Entries in Trends & Strategies (108)


A Tour of 2019 Healthcare Predictions

By Clive Riddle, January 4, 2019 

We recently released our own 2019 healthcare prognostications, and now it’s time to take a tour of a selected healthcare weather forecasts for the year ahead, on a variety of fronts. 

First for a general overview, we stop at the PwC Health Research Institute’s 13th annual report on the year ahead, with six healthcare trends to watch in 2019

  1. Connected health devices and digital therapies will become integrated into care delivery and the regulatory process for drug and device approvals, with several new products coming to market
  2. Healthcare organizations will have to make major capital and training investments in artificial intelligence robotics, automation and data analytics in order to keep pace.
  3. The 2017 Tax Cuts and Jobs Act will continue to create tax savings for healthcare organizations while creating new challenges. 
  4. The healthcare industry is ready for a disruptor like Southwest, the budget airline provider was to that industry. 
  5. The pace of healthcare private equity investment will accelerate 
  6. Republican changes to the ACA will shift the law's winners and losers. Providers are on the losing end of most of these changes.

Also, providing an overall view is CareMore’s Sachin H. Jain in Forbes magazine with these: 10 Healthcare Industry Predictions for 2019:

  1. Humanism and humanity in healthcare will make a real comeback.
  2. The epidemic of loneliness will take center stage.
  3. Medicare Advantage will be seen as a template for the healthcare system of the future
  4. Quality measurement will focus on what happens in the exam room.
  5. The health care industry will make progress on new models for drug pricing.
  6. We will finally learn what Amazon, Berkshire Hathaway and JP Morgan are up to.
  7. Tech companies will get into the health care delivery business.
  8. More buzzwords: I’m not sure what language mashups we can expect next year, but rest assured they’ll generate plenty of conferences and spam emails.
  9. Another unlikely, head-scratching mega-merger will occur.
  10. We will all keep our new year’s resolutions: Each of us will lose fifteen pounds. We will all read a book a week. We’ll learn Mandarin, remember to call our grandparents, wash the dog more often and write that mystery novel about the doctor who uncovers a crime syndicate operating out of the hospital cafeteria 

One more overview entry on the tour comes from the 2019 HCEG Top 10 by the Healthcare Executive Group 

  1. Data & Analytics: Leveraging data (especially clinical) to manage health and drive individual, provider and payer decisions.
  2. Total Consumer Health: Improving members’ overall medical, social, financial, and environmental well-being.
  3. Population Health Services: Operationalizing community-based health strategy, chronic care management, driving clinical integration, and addressing barriers to health such as social determinants.
  4. Value-based Payments: Transitioning to and targeting specific medical conditions to manage cost and improve quality of care.
  5. The Digital Healthcare Organization: HSAs, portals, patient literacy, cost transparency, digital payments, CRM, wearables and other patient-generated data, health monitoring, and omni-channel access/distribution.
  6. Rising Pharmacy Costs: Implementing strategies to address growth of pharma costs along with benefits to quality of care and to total healthcare costs.
  7. External Market Disruption: New players like Amazon, Chase, Apple, Walmart, and Google.
  8. Operational Effectiveness: Implementing lean quality programs, process efficiency (with new core business models), robotics automation, revenue cycle management, real-time/near-time point of sales transactions, etc.
  9. Opioid Management: Developing strategies for identifying and supporting individuals and populations struggling with substance abuse/addiction or at risk of addiction.
  10. Cybersecurity: Protecting the privacy and security of consumer information to maintain consumer trust in sharing data 

Here’s a venture capital perspective on the healthcare industry from Venrock, featured in Fortune magazine: 10 Health Care Predictions for 2019 From a Pair of Venture Gurus 

  1. More payer consolidation
  2. Physician-led Accountable Care Organizations will grow rapidly
  3. Doctors get less dissatisfied
  4. Interoperability becomes interoperable: Five years after being declared successful, forces will finally come together to lead breakthroughs on cross health system and platform interoperability. 
  5. Consolidation in digital health
  6. We think that we are near peak hype cycle for insurance technology. 2019 is likely to be a year of toe stubbing for many. 
  7. Dialysis disrupted: Just as Sears has been replaced by home delivery, dialysis centers will be supplanted too. 
  8. Telemedicine takes off
  9. PBM disruption talk becomes reality
  10. Real progress with new DNA sequencing platforms 

