A Peer Into The Healthcare Crystal Ball
The Supreme Court ruling on the Affordable Care Act. The building of the Health Insurance Marketplaces. President Obama’s reelection. These were some of the events that defined the healthcare industry during 2012. What will 2013 bring?
Payers & Providers set out to answer this question in webinar held on Dec. 19, 2012. The webinar featured Steven T. Valentine, President of The Camden Group; Henry Loubet, Chief Strategy Officer for Keenan; and Peter Boland, President of Boland Healthcare. Trends in delivery systems, regulatory reform, and technology were all examined by the speakers. While the webinar was focused on California, its lessons apply nationwide.
Valentine began his presenation by focusing on the move from fee-for-service healthcare delivery to fee-for value. He observed that the “clinical integration efforts and the accountable care organizations are really now where people are trying to target where they would like to end up.”
Other trends that Valentine sees regarding the change in delivery systems are continued consolidation of hospitals and physician organizations; more narrow networks, which he thinks will strain operating margins of the hospitals and medical groups; movement from HMO’s to self funded plans; providers moving to own HMOs; and new care models.
Boland covered a broad range of topics and looked at the industry from all angles, though he said his frame of reference was bias toward healthcare information technology because “IT both as a strategy and a tactic is really going to drive everything that we do. We’re not just talking about EMRs and MU we’re really talking about the context for change, IT being the great enabler.”
Within this context he listed 12 leading market trends:
1) Consolidation/scale 2) Payment reform
3) Primary care model 4) Collaborative relationships
5) Quality/process improvement 6) Value-based care
7) Health improvement 8) Informatics/clinical decision support
9) Technology investment 10) Transparency
11) Corporate exchanges 12) Culture change
Boland finished his presentation by speaking about a public policy issue: Physician access. With the Medicaid expansion, and the creation of Health Insurance Marketplaces to go into effect in 2014, the insured populatino will significantly rise. This will create a strain on physician access. Boland says there are three areas where capacity can be increased; different models of care delivery, different roles for providers, and shifting payments.
Loubet focused very closely on what 2013 and beyond will bring for healthcare in California. He noted that the biggest issue in California this year will be preparation for healthcare reform changes set to occur in 2014.
“The impending 2014 implementation of the healthcare exchanges will begin to have an impact on group medical premiums in 2013, especially to public entities,” he said. “The exchange pricing differential to the commercial market, due to the three-to-one age-rating ratio and elimination of gender factor, places group coverage on an unequal footing.”
Loubet also noted employers will have an increased administrative burden from certain provisions of the ACA that will phase in during 2013 including “W-2 reporting, mandatory communications, compliance documentation, and monitoring of hours to determine their staff’s full time/part time status.”
According to Loubet, the ACA also includes some hidden costs such as “the transitional reinsurance fee applicable to fully insured and self-funded programs. Regulations issued in November have set this fee at $63 per participant for 2014, with lower contribution rates to apply in 2015 and 2016.
Loubet said wellness initiatives will gain more interest from employers as a way to manage medical costs. He said these initiatives are a long term strategy rather than an immediate fix, due to a significant upfront startup cost but will “generate a positive return on investment over time, from improved population health, lower premiums and reduced absenteeism.”
Loubet also discussed industry consolidation. Typically, this has come in the form of mergers and acquisitions, but he also noted that this is also coming more frequently via the fusion of provider organizations. He observed that “in California, a trend is developing as some hospital systems (Sutter, Memorial Care) are applying for Knox-Keene licensing to become health plans in their own right. This will bear further study as the line is blurred between payers and providers. Accountable Care Organizations (ACOs) are also growing both out of health plans and the provider community.”
You can purchase a recording of the event “The Healthcare Crystal Ball: California in 2013” as discussed in the article at https://www.managedcarestore.com/ymcol/defcrscd.htm.
