New Years Predictions for Healthcare (Fortune Magazine)


The year ahead will see more strategic affiliations among healthcare organizations although perhaps fewer mega-mergers of health systems; developments in the use of telemedicine, and the launch and expansion of more perioperative surgical homes.  There will be continued efforts to repeal or weaken the Affordable Care Act.  There will be more opportunity than ever for sound leadership.

Let’s briefly consider some predictions for the year ahead in healthcare.  Below is a set of ten predictions that appeared in Fortune magazine earlier this month, along with several comments.

  1. The Federal Trade Commission (FTC) will block a major hospital merger based upon data showing clearly that consolidation leads to price increases more than quality gains. 

    On the other hand, as Philip Betbeze argues in Healthcare Delivery in 2016: A Lot of ‘Little Somethings’ Are Going to Happen (HealthLeaders Media, December 18, 2015),  There could be many arrangements between health systems to work together on specific strategic initiatives such as “ACO creation, building a continuum of care in the region, incorporating new value-based plans directly with employers, sharing of other resources, leveraging different sites of care to equalize patient volumes among facilities, and, of course, starting a health insurance plan, just to name a few.”  Anesthesiologists should hope and expect to play important roles in the launch of such initiatives.

  2. A new type of wearables will include substitutes for more expensive medical therapies, i.e., “’Wearables’ become ‘Ther-ables.’”  They will offer less invasive but highly effective treatments for diseases.  They will also reflect a business model based upon the creation of medical value, as opposed to wellness, entertainment and education.
  3. End-of-life care will be in the news and hospice use will double among accountable care organizations (ACOs) and capitated physicians.  High deductible health plans and new payment models—not to mention increasingly expensive treatments—will make it necessary for physicians to engage in more end-of-life discussions with patients.  One consequence, according to Fortune, will be increased pressure on drug pricing.  Another will be higher incomes for physicians.

    Anesthesiologists may undertake more responsibilities in the related areas of hospice and palliative care particularly as the Perioperative Surgical Home (PSH) model takes root.  In her article Palliative Care and the Perioperative Surgical Home (ASA Monitor 11 2015, Vol.79, 28-30) , Kristin Fortner, MD notes that “In 2006, the American Board of Anesthesiology acknowledged certification in Hospice and Palliative Medicine, formally designating it a medical specialty open to anesthesiologists. 

  4. A major hospital system will divest itself of its employed doctors, having avoided the move into risk-based reimbursement and losing too much of its investment.  In the wake of such a divestiture, hospitals will begin unwinding the money-losing practices they have been acquiring over the last five years, much like the 1990s when physician practice management roll-ups failed.
  5. The insurance innovation mania of 2015 will die down in 2016.  Several provider-sponsored health plans and startups will find it hard to offer competitive premiums and, as a result, will attract few members and will hemorrhage cash.  The “laws of physics” of health insurance favor large health plans that can use their market power to exact greater provider discounts and can use case managers to control their high-cost patients.
  6. The excitement over “precision medicine” will abate because “biology is too complex, and care is simply not reliable enough to benefit from the fine-tuning imagined by precision medicine.” 
  7. Hospitals will cut back on their use of population health analytics and some analytics companies will disappear because their current customers cannot obtain enough value from their analytics tools.  “In fact, most of the current value from these tools comes from upcoding and gaming the risk—adjustment system for higher payment as opposed to complication avoidance.  In addition, most providers already know which of their patients are high risk, making these tools dispensable.”
  8. The high cost of on-demand healthcare will reduce the attractiveness of this option.  High customer acquisition cost combined with the limited ability of most people to pay high prices will shrink the market for on-demand doctors and prescription drug delivery.  The high retail prices of traditional and on-demand care will help telemedicine to gain popularity, however, as patients actively seek increased access to care at lower cost.

    ACOs are expected to increase the use of telemedicine as a way to achieve greater cost savings while improving patient care quality.  (Lacktman N. 2016 Will be the Year of Telemedicine and ACOs.  Health Data Management, December 21, 2015.)  Telemedicine will also offer more and more applications for the preoperative and postoperative phases of the PSH model.

  9. PCSK9 cholesterol drugs will make Sovaldi look cheap.  PCSK9s are uniquely able to lower cholesterol to minuscule levels.  The success of weekly injections will improve patient compliance, leading to more innovation in drug delivery strategies that limit the risk of patients forgetting to swallow pills.
  10. Employers will start imposing rules to hold down spending on employee health.  Fortune foresees that “Large employers may choose which doctors and hospitals employees visit, require second opinions before high cost procedures or treatments, recommend telemedicine before going to an emergency room, or require online tools for managing their conditions and out-of-pocket expenses.”

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