Turning toward technology, CIO Magazine offers Healthcare technology markets: 5 predictions for 2019: 

  1. Health systems are investing in specific programs such as telehealth and remote monitoring. While these initiatives gather momentum, other digital health programs are struggling to emerge from pilot deployment and also face competing priorities for discretionary budgets.
  2. AI will make steady progress but will struggle with adoption gaps
  3. Big tech is yet to figure out its play for healthcare markets, with one possible exception (Apple Watch)
  4. Digital health startups will face a continuing struggle for growth and stability
  5. Blockchain will remain a solution looking for a problem 

On the policy front, Morning Consult offer thse Top 5 Health Policy Predictions for 2019

As cost of health care continues rising, states and industry set to act 

  1. Affordable Care Act: A ruling from a federal judge finding the Affordable Care Act unconstitutional has cast uncertainty on the future of the nation’s health care system — and reframed national debate on health reform ahead of the 2020 elections.
  2. CMS waiver guidance: Armed with a majority, House Democrats are poised to probe how the Trump administration has handled the ACA during the last two years
  3. Drug-pricing policy: Addressing the cost of prescription drugs is sure to continue dominating health priorities in 2019, although there is a long road from bipartisan commitment to reducing prices — to bipartisan consensus on how best to do so.
  4. Shift toward value-based payment structures: Increasing pressure on hospitals, which contributed to one-third of total health care spending last year, could drive a shift toward value-based payment models next year — a top priority in the Department of Health and Human Services’ Choice and Competition 2018 report.
  5. Digital therapeutics and e-health: After years of being just within reach, digital therapeutics and e-health initiatives stand to finally emerge in in the industry and transform care delivery next year. 

Next, we’ll consider employer benefit trends, with the selections of Mercer thought leader predictions posted here and here: 

  1. AI everywhere!  Healthcare will be the next industry to be transformed by AI. 
  2. Account-based plans create buzz.  
  3. Personalization of health care. 
  4. Value on investment: The new yardstick for benefits will be how they affect employees’ perception of their employer. 
  5. Transparency in Rx pricing.  
  6. Getting family-friendly fast. 
  7. Extreme claims get real.   A number of factors are driving an increase in both the prevalence and the size of extreme claims
  8. More stop loss. With the severity and frequency of catastrophic claims, employers will up their stop loss insurance levels and those that don’t buy it now will reconsider. 
  9. More outsourcing.  HR and health and wellbeing functions will increasingly be outsourced t
  10. Midsized employers doing something really different.  While jumbo employers are typically the trailblazers, this year midsized employers will take the lead with a couple of truly radical benefit strategies:
  11. Moderate cost growth allows longer-term focus. 
  12. Big things for behavioral health Change is happening in the behavioral health care delivery system.
  13. Specialty drugs will command attention. 
  14. Rx management gets yet more complicated. PBMs, carriers, pharma companies, and wholesalers will continue to face intense scrutiny regarding profits, delivery models and alignment (or lack of alignment) with plan sponsor goals.
  15. Employers mix it up with clinical services. 
  16. The issue of bill coding will surface. As doctors and hospitals become health systems, they are hiring coding experts at an increasingly rapid rate as a means of maximizing reimbursements. 

Finally, let’s end the tour peeking into pharmaceuticals, as CFO magazine features Deloitte’s Greg Reh in Four Trends That Could Shape Life Sciences in 2019 

  1. Greater scrutiny over drug pricing. 2018 was one of the biggest years for policy efforts to reduce drug prices and out-of-pocket expenses for patients. 
  2. Increased interest in contracts that demonstrate value. The launch of several gene and cell therapies has been a catalyst to advance the discussion of alternative payment models. 
  3. The declining return on investment for R&D. A Deloitte analysis on the ROI of R&D among 12 large-cap biopharma companies portrays a steep decline over the nine years that the analysis has been performed.
  4. Evolving regulatory frameworks and collaboration between industry and regulators. The U.S. Food and Drug Administration’s (FDA) pre-certification program, which launched in late 2017, is an example of how collaboration between industry and regulators can drive more self-regulation that is rooted in a culture of quality, organizational excellence, and performance monitoring. 



