“Fateful Eight” Trends to Watch in 2016

by Clive Riddle, January 8, 2016

With apologies to Quentin Tarantino, here are a “Fateful Eight” collection of trends to watch in the business of healthcare for 2016, in no particular order:

1. Prescription drug slice of the cost pie

While the overall healthcare cost trend has been relatively fit and trim for more than a decade, prescription drug costs are consuming a growing portion of the healthcare cost pie, and threaten to send the entire cost structure back to more obese levels.  Watch for a continued shift in priorities and resources towards managing this sector. A December MCOL e-poll on managing prescription costs, co-sponsored by Keenan, found that 41% of respondents felt the prospects for managing prescription costs going forward will be somewhat difficult and challenging, and 56% felt the prospects will be very difficult and challenging. 71% would place a higher priority on dedicating new or additional resources in managing prescription costs, compared to dedicating resources to managing other components of health care costs, and another 16.5% would place the highest priority in this regard.

2. Aftermath of health plan consolidations

There really can’t be the same level of mega health plan mergers in 2016 to follow up on the 2015 Aetna-Humana; Anthem-Cigna; and Centene-HealthNet deals, because we’re running out of separate mega health plans to merge with each other. But 2016 is a key year regarding health plan mergers none the less, as regulatory review of these deals gathers steam, individual health plan markets shake out, and the merged mega plans unveil a more detailed vision of health plan life post-merger.

3. Onward march of health system m&a

But merger and acquisition activity will still flourish in 2016, on the health system side, particularly as systems continue paths towards integration as they acquire and manage more and more medical group practices.

4. Private sector embrace of two ACA concepts

For all the political pushback the ACA continues to experience, its noteworthy that two ACA concepts have morphed over into the healthcare private sector with gusto.  Private health insurance exchanges and commercial accountable care arrangements have both evolved from the ACA primordial stew to become significant private sector initiatives that will play in increasing role in 2016.

5. Pay for Value Initiatives

But as significant as the rise in public and private accountable care arrangements have been, the biggest action in the provider reimbursement and care delivery arena is cast in the wider net of pay for value. While encompassing a range of type of initiatives, all things pay for value will be what to watch for in payer-provider relationships in 2016.

6. Healthcare Political Theatre

It’s a presidential election year. ACA opponents will continue pushing back on all possible fronts. While public opinion polls show the country is still quite divided on the ACA, polls also show it is slipping some in relationship to priority of other national issues.  But this won’t stop healthcare from being a featured actor in political theatre for 2016, casting ripples of uncertainty for the prognosis of the healthcare environment post-2016.

7. Quiet but big adoption progress for all things mHealth

Perhaps all the big things that can be said for the moment about mHealth have been said. While 2016 might not be the year that big new, new shiny things will be touted to change the face of healthcare forever, a more quiet revolution will take place in 2016 as more and more consumers continue to adopt various apps and technologies that are out there already, just waiting to gain traction.

8. The ever growing burden of consumer cost sharing

The ever upward spiral in the burden of consumer cost sharing is not news. Perhaps though, this growing burden might relate to the parable about the frog in the frying pan, who just sits there if the temperature is just increased one degree at a time. While things aren’t boiling over yet, the pace of marketplace and regulatory reactions to this issue should pick up in 2016.