2017 was certainly a dynamic year. As we kick off the new year in 2018, it’s worth taking a quick look at what we saw in 2017 and the key healthcare trends that will impact the way that healthcare entities operate in 2018.
Future of the Affordable Care Act (ACA)
The future of the ACA was uncertain throughout 2017, leaving many payers hesitant to make investments in ACA plans and some pulling out of the market entirely. After the unsuccessful attempt to repeal the ACA, the government passed a tax reform bill that includes a repeal of the individual mandate, which could increase the number of uninsured Americans by 13 million and increase premiums by 10% according to the Congressional Budget Office (CBO) 1.
While this change won’t impact the market until 2019, it will be important for health plans to use 2018 to prepare their strategy and operations. Health plans are predicted to lose a portion of their healthy members, and will need to increase their focus on risk adjustment as their populations reflect sicker patients to ensure correct transfer payments and maintain their financial viability. Organizations that can leverage technology and data to reduce costs and better understand the risk underlying their population will be able to improve their chances of success.
Mergers and Acquisitions — Increasing the Need for Better Collaboration
The mergers and acquisitions across the industry continued in 2017 and doesn’t show signs of slowing down. Just this past month, CVS Health announced its acquisition of Aetna, and UnitedHealth Group announced its acquisition of DaVita Medical Group. Plenty of other M&A activities scattered the news in 2017, many of which led to a growth in footprint of existing entities and/or the vertical integration of various organizations across the healthcare value chain. This indicates that more and more organizations will need to find new ways of successfully competing with these growing entities.
Organizations that do not have the luxury of scale or integration will need to better collaborate with others in the value chain. Improving data sharing, decreasing redundancies, and better aligning incentives are examples of strategic initiatives that will become critical to succeeding in this market that will only become more competitive.
Artificial Intelligence (AI), Machine Learning, and Analytics to Improve Healthcare Delivery
Earlier this year, the FDA assembled a new team to oversee the digital health revolution and understand the impact of big data, AI, and machine learning (more on the Digital Health Innovation Action Plan). The creation of this unit indicates that the new wave of AI-based software applications has the potential to impact healthcare treatment decisions and requires greater regulatory focus. AI and machine learning have come a long way from being just buzz words, and organizations are beginning to leverage these technologies to deliver better care while decreasing costs.
With the explosion of healthcare data from EHRs and digital health applications, technology companies are developing ways to extract relevant information from these massive data sets and present actionable insights to help organizations make better decisions for their patients. At the heart of this complicated mission is natural language processing (NLP), which enables the analysis and extraction of meaning from unstructured data sources (i.e., human narratives). Payers and providers that can successfully leverage insights from these previously untapped data sources will be better positioned to succeed. However, organizations will need to exercise caution in conducting their due diligence of these technology offerings as many vendors have popped up claiming capabilities that they do not truly possess. AI, NLP, and machine learning are complicated technologies that require significant investment in development, especially for use in healthcare—many of these assertions will need to shake out in the coming years.
Technology-Enabled Operational Efficiencies
A healthcare trend specific to our industry that we will see more of in 2018 is the consolidation of work streams across an organization to create operational efficiencies. Specifically, risk adjustment and HEDIS review has been discussed by many of our customers as two areas that need to be more closely coordinated. Both functions utilize retrospective chart review, prospective outreach, and physician and patient engagement to close risk capture and care gaps. By leveraging technology to align both functions and share data, organizations can achieve cost savings and reduce provider abrasion by eliminating the need for redundant outreach.
With the advancement of AI, machine learning, analytics, and workflow tools, organizations can utilize technology to aggregate and decipher data that is scattered across different sources and multiple entities to create a more complete patient profile. Those that invest in the infrastructure to enable data-driven decision making and streamline their workflows will be best positioned to provide high-quality care, reduce costs, and remain competitive in the evolving healthcare landscape.