What College Can Teach Healthcare

by Kim Bellard, December 19, 2018 

Mitch Daniels, the former Governor of Indiana and current President of Purdue University, gave an interesting interview to The Wall Street Journal about what Purdue has been up to during his watch. Mr. Daniels — who knows a thing or two about healthcare — drew an explicit parallel to healthcare in the interview: 

“You’re selling something, a college diploma, that’s deemed a necessity. And you have total pricing power.” Better than that, “when you raise your prices, you not only don’t lower customers, you may actually attract new ones.” For lack of objective measures, “people associate the sticker price with quality: ‘If school A costs more than B, I guess it’s a better school.’” A third-party payer, the government, funds it all, so that “the customer — that is, the student and the family — feels insulated against the cost. A perfect formula for complacency.” 

Higher education is one area where prices seem to be rising even faster than in healthcare, and both much faster than wages. Student debt just hit a record $1.465 trillion — yes, trillion — and now trails only mortgage debt in size. 

We spend a lot more — nearly twice as much per student annually — on higher education than almost any other developed country, according to OECD. Yep, sounds like U.S. healthcare all right. 

Mr. Daniels is trying to change that. For one thing, he’s focused on holding the line on costs, such as by bringing Amazon in to help lower textbook prices. Purdue had raised tuition 36 years in a row prior to his arrival, and now has not raised them since 2012. 

But here’s what really caught my eye. Purdue pioneered the use of Income Share Agreements (ISAs), an idea attributed to economist Milton Friedman. Students don’t owe tuition during college, but six months after graduation they begin to pay a percentage of their income for a fixed number of years (e.g., 10 years). Repayment is capped at 2.5 the initial funding. Several other universities are now rolling out their own versions. 

The application of ISAs to healthcare may not be obvious. In an earlier post, for example, I suggested treating our health as a capital asset. We would seek to spend — invest — money on things that increase it, and avoid things that decrease it. It would, admittedly, be hard to quantify any of this, but doing so would force us to measure and to track. 

Perhaps a Healthcare Share Agreement (HCSA) would have a healthcare organization make a quantifiable prediction about your health, and what you pay each year would depend on how they do against that prediction. We’d have to agree on how to measure it, over what period of time, but both the prediction and the measurement are feasible (e.g., QALY). 

The payment could be in lieu of health insurance premiums or health care organization’s charges. The healthier-than-expected you are, the more you pay; the worse-than-expected you are, the less you pay. It’s value-based payment at the next level. It could be done as agreements with individuals and organizations, or, say, between health plans and health organizations at a population level. 

The key thing is for healthcare organizations to do what Purdue is doing: bet on their ability to actually make a positive impact in the lives of the people they serve. 

I don’t know how it would work. I don’t know if it can work. But I’d sure like for someone to give it a try, because the existing business models sure don’t seem to be working.

This post is an abridged version of the posting in Kim Bellard’s blogsite. Click here to read the full posting


Nine Healthcare Business Trends for 2019

By Clive Riddle, December 14, 2018 

Here’s nine trends to keep a close watch on as we stand on the precipice of 2019:

1. The Year of SDOH

Health Plans, Health Systems and Public Agencies all will invest more heavily in Social Determinants of Health initiatives for their at risk populations. The number, scope, and resources involved in programs will significantly escalate, using a wide range of approaches. Some will be touted as quite successful, some will be deemed as failures, many will need much more time before conclusions can be drawn.

2. Continued Uptick in Uninsured

The Commonwealth Fund cites “The uninsured rates among lower-income adults rose from 20.9 percent in 2016 to 25.7 percent in March 2018.” The news won’t get better in 2019. The ongoing federal chipping away at the ACA in various forms will continue to yield a rising rate in the uninsured.

3. Much Ado About Prescriptions

PBMs, Specialty Drugs, and Pharmaceutical price hikes have been everyone’s punching bag. And the punching will continue with much noise in 2019. But what further policy changes might one expect out of Washington with the current climate? And just released National Health Expenditure data indicates “per capita prescription drug spending slightly decreased (down 0.3%) for the first time since 2012.” While Rx costs are projected to be troublesome in the coming years, the current stall in costs will likely stall momentum for actual change.

4. Amazon and CVS Will Be Busy Bees

CVS and Aetna are now out of the gate, and have already put forth transformational plans.Amazon isn’t just positioning for the pharmacy arena – they’re into healthcare tech and much more, let alone their venture with their employer driven triumvirate with Berkshire and JP Morgan.

