More capital, more Medicare Advantage plans, and more demand for value-based care expertise are just some of the big trends impacting health systems and health plans over the last year.
As we move into 2019, look for continued progress in the shift from fee-for-service to value-based care models as providers become more familiar with new payment models and better understand the technological and operational requirements for value-based care success.
Some of the broader trends that will continue to influence health systems and health plans in the coming year include:
The influx of capital. Capital markets are increasing investments in existing companies and new start-ups that target the Medicare Advantage space. New players are receiving media attention, while both new and existing plan providers are looking for ways to differentiate themselves by promising new care models or innovative uses of technology. The biggest challenge for these young companies is creating the right models that include the right incentives to affect changes in physician behavior, encourage increased provider access, and drive cost-effective clinical outcomes. Even with the right model in place, few organizations will reap the rewards of their efforts in less than three to four years—and many simply won’t reap the rewards at all.
Growth of Medicare Advantage PPO plans. Today, some markets include as many as two dozen different Medicare Advantage plans for seniors. PPO plans in particular are proliferating, as a way to attract members. However, there remain significant concerns that such “open networks” make it difficult to drive accountable care. Look for increased consolidation of Medicare Advantage plans as more providers and plans recognize how challenging it is to design competitive benefits, market and enroll members, maintain or deliver high Star Ratings, and manage member and provider support when care is delivered across a wide, open network.
Expanded use of telemedicine and remote patient monitoring. Employers and payers are encouraging employees and members to be more engaged in their health. Early interest in wearables that measure such things as heart rate and steps are gaining momentum but the ability of these devices to improve care remains to be seen. Remote patient monitoring devices to capture in-home blood pressure and weight will increase as we look for earlier detection of adverse events. Telemedicine will also gain ground in the next 12-36 months as CMS opens payment recognition for these technologies. It remains to be seen, however, whether such technologies will produce increased patient engagement and improved health outcomes. As benefit plans reach parity, using technology as a differentiator may be the next wave. The impact of such initiatives will likely be small at first, as patients become weary of the technologies and participation declines. In addition, organizations will struggle to effectively manage these programs long term, debating how to incorporate them into daily operations versus the costs and time to impact.
Realization that technology alone is not enough. In recent years, numerous organizations have implemented “population health” platforms designed to help manage their patient populations. Despite substantial investments of time and money in these technologies, many providers are coming to the realization that technology alone will not change clinician behavior. Meaningful value generation requires contracts aligned to physician incentives along with time and capital to effectively weather the transition of a patient mix shifting from fee-for-service to value.
Health systems are seeking help to launch plans. Just a few years ago, we saw many health systems struggling to understand the fundamental tenets of Medicare Advantage and other value-based care models. Today, we find organizations have a much better understanding of the risk involved in launching a Medicare Advantage plan. Now health systems are asking how to optimize these new models, gain alignment with physician incentives, manage Star Ratings, and focus on compliance in documentation and coding. Many are recognizing the need for partners to help launch their own plans by providing both the technology and playbooks for success. Health systems seeking to stand up their own plans are finding Medicare Advantage plans as a particularly attractive alternative because traditional Medicare reimbursements are flat, the risk adjustment model is well-defined, and the program is predictable.
The rebirth of managed service organizations (MSOs). MSOs are making a comeback, though they look a bit different than the original versions from the 1990s. Today’s MSOs are entering key markets to stand up primary care clinics and are offering physicians much more value than just group purchasing, billing, collection services and access to an EMR. These new MSOs are extending additional benefits, such as contracting, staffing employment, migration to new value-based reimbursement models and facilities.
As we move into 2019, look for health systems to accelerate their adoption of new models of care that support the transition to value. In addition, organizational leaders will explore options for launching new plans that help secure their health system’s footprint in a specific geographic region. Finally, in order to accelerate the transition to value, health systems will rely more heavily on the expertise of operational partners who can help drive health system success, implement the required technology-enabled solutions, demonstrate a willingness to take risk and deliver on a proven track record of success.
By Matt Cox, Chief Marketing Officer, Lumeris