Recent research points to the fact that the Healthcare industry will continue to be driven by three major trends in 2016 – Consumerism, Cost Reduction, and Increased Value.
Let us take a closer look at the issues driving these healthcare trends:
- Cost Control – With the healthcare system facing a rising trend in costs (e.g. US healthcare expenditure is expected to be approximately 18% of GDP in 2016), there is a renewed focus on controlling costs across the board. To curb this rise, the healthcare system is adopting multiple measures such as value-based payments, with some of the major insurers such as Aetna targeting to convert at least 50% of their provider contracts to value-based payment models over the next two years. Similarly, the industry is also seeing an uptick in the investments in analytics that will help in identifying areas to improve quality and reduce cost of care.
- Mergers & Acquisitions – The payer industry will see a huge consolidation with Centene – Health Net, Aetna – Humana, and Anthem - Cigna deals expected to close 2016. In order to accelerate gains from these transactions, the payers will have to ensure that their post-merger integration roadmap is well thought through. Information Technology will play a key role in the integration, with rationalization of the post-merger IT landscape being an activity of prime importance. A key outcome out of this consolidation will be that with a reduced number of players, insurers will now focus on differentiating on the basis of greater access, better health outcomes, and lower costs.
- Data Security – With the explosion of connected medical devices, both manufacturers and consumers need to be aware of potential data compromise scenarios. Recent polls indicate that, nearly 62% of consumer’s value device security over the ease of use and over 50% consumers say that they would be apprehensive of using a manufacturer’s device after a hacking incident. Therefore, manufacturers need to be proactive in identifying failure points and preventing security failures within their devices.
- Mobile Health Applications– Adoption of healthcare apps has doubled between 2013 & 2015. This includes both healthcare apps on mobile devices and wearable devices that transmit data regarding the wearer’s vitals. With the rise in healthcare costs, the consumer is now expected to be an equal partner in his/ her care. Hence, we are now witnessing a plethora of devices and apps which enable real-time tracking of vitals by the patients and near real-time intervention by physicians as needed.
- Regulations – Newer regulations such as Medicare Access & CHIP Reauthorization Act (MACRA) are changing the way the healthcare industry looks at payments. MACRA will accelerate payment reform in two ways – Merit-Based Incentive Payment system (MIPS) and Alternative Payment Models (APM). The MIPS program combines parts of the existing quality reporting programs based on multiple criteria. The APMs include new ways to pay providers for the care given to Medicare beneficiaries.
- Analytics – With the industry adopting tenets such as value-based pricing, consumerism, and connected devices, there needs to be a strong data-driven base to support these initiatives. Analytics solutions include an ability to provide both customized and executive-level dashboard reports, with drill down capabilities into patient and member-level records. The analytics roadmap of healthcare organizations will include efforts on managing data quality and warehousing, developing customizable reports, and refreshing report data on a timely and secure basis.
- Top health industry issues of 2016 – PwC
- 2016 Health Plans & Healthcare Provider Industry Outlook – Deloitte
- Health Affairs Blog – Six Big Trends to Watch in Healthcare for 2016