Healthcare is rapidly changing. What changes can we expect in the New Year?
Forbes magazine annually makes their predictions for changes in the coming year. Last year they were correct in five of their ten predictions. Two more they think will happen next year. What are their predictions for 2019?
- More payer consolidation – Stiff competition in the health insurance industry will lead to greater consolidation. United Healthcare boasts the lowest administrative costs and highest margins, but Aetna and Cigna are close behind. Smaller payers will struggle to retain market share and to compete against others in the Medicare Advantage and Medicaid markets. These smaller payers are likely to be acquired by the bigger players.
- Physician-led Accountable Care Organizations will grow rapidly – The history of ACOs, created by the Obama administration, has been disappointing when led by hospitals. ACOs led by physicians may do better as physicians realize they have much higher earning potential when independent of hospitals. They predict the fracturing of some large health system’s employed groups when the primary care doctors realize they can do better on their own.
- Doctors get less dissatisfied – They believe the health systems have heard the cries from doctors about terrible user experience and administrative burden of electronic health records (EHRs). In order to prevent early retirement of these doctors, they predict health systems will respond by making investments to improve morale.
- Interoperability becomes interoperable – EHR firms are coalescing around standards for exchanging data and CMS is expressing willingness to use regulatory power to drive adoption with the “patients over paperwork” initiative. States are pushing for connectivity as one tactic to address the opioid epidemic and to improve resiliency from natural disaster, necessitating the need to access data.
- Consolidation in digital health – They predict small companies will consolidate with larger ones to achieve product market fit. Large employers are going from being the early adopters, to more willing to rely on their health plan partners who have responded to the proliferation of smaller ones by incorporating them into their standard benefit designs.
- InsureTech takes a lump or two – Upcoding is one are of risk since it has proven to be the fastest way to make money in Medicare Advantage. This has led to a cat-and-mouse game of payers mining charts for uncoded diseases and CMS auditing them and nearly always finding errors and levying fines. Look for more of this in the future.
- Dialysis disrupted – Expect more home dialysis rather than brick-and-mortar centers where patients must spend three hours three days a week in a chair. Look for ways to enable patients to do this at home daily at lower expense and with better treatment. This is already happening in Sweden.
- Telemedicine takes off – They predict payers will finally embrace and encourage telemedicine. Large healthcare organizations like Kaiser and Oscar expect to do more than half of all visits virtually. Telemedicine saves money and makes members far happier than going to a doctor’s office. When Medicare adds codes to reimburse telemedicine it will more than double.
- PBM disruption talk becomes reality – Greater scrutiny of drugs getting marked up after leaving the drug maker is putting more pressure on Pharmacy Benefit Managers (PBMs) to lower prices. The predict the increased media attention on drug prices prompted by President Trump will lead to more transparency in pricing.
- Real progress with new DNA sequencing platforms – DNA sequencing is growing in application and raises opportunity for real progress in lowering pricing. This will open up additional applications and volume as well as erode Illumina’s market dominance.
From my perspective as a healthcare provider, I agree with some of their predictions but not with others.
- More payer consolidation
- Consolidation in digital health
- InsureTech takes a lump
- Dialysis disrupted
- PBM disruption talk becomes reality
- Real progress with new DNA sequencing platforms
- Physician-led ACOs will grow – Not unless there is a growth in non-hospital employed physicians. Current trends are the opposite.
- Doctors get less dissatisfied – Count me skeptical of hospitals showing any interest in the concerns of physicians, especially when they have already spent millions on their current EHR systems.
- Interoperable EHR systems – Count me skeptical this will ever happen, least of all within the next year. Too many vendors with too much to gain from the current system.
- Telemedicine takes off – Depends on Medicare/Medicaid and other providers paying for such services, which is currently poor or non-existent.