Donna Martin, HGS Senior Vice President, Business Development, Global Healthcare; Anand Natampalli, HGS SVP, Sales and Business Development, Healthcare; and Daniel Schulte, Senior Vice President, Healthcare
If there is one constant in healthcare, it’s change. The outcome of the general election, technological advances, growing workforce needs, regulatory reforms, and the continued shift to value-based care will all continue to have a profound impact on the industry in the coming year. Here are the major changes that we believe will affect payers and providers in 2017:
Payer and Provider Prediction
The Future of ACA and Value-Based Care.
The outcome of the recent elections has left many in the healthcare industry uncertain about the future of the Affordable care Act (ACA), Medicaid expansion, and value-based care initiatives.
Hospitals and insurers have invested a tremendous amount of time, money, and resources toward improving the health and financial security of millions of US citizens. After January 20, what happens next? Will the ACA be modified? If it is repealed, what will its replacement look like? Right now, those questions are unanswerable. And it’s for that reason HGS believes the biggest concern presently facing the healthcare industry is uncertainty.
Our recommendation is that industry stakeholders stay the course and continue to work to provide ever-more consumer-focused, value-based health services to millions of Americans. The consumerization of healthcare will continue for the foreseeable future, and it is the responsibility and mandate of the healthcare industry to equip customers with the ability to make informed decisions about their healthcare with confidence. In the months to come, the post-election agenda will come into view, and HGS will be prepared to deliver counsel and advice to our clients and thought leadership to the broader audience of healthcare professionals.
The Primacy of the Consumer Experience
The shift to value-based care and the passage of the ACA changed the fundamental dynamic of healthcare purchasing and delivery, respectively. The establishment of marketplaces, which allow individuals and small businesses to compare standardized coverage options, placed unprecedented power in the hands of healthcare consumers.
Our digital age of smartphones, texting, social media, and increased online engagement makes it easy for consumers to compare prices and plans, receive recommendations, read reviews from others experiences, and choose health plans in a much more informed manner than ever before. The empowerment that comes with access to this technology has fundamentally changed how customers are serviced today.
Today’s consumers don’t want to have to climb a company’s phone tree for more information. They want quick access to real-time information online. A customer, who has no problem texting with their plan provider for 15 minutes, may give up in frustration if they’re put on hold for 10 minutes.
Health plans are starting to embrace this trend—some are even tapping the customer experience as a business metric. An intensely loyal member is an advocate who creates the perception of reliability and credibility in the marketplace if the open data exchange is managed properly.
A critical aspect of engaging members is to deliver a unified, seamless experience, across the channel or device of the members’ choice—be it via smartphone, laptop, landline, email, or online chat. However, if the member chooses to engage with the plan provider, they must be ready to meet (and certainly anticipate) those member’s needs. HGS predicts that plan providers will continue to heavily invest in capabilities and infrastructure to support unified, multi-channel customer engagement.
CPO and Telemedicine
HGS predicts that clinical process outsourcing (CPO), an aspect of business process outsourcing, will continue to mature, finding mainstream applications in broader ranges of care, driven in part by increased provider demand with shortages of clinical professionals. With the increasing volume of the aging population, requiring more frequent provider guidance in care, we see evidence of increasing CPO choices developing in the near future. We’ve already begun to see a reduction in readmissions, through the utilization of technological advances in remote patient monitoring and other wireless communication options, making patients more successful in recoveries from home.
Political factors may complicate CPO options; however, onshore, near-shore, right-shore, and work-@-home scalability will remain viable and robust options for many healthcare providers. Process management and technological capabilities by BPO organizations will continue to mature and achieve greater alignment with the goals and needs of the US regulations, payer, provider, and pharmacy communities.
Telemedicine is a quickly growing field and an increasingly preferred option for payers, providers, and pharmacies. Telemedicine increases access to triage care for many patients, especially those who live in rural areas, and offers a cheaper alternative to in-office visits. The growth of wearables and other mobile wellness devices is expected to be a $41 billion by 2020, making the monitoring of patients more ubiquitous. Legislatively, telehealth is extremely popular, with more than 200 supportive bills introduced in 42 states in 2015 alone, according to National Conference of State Legislatures research.
Maximizing the Value of High-Performance Networks
With healthcare costs in America continuing to rise and more individuals and employers demanding more choice in health plan coverage. Plan providers and employer groups are looking at ways to develop lower-cost, high-performance provider networks. These networks give members access to limited, but high-quality providers in exchange for lower premiums or out-of-pocket costs. These kinds of networks were put on a fast track to meet ACA deadlines, many payers are looking to make improvements to their network portfolios. Although the future of the ACA is uncertain, the Medicare Advantage, managed Medicaid, and employer markets should largely remain intact. HGS predicts that payers will continue to improve upon their networks, where the emphasis will be on giving more favorable contractual agreements to higher preforming provider networks that drive positive health outcomes and focusing on improving the health of the populations which they serve.
