongst healthcare providers have been a problem for years, and preliminary evidence suggests that the pandemic has caused them to spike. Mazzarelli’s own research — he co-authored the book Compassionomics (The Revolutionary Scientific Evidence that Caring Makes a Difference) — has shown that when healthcare providers make an effort to show kindness and empathy to their patients, burnout rates go down and outcomes improve.

By reducing the amount of time that physicians spend doing data entry (“we see patients for free; we get paid to do paperwork,” Mazzarelli says), AI scribes could allow providers to focus on forging the kind of doctor-patient relationships that protect against work-related stress and improve quality of care.

“I think that this is going to be one of the tools that will really help people connect,” Mazzarelli says.

Mazzarelli also anticipates that AI will make computerized clinical decision support systems more common in hospital settings.

These software tools analyze electronic medical records and other sources of patient data to generate alerts, reminders, and treatment recommendations. Currently, their abilities are quite limited. But the same technological progress that is slowly making AI scribes a reality also points to a future where artificially intelligent decision support systems, fueled by reams of personal medical data from electronic health records and digital monitoring devices, will help doctors prevent patients from slipping into septic shock or suffering adverse drug reactions.

The extent to which these technological trends continue depends in part on the regulatory environment.

The explosion in telemedicine during the pandemic, for example, was enabled by a series of federal waivers that made it easier for Medicare and Medicaid patients to receive telehealth services while allowing providers to bill for those services as if they were delivered in person. Whether those waivers will stay in place remains to be seen. And the FDA’s regulatory requirements for clinical decision support systems are still under development.

But as the sheer amount of data available to healthcare providers continues to increase, there seems to be no putting the genie back in the bottle.

“You can’t expect everyone to fit all of that information into their heads,” Mazzarelli says. “As medicine gets more and more complex, we need technology to help us.”

Alexander Gelfand is a freelance journalist based in New York City who often covers business, science, and healthcare.