February 10th, 2014
While today’s news is bombarding us with headlines about Healthcare.gov, the Affordable Care Act isn’t just about insurance coverage. The legislation is also about transforming the way health care is provided. Consequently, it has ushered in new competitors, services and business practices, which are in turn generating substantial industry shifts that affect all players along health care’s value chain. Following are some of the top trends that our alliance is preparing for in 2014:
Chronic Care, Everywhere. It’s no secret that providers are moving quickly to implement accountable care organizations (ACOs). Recently, the Premier healthcare alliance released a survey of hospital executives projecting that ACO participation will nearly double in 2014. As providers work to improve their way to shared savings payments, look for a more intensive focus on the biggest health care consumers: those with multiple chronic conditions.
Since each chronic condition increases costs by a factor of three, managing this population is the sweet spot for the ACO, and the deepest pool from which to pull savings. To do it, an increasing number of providers will deploy Ambulatory Intensive Care Units (A-ICUs) or patient centered medical homes as part of their ACO, which will be charged with better managing chronic conditions exclusively within a clinically integrated, financially accountable primary care practice. As part of the approach, providers will develop care pathways for better managing chronic conditions and behavioral health needs, with an eye toward lowering hospital utilization, including inpatient bed days, length of stay, admissions, readmissions, and ED visits.
Put Me In, Coach. As an outgrowth of the need to manage chronic conditions, we expect new forms of health care employment in 2014. For instance, early adopters of the A-ICU care model report that their biggest asset in the effort to manage chronic conditions isn’t a nurse or a doctor, it’s a health coach.
Health coaches function like a personal trainer in a gym; they’re there to motivate, challenge, inspire, and listen. They complement medical professionals providing care; they get to know the patient one-on-one and keep clinical staff apprised of issues that wouldn’t come up in a doctor’s appointment, including financial struggles, problems with housing, family concerns, or any other obstacle that could stand in the way of someone following a prescribed care plan. And because the position does not necessarily require a medical degree, health coaches can be drawn from a diversity of settings.
Health Care at Home. We may have thought the days of the house call were over, but increasingly, they are coming back into fashion. Marketing firm BCC Research predicts that the market for remote monitoring and telemedicine applications will double from $11.6 billion in 2011 to about $27.3 billion in 2016. Much of the interest is being fueled by the people expected to become insured through the Affordable Care Act, a surge of new consumers that our system simply can’t treat in person.
Also driving the growth is the need to make care more convenient, particularly for those with chronic conditions, so patients can be monitored and coached to health anytime, anywhere. And there’s a cost component to the trend as well. “Hospital at Home,” a program designed by Johns Hopkins that provides acute care services in the homes of patients who might otherwise be hospitalized, has been demonstrated to increase the quality of care patients receive, improve their satisfaction, and reduce costs by at least 30 percent.
Last, technology-enabled at-home health care is increasingly solving an access issue for patients. According to a recent survey, almost half of rural hospitals use virtual care or telemedicine to connect with patients who may be too far away for an in-person visit, allowing them to close the gaps in care that arise due to geography.
On-the-Job Health. If you don’t already work for a company that offers incentives for healthy behaviors or penalties for non-compliance, that’s likely to change in 2014. This trend is being driven by two forces, both spurred by the ACA: the ability for employers to increase the dollar value of wellness incentives from 20 to 30 percent of total coverage, and increased private insurance costs.
When considering the wellness incentives, employers are responding with both free health tools and financial incentives. On the tools front, this can include free pedometers or FitBits to monitor activity, or free subscriptions to wellness web sites such as iFit or HealthyRoads. In terms of incentives, these can take a variety of forms, too. Whole Foods, for instance, offers its healthiest employees deeper store discounts. Others provide gift cards or extra paid days off for wellness behaviors such as joining a gym or participating in health screenings.
