What Will Be The Big Stories Of 2016?
Healthcare headlines in 2016 will highlight major changes that will reshape the future for the next decade and beyond. Here’s are some you can expect to read next year:
Insurance Mega-Deals Approved, Blues Align more Tightly to Compete:
The Department of Justice approved the mega-deals allowing Anthem’s acquisition of Cigna and Aetna’s takeover of Humana. With certain provisions, the deals will go forward which means United, Anthem and Aetna will together control 44% of the U.S. insurance market.
Scope and Scale forcing C Suites to Re-focus:
Scope and scale are the new c-suite imperatives across the industry. In many sectors, the traditional core businesses are being redefined. Consolidation is accelerating across the board to achieve scale i.e. Kaiser and Group Health, Walgreens and Rite Aid, Pfizer and Allergan and hospital system-physician integration. Insurers are doubling down on monetizing their data, drug manufacturers are shedding underperforming compounds, and providers are expanding their shared services programs to keep pace.
Health Systems launch Alternative Insurance Program:
Yesterday, CEOs of several integrated health systems announced the formation of a not-for-profit, provider-sponsored national health plan that’s “consumer friendly, price competitive, and fully integrated in local systems of health.” The plan will offer multi-year agreements to individuals, employers and government payers, and operate as a taxable not for profit with net proceeds returned to local providers and members.
Drug Costs Spark Action:
Drug costs are driving health spending higher. CMS reported that drug spending increased 12.2% last year while overall spending increased 5.3%. States saw their Medicaid drug costs spike 24% last year—the biggest single year increase in reported history.
Congress is investigating reforms of the drug industry that depends on the $374 billion U.S. market for half its global revenues. Among options, allowing importation, patent reforms and tax credits for expeditious market access to biosimilars are being discussed.
Obamacare Opponents Lose SCOTUS Challenge:
The complaint—that Little Sisters of the Poor should not be required to comply with federal noticing requirements about its contraception religious objection—did not muster SCOTUS majority support. This marks the third major High Court decision upholding the Affordable Care Act on the heels of NFIB v Sebelius (2012), King v. Burwell (2015). Opponents of the law said they’d continue pursuit of its undoing through the courts.
FDA calls Smartphones Medical Devices:
As smartphones capture and distribute biometrics and collect genetic, lab and diagnostic data from biodegradable chips in medications, smart implantable devices and others, the FDA determined that infomediary devices merits its scrutiny. Smart phones tap into elegant cloud-based clinical algorithms that provide relative risks and estimated accuracy of diagnoses and treatments in real time, and access to profiles of clinicians and care team that get the best results at the lowest costs locally or elsewhere. These devices in the hands of patients might supplant physician judgment and change the course of treatment for millions. The FDA convened an advisory council to consider its policies going forward.
Employers intensify Pressure to Reduce Costs:
Led by Loews, Boeing, IBM, GE, Walmart and their Fortune 100 peers, big business is ramping up efforts to extract more value from the health system. Referencing the spike in spending last year, major employers are becoming more aggressive in direct contracting with local systems of health, employing primary care providers in their companies, auctioning high-cost acute events i.e. joint replacements, open heart, et. Al. Regional providers guarantee lowest costs and highest outcomes, shrinking employee benefits to high deductible plans channeled through private health exchanges.
Stay tuned. No doubt, there will be surprises, but the biggest would be a quiet year in healthcare. It’s unlikely. Healthcare will be in the headlines in 2016.
Paul H. Keckley is Managing Director of the Navigant Center for Healthcare Research and Policy Analysis. A version of this article originally appeared on The Health Care Blog.
