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Thought Leaders: Which Major Healthcare Challenge Will Make the Most Progress in Two Years?

Alan E. London, MD, was featured in the June/July 2018 edition of MCOL Thought leaders news letter. The question asked was:

“Of the most significant challenges now facing healthcare stakeholders, such as the Opioid Epidemic, Medicaid funding/coverage; Cybersecurity, Specialty Drug Pricing, ACA unraveling; etc., which specific major challenge do you think will experience the most positive progress in the next two years, which will have the least progress, and why? ”

Over the next couple of years the focus on value and population health will continue. The positive accomplishments of the ACA have changed the playing field from FFS to value which will not be reversed. The enormous investments made in ACO care management systems need to be put to use, meaning providers systems will be looking to enter into risk sharing agreements with insurers, and with all government payers. A patient centered focus will continue to evolve from “sickness care” for chronic conditions to “healthcare and well being” as per the rebranded Department of Health and Social Welfare’s names. The growing shortage of primary care physicians will be largely filled by the increased use of advanced practice clinicians—highly trained nurses and physician assistants working in teams with physicians or practicing solo in rural areas. The remaining gap will be filled by the growing use of telehealth and artificial intelligence to fill specialty gaps and improve diagnostic accuracy. While the value trends seem likely to continue there are impediments and challenges to be met:

1. COSTS ARE MOVING BACK TO CENTER STAGE. Health Care costs which have been perking up at a 5% clip over the past few years are projected to rise to 6% annually over the next decade and could go higher. Hospitals costs and drug price are seen as the major culprits. But the growing expansion of telehealth, artificial Intelligence and health IT in general are also causing inflation pressures and could set off a new technology arms race—coupled with the continued growth of risk based contracts which will require Infrastructure investments for providers preparing to effectively manage risk. We look for a continuing push for greater pricing transparency, bundled payments with reference pricing and carve outs for high volume, high priced procedures.

2. CREATION OF HIGH PERFORMING EMPLOYED MEDICAL GROUPS WILL BECOME A TOP C-SUITE PRIORITY. Over 42% of all physicians are now employed directly by hospitals and most of the remainder are participants in hospital ACOs. Current projections indicate a shortage of thousands of primary care MDs and other specialists in the next decade. The cost of replacing a primary care physician estimated to be $500K to $1 million due to lost revenue, lower MD productivity and recruitment costs. Creating and sharing control with high performing employed medical groups to attract the best talent, and retain “tenured” clinicians will be a challenge for most executives and trustees.

3. ACCESS TO ACA COVERAGE WILL BE FURTHER CHALLENGED. There were 4 million more people added to the rolls of the uninsured in 2017. The lifting of restrictions on Association Health Plans seem likely to further destabilize the individual ACA market driving up premiums and making insurance less affordable – more bad debt for hospitals. It seems unlikely that Congress will allow the administration to remove the protections on pre-existing conditions but that is what is on the table.

4. THE AMAZON, BERKSHIRE HATHAWAY, JP MORGAN JV: HAS RAISED EXPECTATIONS, PERHAPS UNREALISTICALLY. Carve outs and reference pricing for costly cardiology and orthopedic procedures in direct contracts with employers has become widespread but has not reduced health care inflation for employers. Total cost of care contracts between employers such as Intel and Boeing have had mixed results. Author and thought leader Atul Gwande, MD, will be challenged to live up to expectations that he will figure out how to get healthier more productive employees and yet save their employers money. I’ll leave cyber security and the Opioid Crisis for others to solve.

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