How will the Healthcare Market Evolve in the Year Ahead?

In a recent conversation with Healthcare Dive, our own Patrick Pilch shared insights about how several key regulatory changes and market developments will impact payers and providers in 2016.

Reimbursement Changes Drive Patient Care Transformation

Hospitals will start transitioning over some control to the greater healthcare community—but only communities that have resources actively working to integrate care will be able to handle the changes successfully. Leading the way will be states with funding, such as Medicaid waivers. In states without such incentives, care providers developing bundled payments will seek funds to better coordinate community care. 

The Centers for Medicare & Medicaid Services (CMS) will continue its push toward value-based payment models. Its first mandatory bundled payment for hip and knee replacement treatment will go into effect in early Spring. The move is prompting hospitals to more closely examine post-acute care partnerships, creating narrower networks of skilled nursing facilities that can help hospitals achieve their cost-savings and quality goals. Further, CMS’ bundled payment strategy puts new emphasis on the Medicare Star Ratings of skilled nursing facilities (SNFs), approving early discharge of hip and knee surgery patients only to nursing homes and home health agencies with three stars or above. As a result, 20 percent of SNFs are likely to see a dramatic drop in business as hospitals look to protect their reimbursement revenues. SNFs will be forced to continuously improve if they want to stay in the game. Commercial payers will likely follow CMS’ lead.

Cracking Down on Cybersecurity

Following a year that brought four of the five largest healthcare data breaches recorded by the federal government, including breaches at Anthem and Premera Blue Cross, cybersecurity efforts in the industry will intensify. As part of the $1.1 trillion spending and tax extender bill approved by Congress in December, a new healthcare cybersecurity task force will be created to examine the industry’s vulnerabilities and potential solutions. The National Association of Insurance Commissioners already has a task force examining cybersecurity across the insurance industry, but will need a concrete means of enforcement.

Mega-Merger Ramifications

As mega-mergers of the biggest healthcare insurance payers move forward this year, newly integrated payers many not gain the economic efficiencies they sought as fast as they’d like. As a result, commercial insurers will struggle to integrate their Medicare Advantage acquisitions efficiently. If the finalized mergers are considered monopolies, it will lead to FTC-prompted spin-offs that could turn into a new wave of larger middle-market health plans.

You can read the full article on Healthcare Dive’s site: http://bit.ly/1Q6hSo0