5. Increased Focus on Million Dollar+ Claims

Even though general healthcare costs are increasing in the lower single digits, the real high end is not finding a ceiling. Million-dollar+ medical claims increase 87 percent from 2014-2017. Technological and clinical advances will keep pushing this forward, and an increasing amount of attention will be paid on how to deal with the highest end claims. 

6. EHR: Physician Pushback and Response

A Medical Economics magazine article this month starts off with: “It’s no secret that dissatisfaction with EHR systems has been a major concern for physicians. In fact, several recent surveys report as much as a 25 to 30 percent unhappiness level among doctors and practices.”  The pushback will not subside in 2019, and vendors have a major opportunity to promote how they can make physician’s work lives easier, if they truly can come up with some innovative responses. 

7. Employee Cost Sharing: Large Group and Small Group In Different Directions

The Commonwealth Fund reported this month that “premium and deductible costs amounted to nearly 12 percent of median income in 2017. Added together, the total cost of premiums to workers and potential spending on deductibles for both single and family policies climbed to $7,240 a year in 2017.” While e cost sharing in its many forms just continues to exact a growing burden on employees, large groups are shifting strategies away from increased cost sharing, while the small group market may see no respite in 2019. 

8. Cybersecurity Stakes Rise as Healthcare Data Breaches Continue

Its not very risk to predict high risk of more major healthcare data breaches in 2019. Healthcare cybersecurity investments will continue to grow in 2019.

9. Value Based Healthcare is Everywhere

The challenge in 2019: to find a healthcare organization that doesn’t have the words value-based emblazoned throughout its communications.


Too Much Stupid Stuff

by Kim Bellard, November 16, 2018

Melinda Ashton, M.D., has a great article in NEJMGetting Rid of Stupid Stuff. It describes a program her health system (Hawaii Pacific Health) undertook to do exactly that, with some promising results.

The impetus of their program was to address the issue of burnout, specifically around documentation burdens. Their EHR had been in place for 10 years, and they reasoned that some tasks might no longer be necessary or appropriate. So, starting October 2017, they asked all employees to nominate anything in their EHR that was “poorly designed, unnecessary, or just plain stupid.”

Dr. Ashton and her team reminded employees that: “Stupid is in the eye of the beholder. Everything that we might now call stupid was thought to be a good idea at some point.” Fair enough. They expected nominations to be in three categories:

  • unintended documentation that could easily be eliminated;
  • documentation that was needed but that could be collected more efficiently;
  • documentation that needed better training to accomplish.

They ended up getting nominations in all three categories, and have already implemented a number of changes, as well as eliminating 10 of the most frequent 12 physicians alerts. The program has now been extended beyond just documentation and beyond just the EHR because, as Dr. Ashton writes: “It appears that there is stupid stuff all around us.”

It would be easy but short-sighted to take healthcare’s collective frustration out on EHRs. But let’s not kid ourselves: EHRs are not the stupidest thing we have in healthcare. EHRs may, in fact, be the smartest stupid thing healthcare has done, because at least there are significant upsides to having EHRs, even if we’re not achieving them yet. There are plenty of things we do in healthcare that are just plain stupid.

Admit it: if you work in healthcare, you see stupid stuff every day. Some are things imposed on you from external sources, and some are things required by your own organization. As Dr. Ashton cautioned, some may have been a good idea at some point. Some may never have been a good idea. Some are things that just keep getting done simply because of habit/ tradition/rules. Some are stupid things that someone, somewhere, still thinks is a good idea but, when push comes to shoving patient care, aren’t. They’re still stupid, and should be stopped.

The program at Hawaii Pacific Health as aimed primarily at reducing daily frustrations for its employees, but we need to go much further. These kinds of programs need to attack daily frustrations for all stakeholders, and especially for patients.

If you are a healthcare leader, start a program like this. If you work in a healthcare organization, advocate for one until your leadership puts one in. If you are a patient or family member of one, don’t wait for a formal program from the healthcare organizations you interact with; speak up about the stupid stuff you see and have to deal with, and make sure your thoughts get to those organizations’ leadership.

It’s stupid to accept stupid stuff, especially with something as valuable as our health at stake.

