Predicting what will take place in 2018 with health insurance reform is little like predicting the weather or guessing the correct numbers in the lottery. Often times, you’re more wrong than right.
But given what we have seen so far, there are three trends that will likely influence the health insurance marketplace and healthcare delivery in the coming year, and make a significant difference on employers.
Coming consolidation in the insurance marketplace. Under the current version of the proposal to reform the health insurance marketplace, the Trump administration is looking to make it easier for small employers to build larger pools — even across state lines — to create insurance premium stability. These proposals represent the threat of new, yet not defined, entrants into the consumer marketplace.
Gaining market share is key to maintaining or creating insurance premium stability. We will likely see the consolidation of carriers within the industry through acquisitions. The likely scenario is that one or two carriers will be absorbed by non-insurance businesses creating a larger integrated insurance and medical/pharmaceutical product company.
Pressure on the pharmacy benefits management industry. The pharmacy industry in the United States will look to protect their economic position, particularly because the pharmacy component within healthcare has been steadily increasing. Politicians will put pressure on this industry, as this impacts the competitiveness of the U.S. employers in a global economy.
The pharmaceutical and the PBM industries will be under pressure to monitor prescription patterns of physicians and drug utilization of patients due to safety concerns. One example is the opioid epidemic and the struggle of policy experts to find a solution to the problem. Addressing the source of the medications, the medical community and the distribution industry will be components of a strategy to attack this problem as well as deal with consumption. It is worth noting that according to the most recent figures, the United States spends the most on healthcare: around $9,237 per person, according to data collected and analyzed by the Global Burden of Disease Health Financing Collaborator Network, a network of global investigators with expertise in various aspects of healthcare. This clearly raises question of safety as well as costs.
Wallet share also is highly important to this industry. It’s safe to expect either consolidation or integration of the healthcare delivery system through acquisitions. Buying an insurance carrier to gain access to insurance products and consumers, or buying medical technology companies that work directly with consumers and can then push medications to the consumers are strategies that could be introduced in 2018.
Healthcare delivery system poised to converge. The healthcare delivery system will fight off concerns over cost and quality issues. Innovative approaches to pay providers will continue to be developed because of ongoing questions regarding payment practices. There is a profit motive in every aspect of the current system, which creates a problem of optics for the industry.
Hospital systems will continue to consolidate further, even against a backdrop of anti-trust concerns, with rural and urban hospitals aggregating with large, established health systems to build integrated regional medical centers. They will also continue to purchase physician practices.
Meanwhile, physicians will continue to play an important role with their patients. But as hospital systems scale into larger medical centers, does their role with the patient improve or become disaggregated?
For both stakeholders, their business models will evolve to take into account new channels and payment approaches. Technology supported online bidding for services may also increase as physician clinics and surgery centers look to compete in new, evolving channels against hospitals for patient medical services.
Hospital systems and physicians may also begin entering the insurance marketplace with an integrated medical center/insurance product operating under the principle that medical care is a local transaction. Offering consumers medical services and an insurance product may serve their integrated approach.
For 2018, expect employers to examine the policies coming out of the federal and state governments, as well as what competitors are doing with acquisitions and strategic partnerships in the healthcare delivery system and insurance marketplace.
In the end, stakeholders want to project a public image that they are advocates for their patients and consumers — but at the same time, they also want to protect their interests. This is true every year and will be especially true in 2018.
Register or login for access to this item and much more
All Employee Benefit News becomes archived within a week of it being published
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access