Is AI Hype Distracting Us from Other Big Changes Impacting HCPs?
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By Joe Shields, President & Co-founder, Health Accelerators
Published July 16, 2024
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How healthcare providers (HCPs) consume information, make prescribing decisions, and run their practices has radically changed due to the growth of “corporate medicine,” use of health IT platforms, and growing trend of private equity (PE) acquisitions.
And, due to the advent of AI and all its hype, we are now faced with new dilemmas. For example, is it beneficial for a doctor to use ChatGPT to summarize a clinical study because more of her fellow clinicians will likely read about the research, or does using the AI program run the risk of missing the nuances of the trial design or burying the key findings?
Have pharmaceutical marketers kept up with these changes by using new approaches to their age-old challenges of getting attention, changing perceptions, and driving new behaviors?
While industry pundits make daily predictions about the massive impact of AI on clinical development and the practice of medicine, let’s review other recent trends that have quietly but profoundly changed how HCPs manage patients and their practices, make prescribing decisions, and respond to pharma marketing.
The Cost Conversation
There has been a fair amount written about this trend, but a pediatrician onstage at Publicis Health Media’s (PHM) 2024 HealthFront event brought this concept to life for me. Preeti Parikh, MD, said, “I’ve been practicing for over 15 years. When I started, cost conversations weren’t always top of mind. But now, in every patient encounter, we talk about cost. It has also become a bigger factor in my decisions about treatment plans. And I’ve seen a dramatic increase in the amount of time and energy my staff puts into prior authorization, pharmacy calls, and calls between my colleagues and patients about other medications when they can’t afford them.”1
Like many tasks already added to their workloads over the past decade, HCPs don’t get paid to counsel patients on paying for their care, including prescription medications. Yet part of the reason they do it is to provide options for their patients beyond insurance, like manufacturer copay programs or pharmacy discount cards that reduce out-of-pocket costs and increase the likelihood that patients will pick up the drug at the pharmacy, take it as prescribed, and get their refills as needed.
HCP-as-Employee
The trend of “corporate medicine” in which healthcare providers leave private practice to become employees continues to grow steadily.
According to data on physician employment trends from Physicians Advocacy Institute, only 25.8% of physicians were employed by hospitals or health systems in 2012. By January of this year, that number had increased to 77.8%.2
Corporate ownership can reduce autonomy for individual physicians, even experienced ones, by centrally deciding which tests to order, which treatment protocols to follow, and which medications to prescribe. HCPs may be less willing to go out on a limb to advocate for a patient whose illness does not neatly fit into approved protocols, or whose insurance is inadequate for the required treatment.
Health IT: The Enforcer
Health IT platforms and software like electronic health records, e-prescribing, clinical decision support, and population health management tools are linked with the HCP-as-employee trend. On the plus side, corporate ownership may mean that more HCPs have access to sophisticated, evidence-based tools that educate them about best practices and guide care decisions for various medical conditions, including ones they may not see very often.
In addition to doing what they advertise, these tools often perform another important function for hospitals and large healthcare system administrators that employ physicians: they keep prescribers in line. These systems and their algorithms are the electronic enforcers of formularies and clinical protocols that help hospitals and health systems standardize evidence-based treatment, maximize contractual value with pharma companies, increase care coordination, and reduce their cost of care.
For pharma marketers, this means that if your drug is not on the institutional formulary, it may be prevented from appearing as an e-prescribing option. No amount of detailing, emails, or journal ads can change the fact that at the point of prescribing, your brand may be invisible.
The Private Equity Effect
According to a report authored by the American Antitrust Institute and others, PE acquisitions of physician practices increased sixfold over 10 years, from 75 deals in 2012 to 484 deals in 2021.3 In addition to potentially large payouts, physicians who sell their practices to PE firms may do it to offload their large administrative burden (eg, staffing, insurance, debt collection, prior authorization, etc.) to the new owners.
Data from the Private Equity Stakeholder Project reveals that approximately 460 U.S. hospital are owned by PE firms, representing 8% of all private hospitals and 22% of for-profit hospitals.4
Moreover, a study published in JAMA showed that PE acquisition was linked to a 25.4% increase in hospital-acquired conditions among Medicare beneficiaries, the most common of which included falls and central line-associated bloodstream infections.5 These data possibly suggest that PE firms may prioritize financial performance over healthcare measures of success like patient safety, utilization, quality scores, and health outcomes.
AI will continue to disrupt healthcare and pharma marketing in ways we cannot imagine. However, we cannot let that distract us from responding to other important trends that have disrupted how HCPs learn, think, act, care for patients, and earn a living.
- Parikh P. HCP perspectives: Access challenges in treating diabetes and obesity. Presented at: PMH HealthFront 2024; April 10-11, 2024; New York.
- Physicians Advocacy Institute. Updated report: Hospital and corporate acquisition of physician practices and physician employment 2019-2023. Available at: https://www.physiciansadvocacyinstitute.org/Portals/0/assets/docs/PAI-Research/PAI-Avalere%20Physician%20Employment%20Trends%20Study%202019-2023%20Final.pdf?ver=uGHF46u1GSeZgYXMKFyYvw%3d%3d. Published April 2024. Accessed June 27, 2024.
- Scheffler RM, et al. Monetizing medicine: Private equity and competition in physician practice markets. Available at: https://www.antitrustinstitute.org/wp-content/uploads/2023/07/AAI-UCB-EG_Private-Equity-I-Physician-Practice-Report_FINAL.pdf . Published July 10, 2023. Accessed June 27, 2024.
- Private Equity Stakeholder Project. Available at: https://pestakeholder.org/private-equity-hospital-tracker/. Accessed June 27, 2024.
- Kannan S, et al. JAMA. 2023;doi:10.1001/jama.2023.23147