2014 Healthcare Predictions, Part One

Before we took off for the holidays, we wrangled our top contributing editors and asked them one question: “What are your healthcare predictions for 2014?” Here are some of their responses.

Joel Allison, CEO of Baylor Scott & White Health:

While change in the healthcare industry is moving at a pace like I’ve never seen before, I expect many of the same discussions, opportunities and trends that we experienced in 2013 to continue into 2014. So here are the top five trends I believe we’ll see in 2014:

– We’ll see healthcare providers continue to focus on quality outcomes, patient safety, and patient satisfaction with continual emphasis on transparency relative to quality and price.

– We’ll continue to see healthcare providers develop operational improvements to gain efficiencies and cost savings as a result of lower reimbursement pressure from payors.

– We’ll continue to see consolidation in the industry with larger health systems growing even larger.

– We’ll see initiatives to develop stronger physician alignment by hospitals and health systems with special emphasis on alignment with primary care physicians.

Technology will continue to play a greater role in our industry—I’m not only referring to the electronic health record and big data, but social media as well. And, of course, October 1, 2014 is the date ICD-10 will go live which is extremely important.

All eyes will be on healthcare in 2014. There will certainly be no let up when it comes to the national discussion. The steady stream of changes in our industry as a result of the Affordable Care Act, both experienced and anticipated, will keep the public dialogue and healthcare news headlines front and center.

Martin Merritt, partner in the health law section of Friedman & Feiger:

– Insurance audits will become more prevalent and aggressive. Because insurance companies can no longer deny coverage because of pre-existing conditions, they must look elsewhere to cut costs. Insurance audits of doctor’s records are a form of post-claims underwriting. Once a rarely used tool, audits will explode. Rather than find fault with the insured’s application, which is now illegal, the goal is to find fault and a reason (even a pure technicality), to deny or recoup benefits as a means of cost savings for the carrier or the self-insured plan.

– The employer and individual mandates which are centerpieces of PPACA will never happen. Where one party in government is demanding people pay for something they don’t choose to buy, and the other party is not, it is easy to see that this will not be a sustainable plan. All the public needs do to avoid the expense is vote for the other side.

Steve Harris, development officer for ACAP Health Consulting:

– With UT falling to Baylor, the Dallas Cowboys loss to Green Bay and the HealthCare.gov rollout in 2013, predictions for 2014 have head coach, Jason Garrett and U.S. Secretary of Health and Human Services, Kathleen Sebelius joining the ranks of Mack Brown and the unemployed … At least they will have a new health insurance option available to them when they leave their employer.

– Consumer health devices, mobile and telehealth initiatives will continue to bring about market-based reforms that enable better tracking, monitoring, and care coordination for patients with chronic conditions, who lack access to primary and specialty care or for those payers and providers willing to experiment with technology enabling solutions.

– Watch for continued M&A activity with health systems similar to Baylor Scott & White or Tenet (Vanguard Health) in other areas of the country. Healthcare delivery systems will continue to survive and thrive through specialization, mergers, or partnerships that lead to even bigger systems of care.

– After the elections in November 2014, more carriers will exit the exchange system or become even more selective with their markets and propose double-digit premium-rate increases as the demographic underpinnings of the exchange fail to capture the 18-34 age group needed for the law to succeed.

– With less than predicted young people signing up for HealthCare.gov, watch for legislative push to increase penalties for those who did not adhere to the requirements in the law in 2014. There will also be a healthy amount of debate over whether the penalties should be waived in 2014 due to the botched website rollout of HealthCare.gov. [The penalty for 2014 is the greater of $95 a year or 1 percent of adjusted gross income].

– The political rhetoric of “repeal and replace” will eventually give way to the demands of the American people searching for bipartisan amendments and solutions that target the real enemy in this country … a broken fee for service environment that pays for the reimbursement of treating disease. The government will not shut down in 2014.

– Employers will continue to adopt tax-efficient plans (such as high deductible health plans with health savings accounts) as new taxes (associated with ACA’s funding) become more transparent to higher wage earners. Private health exchanges will grab the attention of employers interested in defined contribution approaches to funding their benefits.

– Companies will abandon large incentives associated with traditional first generation wellness offerings (HRA’s, biometrics, and wellness content) in favor of programs that actually show promise of changing behavior to combat the effects of smoking, obesity, metabolic syndrome and diabetes. Pharmacotherapy and surgical options will gain more traction for those who qualify.

– Watch for the continued proliferation of programs that provide price transparency and consumer advocacy. Consumers and large payers will become more educated around the disparity in pricing among healthcare facilities and providers. Congress will try and respond with everything from price controls to transparency bills.

– Congress will not be able to agree to the Medicare cuts that are the underpinnings of the Affordable Care Act. The Office of Management and Budget  will run new actuarial calculations that increase the size of the federal deficit beyond what our children can bear.

Ken Malcolmson, CEO of Humana’s West Region:

Quality of care provided to the health plan member in partnership with hospitals and medical groups—represented by accountable care and integrated care models—will become even more important in 2014 and beyond. Reimbursement practices to health plans and providers will increasingly emphasize value, outcomes and evidence-based medicine over the volume of services provided. For this approach to work, health education and well-being must be at the center of a framework that helps people stay on the right path to health. Humana will continue to invest in the wellness space to educate people how their coverage can help them get, and stay, healthy. With a coordinated approach to primary care and a priority on prevention and wellness, we can help people succeed on their journey to lifelong well-being and fuller, happier lives.

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