HGS Healthcare Forecast: 2018

Donna Martin, HGS Senior Vice President – Business Development, Global Healthcare; Anand Natampalli, HGS SVP – Sales and Business Development – Healthcare; Daniel Schulte, Senior Vice President, Healthcare; and Krithika Srivats, Senior Director, Healthcare Center of Excellence

Every year, HGS surveys the complicated healthcare landscape to determine what major stakeholders will be talking about and focused on over the next 365 days. How will digital technology, emerging management strategies, consumer engagement, and political uncertainty shape 2018 for payers, providers, and patients? Here are the major changes that we believe will affect healthcare in 2018:

Political Uncertainty Continues

Despite single-party control of the White House and Congress, we expect that uncertainty will remain a distinct feature of the healthcare landscape for the foreseeable future. From March to September, Congress failed to pass any of its multiple iterations of “repeal-and-replace” legislation of the Affordable Care Act (ACA). The tax reform bill, which recently passed Congress and was signed into law, includes a provision that eliminates the ACA’s individual mandate. The non-partisan Congressional Budget Office, which scores the impact of legislation, anticipates that the mandate’s repeal could boost premiums by 10 percent and increase the number of uninsured by 13 million. This level of political turbulence could have an adverse impact on industry stakeholders, particularly payers, who have invested billions of dollars on the continued shift to value-based, consumer-centric healthcare.

Action Item: Existing payers and provider organizations, as well as the market’s new entrants, must continue planning for completing the shift to value with strategies that anticipate ongoing political uncertainty, as well as other forces driving change. HGS will be prepared to deliver counsel and advice to our clients and thought leadership to the broader audience of healthcare professionals.

Healthcare Consumerism

The Consumer Is King

The healthcare industry has been making steady progress on moving the patient closer to the center of the healthcare ecosystem. This year, we predict that consumers will be viewed—and treated—like true stakeholders in continuing to become more engaged with and proactive in their own health. This shift is not only about creating or re-imagining innovative new services and technology. Just as critically, consumers will continue to have “more skin the game” in terms of access to decision support tools, wellness and participation in programs that reward healthy behaviors. Additionally, HGS anticipates that more healthcare organizations—both payer and provider—will use research to uncover insights into population health management innovation and chronic disease management.

Action Item: Analyzing community data more closely,, increased process automation and investments in anywhere/anytime engagement via smartphones, texting, social media, and increased online engagement should all be major priorities for both payers and providers. More and more, healthcare organizations are making consumer experience and engagement a key metric of business success. HGS predicts that health plans and providers will continue to heavily invest in capabilities and infrastructure to support unified, multi-channel customer engagement.

Making Data Actionable

Healthcare has largely perfected the collection and storage of enormous quantities of data. With the majority of that infrastructure now in place, the next great frontier is analyzing that data to uncover insights and trends to drive transformation and cost reductions. The ability to unlock insights from data will significantly contribute to the success of today’s healthcare landscape.

The amount of data attached to every patient has grown exponentially—and all of it has to be gathered, integrated, and interpreted according to compliance guidelines and processes that can vary widely between payers and providers. In addition, the datasets held by payers and providers can be different. For example, payers possess data on claims, financial analytics, and risk models. Providers have administrative and clinical data that includes case histories and outcomes. Look for both payers and providers to invest more in technology and services that strengthen their analytical capabilities.

Action Item: Providers can gain valuable insights by analyzing health plan data and the progress being made by proactive patient wellness efforts versus reactive care requirements.

Payers need access to patient information in order to work with providers to establish appropriate care plans for their members. There is much to be gained by forging pathways where these two data spheres overlap, turning the data into rich, actionable information that benefits both stakeholders, and more importantly, their customers.

Healthcare Consolidation Continues

Mega-mergers and healthcare consolidation will accelerate. The recent proposed merger between CVS Health and Aetna is the latest example of entities seeking more integrated care with data analytics. The desire for more market stability could cause greater consolidation among insurance carriers via mergers and acquisitions. This may also lead to more provider organizations building and managing their own health plans.

Action Item: For many provider organizations, offering patients medical services and insurance coverage may serve their integrated approach. Prior to the ACA, there was little financial incentive for providers to work as a team to contain costs. More care equaled more money. Now that notion has been turned upside down. In a value-based care world, where margins are thin and revenues are controlled by capitated contracts, everyone must work together for the common good. In many cases, employing the expertise of a strategically minded outsourcing partner will be essential to overcoming the legal, regulatory, and administrative burdens that come with consolidation.

Increased Focus on Reimbursement via Electronic Transactions

Providers will seek more efficient ways to collect what they are owed and mitigate the effects and costs of high denial rates. As reimbursements shrink, capturing every dollar owed is critical. To do this, ensuring effective management of coding accuracy and denials is essential. Automation will be a big part of the solution. Practices need to pivot and focus on every opportunity to automate. Electronic authorizations will also see increased rates of adoption. In recent years, solutions that automate the frequently labor-intensive, manual prior authorization process have entered the market.

Action Item: This automation technology offers substantial benefits to medical practices, including reduced costs, pinpoint accuracy, improved operational efficiency, greater physician and staff productivity and, most importantly, greater patient satisfaction.

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