This post is an abridged version of the posting in Kim Bellard’s blogsite. Click here to read the full posting


Five Questions for Erin Benson and Rich Morino with LexisNexis Health Care: Post-Webinar Interview

Five Questions for Erin Benson and Rich Morino with LexisNexis Health Care: Post-Webinar Interview

Last week, Erin Benson, Director Marketing Planning and Rich Morino, Director, Strategic Solutions, LexisNexis Health Care, participated in a Healthcare Web Summit webinar discussion on opportunities for health plans to leverage social determinants of health data to attain quality goals while managing cost and enhancing member experience.  If you missed this engaging webinar presentation, watch the On-Demand version here. After the webinar, we interviewed Erin and Rich on five key takeaways from the webinar:


1. What are some of the ways that member health is impacted on a daily basis by social, economic and environmental factors?


Erin Benson and Rich Morino: The environment in which a person lives impacts their likelihood to develop health conditions as well as their likelihood to effectively manage those conditions. Care recommendations need to be a good fit for a member’s environment, not just their medical condition. If recommendations won’t work within the person’s physical environment, aren’t affordable or conveniently located, and are provided in a way that is hard for the member to understand, they won’t be effective at improving health. Studies support this fact. For example, 75-90% of primary care visits are the result of stress-related factors (JAOA Evaluating the Impact of Stress on Systemic Disease: The MOST Protocol in Primary Care). Money, work and family responsibilities – all reflective of social determinants of health -- are cited as the top three causes of stress (APA 2015).


2. We've heard reference to aggregating data at the zip code level for use in personalizing care for members. However, this is one of your top five myths about socio determinants of health. Can you tell us more?


Erin Benson and Rich Morino: While aggregate data can be useful in certain capacities, it isn’t recommended as a best practice for personalizing care. Within a single zip code, it is not unusual to see variance in income levels, crime rates and other factors impacting an individual’s neighborhood and built environment, so we recommend looking at an individual’s neighborhood from the perspective of their specific address. Focusing on zip code alone also ignores the influences of education, economic stability and social and community context so we recommend incorporating these other social determinants of health into decision-making in order to view the member holistically and create a more comprehensive plan of care outreach.  


3. Can you briefly explain why previous generations of SDOH have failed to improve health outcomes?


Erin Benson and Rich Morino: There are two primary reasons why previous generations of SDOH have failed to improve health outcomes, data and workflow.   In order to get sufficient value, the data needs to address all 5 categories of SDOH to properly draw useful insights.  The data should also be at the member level, and address who the member’s family and close associations.  Without that information, we cannot tell if someone is socially isolated or living with caregivers, for instance.


The second reason why previous generations of SDOH have failed is how they are deployed in the workflow.  An example would be a plan simply adding them to an existing claims-based model to achieve an increase in lift.  The lift is nice, but no changes in process are filtering down to the Care Management team interacting with the members.   In this scenario, a lot of value was ignored.


A better method would be if the plan also built models identifying members with barriers to improved health outcomes.  If you now apply this to your chronic or at-risk population you can determine not just who is sick and in need of help, but how to most likely achieve success in an intervention program.  Care Managers would immediately know the challenges to success, and what type of intervention program the member should be in enrolled in from the start.


4. One of the SDOH models to uncover health barriers referenced during your webinar was social isolation. Can you provide more context for us here?


Erin Benson and Rich Morino: Studies have shown that social isolation can increase risk of heart disease by 29% and stroke by 32% (New York Times How Social Isolation Is Killing Us). By understanding factors about an individual such as who else is living in the household with them, their predicted marital status, and how close their nearest relatives and associates live to them, healthcare organizations can identify who may be socially isolated. This allows care providers to ask the right questions to determine if that person needs access to social support systems such as support groups or community resources to improve their health outcomes.


5. What are some ways social determinants can help health plans enhance predictions and improve care management?


Erin Benson and Rich Morino: The most common way of utilizing SDOH data so far has been to incorporate it into existing claims-based predictive models to improve predictive accuracy or to use it to create new predictive models. The second use is for care management purposes and this is where social determinants of health can be truly transformational. We recommend as a best practice to use social determinants of health insights to also build models that identify health barriers. The combination of models allows healthcare organizations to better stratify the risk of their members and then better tailor care to their medical and social needs.