To address the cost issues, employers are addressing lifestyle choices that lead to higher health care consumption and corresponding costs, including tobacco use and obesity. Some employers, including Alaska Airlines and Hollywood Casinos, have hiring bans for employees who test positive for nicotine use. Others charge higher premiums or impose financial penalties for employees that fail to meet minimum health standards, such as a 40-inch or less waist circumference or a body mass index under 35.
Changes in the Exchanges. Insurance exchanges aren’t just for the public markets. In fact, a growing number of employers are considering comparable, private exchanges for their employees. Private exchanges allow employers to contract with a benefits provider offering hundreds of competitive health plans from dozens of insurers. Individuals are given a defined contribution from their employer to purchase coverage, allowing them to select the form their benefits will take, including the amount devoted to health, dental, vision, life or disability insurance, as well as the risk they accept via co-pays and deductibles.
Our expectation is that private exchanges will continue to grow in popularity in 2014, as they give employees an opportunity to customize coverage and provide a predictable amount of spend for the employer.
War of the Words. Mid-term elections will have politicians out in full force trying to re-prosecute the case on health reform. But anyone anticipating big changes to the ACA before 2017 will be disappointed; although the bellyaching will be at fever pitch, there will be no viable pathway to repeal and replace the law this year.
However, there will be opportunities for health policy changes this year. A few areas we see getting traction include a permanent fix to the sustainable growth rate (SGR) method for calculating physician payments. There is an SGR fix on the table, and members of Congress could come to a compromise on the path forward, complete with “pay fors” to fund it, by March. A permanent SGR fix will put physicians on the value-based purchasing (VBP) track that hospitals adopted years ago, with a significant portion of their income tied to quality and cost improvement, as well as incentives to pursue alternative models such as bundled payment and shared savings.
Along with SGR, we expect to see CMS adjust their two-midnight rule (which has already been further delayed until after September 30). This would help ensure that medical decision making is left in the hands of the physicians and not an arbitrary timetable. And we expect there could be changes to the hospital-acquired conditions (HAC) policy, which today penalizes hospitals up to three times for the same conditions. Ultimately, we believe CMS will recognize this policy is in effect arbitrary and unfair and replace it by moving HACs into the VBP program.
Data Liberation. The big buzz in health care is Big Data. From electronic health records to clinical measures and decision support tools, providers are inundated with new technologies that enable them to automate processes and capture new types of clinical data. However, these systems are limited in their potential because they don’t “talk” to one another; they’re the equivalent of an email system that only allows you to send messages to people in your own company, or a phone plan that only allows you to make calls in your house.
As long as data remains captive behind proprietary walls, we won’t be able to unlock its true potential. Inherent in the Big Data revolution of 2014 will likely be a provider-led push to liberate data by making application programming interfaces open source tools that developers can use to design creative, new applications that make use of all the data, and turn it into something providers can truly leverage. It’s sort of the iPhone approach to health care technology — Apple owns the operating system, but anyone can design an app that leverages it to deliver programs and services that the user truly values.
Recognizing the trend, some EHR vendors and insurers are making more systems open for innovation. But industry players can look for 2014 to be the year that the push for transparent data assets reaches a boiling point.
Partners R Us. We’ve already started to see unusual partnerships across health care designed to deliver care in new ways. Some of the more interesting moves in 2013 involved drug chains partnering with physician groups to create ACOs based around retail clinics. But in 2014, look for the trend to include community-based groups, including social service agencies, area gyms, and other non-health care service providers.
To give an example, Mount Sinai Hospital in Chicago serves a highly indigent population, where the poorest residents have a diabetes rate that is three times the national average. There, Sinai partnered with a local grocery store to offer healthy food and classes on how to prepare it. Encouraged by the success they had working with 300 patients, Sinai expanded the program to local schools, day-camps, and youth programs.
As more providers look to provide “whole person care,” we expect many more of these kinds of unconventional approaches, and anticipate more formal arrangements with community churches to provide group care sessions, nature centers to provide outdoor exercise opportunities, taxi services to provide free or reduced price health care transportation services, and many more.Email This Post Print This Post
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