Engagement and Activation
Technologies that enhance and improve patient engagement will be critical to healthcare moving forward. Through population health management, we are learning more about how to create wellness strategies and to better support patient populations based on their conditions and adjust for nuances in age, race, diagnostic groups, and the like. A critical aspect of engaging patients is delivering professional guidance through multi-channel communication choices, be it via smartphone, laptop, landline, email, or online chat. This is a very different experience than many members have had with providers in the past, but it represents the level of convenience and service consumers have come to expect in markets ruled by the consumer experience across the economy.
Rethinking Denials Management
Managing denials that come from the newly insured, especially the self-pay population or those that belong to narrow networks will continue to be a challenge many hospitals and health systems will face. With patients paying more out of pocket and higher copays for their healthcare, hospitals and medical practices are correctly focused on improving patient collection processes. But at the same time, it’s important not to lose sight of the other side of the revenue equation—the payer. As reimbursements shrink, capturing every dollar that’s owed to you is critical. To do this, you need to make sure you are effectively managing coding accuracy and denials. Automation will be a big part of the solution. In the not-so-distant past, managing denials involved a printer, a highlighter, a copier, and some sticky notes. But with hundreds of thousands of transactions processed each day, this approach is no longer feasible. Practices need to pivot and focus on every opportunity to automate.
Rising Healthcare Costs
The need to drive efficiencies is more paramount than ever. One of the key drivers starting to take shape, post ACA is the shift from volume- to value-based healthcare. With this change, health systems and providers alike are now feeling the pressure to focus on being more efficient organizations. Among additional concerns is the fact that Medicare is now penalizing readmissions as well as hospital-acquired conditions. Under the Medicare Shared Savings Program (MSSP), and through Value-Based Purchasing (VBP), there are positive areas to benefit the providers. However, these programs also carry potential penalties if they are not executed effectively. With this in mind, providers will need to pay special attention to areas such as population health management and the successful integration of care management for at-risk populations. According to an Advisory Board Study, if these populations are treated as they have been in recent years—with providers not integrating population health management and care management as a unified strategy, they will experience a negative 8% margin in the coming years.
Reflecting on HGS Predictions for Healthcare 2016
Last year our in-house experts Anand Natampalli and Daniel Schulte shared prognostications for our payer and provider partners, with our blog “What’s in Store for Healthcare in 2016?” Now, with the year in our rearview mirror, we checked in for a level-set on optimizing customer experience, technology, and key challenges. How accurate was our forecasting?
Undoubtedly, 2016 will go down as an important turning point for healthcare, with digitization, engagement, and consumerism all bolstering the industry’s aim to meet stepped-up consumer demand.
The primacy of data continues unabated. Healthcare’s move from volume to value is well underway. Payers are increasingly acknowledging their involvement in by tracking data related to patient history and treatment to assist with improving health outcomes. And this means enhanced patient management and care coordination of chronic conditions. This is evident in partnerships like the one formed in February 2016 between Aetna and the Delaware Valley Accountable Care Organization (DVACO), which is focused on quality and efficiency of medical services. Data is key to this population health management emphasis in healthcare.
Customers’ leverage is a game-changer. In March 2015, HHS reported a total of 16.4m covered due to the ACA between the Marketplace, Medicaid expansion, young adults staying on their parent’s plan, and various other coverage provisions. 2016 statistics show a significant increase, with an estimated 20 million people with health insurance coverage. These members are empowered and continuing to look to service and experience as key differentiators when choosing a health plan.
Continued front-office/back-office integration. Lowering administrative costs and enhancing efficiencies were high priorities for most health plans in 2016. The Affordable Care Act (ACA) landscape change and shift from legacy coding to ICD-10 has reinforced healthcare payer BPO outsourcing market growth. In fact, according to NelsonHall, a healthcare industry outsourcing analyst firm, the current global BPO market is estimated at $2.5 billion, and is expected to grow by nearly 6 percent annually through 2018.
Nurse support increases. Health insurance companies are hiring record numbers of nurses as the Affordable Care Act boosts the number of patients with medical coverage and plans to look for ways to coordinate care of the newly insured, supporting population health efforts. HGS’s 1,500 registered nurses are actively supporting health information lines, nurse triage, level-of-care assessments, and wellness solutions, supporting these increases.
Engagement and activation becomes more seamless. Providers are increasingly using technology to coordinate clinical care navigation such as patient scheduling, education, point of service collections and enhanced care coordination, to reduce administrative overhead. U.S. hospitals are accelerating and diversifying their digital healthcare program particularly using the web to engage and monitor patients, according to a 2016 American Hospital Association study.
Telehealth grows. Today’s optimized patient engagement means a unified, seamless experience across channels and devices. According to the same AHA study above, more than 25% of hospitals are now using telemedicine and other web-based technology, including wearables and mobile apps, to monitor patients with such chronic diseases as congestive heart failure, diabetes and heart disease.