HealthcareDeal ProfessionalsDealmaker OutlookHealth Care & Life Sciences

We are showered almost daily with headlines promising us that healthcare is changing. On a personal level, most of us are not experiencing much change.

In reality, a new world of healthcare competitors is emerging. New business practices are being implemented, and the healthcare industry is shifting across the spectrum in ways that affect practically every player.

From Exchanges to Medicaid expansion and provider consolidation, the future of healthcare is changing. With mid-term elections coming later this year, amidst a slow-growing economy, we can expect an intriguing end to 2014.

Here are the top trends for 2H’14:

1. The big will keep getting bigger

Acquisitions can be expected when considering the pressure of increasing operating costs, advantages of physician alignment, new models of care, limited access to financing, and the ever-increasing importance of IT investment. Many medical groups, independent practice associations, hospitals, and health systems will merge or be acquired. These transactions will drive systems to gain increased access points, greater critical mass, expanded population health management knowledge, and a stronger presence in geographic areas or regions.

2. Physician shortage rises

According to a recent article in USA Today, as the demand for primary care increases, the country will experience a massive shortage in primary care physicians (PCPs). Reports estimate that the U.S. will need 52,000 additional PCPs by 2025, with the demand driven primarily by population growth and an aging population. Offsets like people seeing their physician less often because of benefit changes, or the use of tele-health, or “e-visits,” and more common use of nurse practitioners – all these together will not diminish the growing demand for PCPs. Physician alignment will continue to develop around the key performance metrics of savings, quality and patient satisfaction.

3. Brand development and marketing will prevail

Expect to see more resources allocated to building an organization’s brand, with particular focus on enrollment timing. A strong brand is vital in order to capture and control a market. The power of name recognition, expertise, and the sense of pervasive market presence will be imperative. We can expect a barrage of social media, Internet advertising and content, and broad marketing to the public. Expect to see specific target marketing to audiences of Medicare, Medicaid, self-funded employers, and accountable care organizations (ACOs).

4. Chronic care becomes job #1

The biggest consumers of the healthcare dollar are those with chronic medical problems. The rapid rise of ACOs is intended to deal directly with this intensive issue. Approximately one in four Americans has multiple chronic conditions (MCCs), including one in 15 children. Among those 65 years and older, as many as three out of four have MCCs. 66% of Medicare beneficiaries have these severe conditions putting them at risk of mortality and declining function. As you might have expected, over 65% of healthcare spending is on this audience of people who suffer with MCCs. Hence, it is essential that providers work to improve their way to shared savings payments. So look for a more intensive focus on these consumers of care. Expect to see care practices that have an eye toward lowering hospital utilization, including inpatient bed days, length of stay, admissions, readmissions, and ED visits.

5. House calls are in vogue

Remote monitoring and care at home technology will double from $11.6B in 2011 to 27.3B in 2016, according to BCC Research. Our system simply can’t treat everyone in person. We need to treat people at home. Most people prefer to be cared for at home, not only for convenience but also for personal comfort and satisfaction … And it can save as much as 30% of the cost of care. Susan DeVore’s blog on 2014 trends in healthcare outlined “technology-enabled at-home healthcare is increasingly solving an access issue for patients. According to a recent survey, almost half of rural hospitals use virtual care or telemedicine to connect with patients who may be too far away for an in-person visit, allowing them to close the gaps in care that arise due to geography.”

6. The deployment of new technology will continue

Health analytics is more important than ever, and it will drive the future of all health systems. The growing use of telehealth, e-visits, mobile apps, electronic data warehouse, population analytics, “big data,“ EHR, and electronic prescriptions will continue.  The big question for many health systems and physician organizations that are growing through merger and/or acquisition of other providers is how to move all of the owned providers (e.g., ambulatory sites, physician practices, hospitals, post-acute, etc.) to a common or at least compatible IT platform.

7. Gradual increasing popularity in exchanges

While they have been slow to evolve, health exchanges eventually will give birth to hundreds of competitive health plans that will come from dozens of competitors. Insurance plans will expand to include health, dental, vision, life and disability. Employees and employers will have an opportunity to customize coverage and achieve more predictable spending expectations. Exchange issues will evolve around higher bad debt, lower than expected enrollment, very narrow networks, and the geographic concentration of the newly insured (where low income and Medicaid populations are concentrated).

8. Get ready for the politicians

It’s that season again, when people who want to be elected need something to talk about. Expect most of them to talk about healthcare, and to re-prosecute the entire healthcare reform debate. But be clear, despite all the political tomfoolery there will be no change to the Affordable Care Act. There may be a couple of solutions that can be achieved for calculating physician payments and for the Centers for Medicare and Medicaid to fix their flawed two-midnight rule.