Key Health Care Trends in 2015

Next year, the healthcare system will be front and center as the Supreme Court rules on the constitutionality of health insurance exchange subsidies and changes to the Affordable Care Act (ACA) continue. It will be a pivotal year for the healthcare industry with the ongoing rise of healthcare costs, acceleration of consolidation among providers and payers, and looming 2016 elections, according to a report by the Navigant Center for Healthcare Research and Policy Analysis. Here are six key areas to watch in 2015:

1. Significant uncertainty continues over the ACA: Administrative actions and amendments have brought 38 changes to the law, and more will follow. Gaining attention will be the expansion of Medicaid and an expansion of health exchange enrollment expansion among individuals and small businesses. There may be a change in the excise taxes on devices, drugs, and health plans. The industry will also be monitoring demonstrations and pilots like accountable care organizations (ACO). The ACA’s Physician Payment Sunshine Act will bring more transparency of business relationships along with intensified efforts to reduce the costs of unnecessary care and fraud. Congress will weigh in on the law’s implementation and funding, with repeal unlikely.

2. CMS expects healthcare costs to increase 6% a year for the next decade: More employers will drop insurance coverage for employees; those keeping coverage will use higher deductible products to shift financial risk to their employees. Health insurers and employers will press for bigger discounts and shift risk to providers. Bad debt will increase for providers and margins will shrink. Demand for services resulting from the newly insured and growing Medicare enrollment will exacerbate issues of access and workforce effectiveness. Sticker shock for hospital prices and specialty drugs will continue to be big issues as employers and consumers seek more transparency.

3. Providers will consolidate into regional health systems. Many will sponsor their own health insurance plans: Alternative medicine and technological advances will drive services from beds, to clinics, to homes, and to self-monitoring capabilities. Integrating these capabilities with physicians and business partners will mean the following for hospitals: heightened risk, diversification of businesses and competencies, centralization of back office functions and supply chain relationships, increased access to capital, and a stronger focus on complying with state and federal regulations. Maintaining the status quo is not an option for most hospitals.

4. Adherence to evidence-based care will be the industry’s biggest challenge: Thirty percent of health spending goes for tests, procedures, and diagnostics that have no scientific evidence of appropriateness. The Office of the Inspector General will penalize providers that do more than what’s necessary for purposes of financial gain. Also, social media fuels the public’s appetite to know what works best, who does it well, and at what cost.

• Medicare, Medicaid, health insurers, and employers believe that shifting risks to providers is the key to reducing costs while enhancing safety and quality: Replacing fee-for-service incentives with results means using bundled payments, value-based purchasing, penalties for avoidable re-admissions and unnecessary care, and other programs. The shift is already underway. Employers, plans, and the government are driving these changes. Clearly incentives are changing. Payers find this to their advantage, but providers are threatened. Engaging physicians, allied health professionals, and post-acute providers in the transition is cumbersome, complicated, politically risky, and expensive.

• The Informed Patient: The market for healthcare is composed of household that spend $16,000 a year for healthcare. It’s second only to their housing costs, and is increasing faster than their wages. Retail clinics are experiencing exponential growth as are alternative therapies, like yoga for pain management.

Last Updated 08/10/2022

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