This is not your father’s healthcare system.
From cars to healthcare, consumers today purchase nearly everything differently than they did a generation ago. Consider outpatient surgery. Once available only in a hospital, same-day procedures now are abundant in shopping centers across the country, providing patients with fixed-price options and increased convenience.
Patients, too, are increasingly fickle when it comes to selecting a provider. While 63 percent of patients say they have a preferred pharmacy, only 57 percent have a preferred primary care provider, and fewer than half have a preferred hospital, pediatrician or specialist, according to a 2017 McKinsey & Co. study.[1]
Understanding how healthcare continues to evolve can help providers find clarity in a shifting landscape. Along with a greater emphasis on patient choice and satisfaction, here are two other big shifts now underway in our industry:
Value-based care transition
Today, the U.S. healthcare system is moving away from a reimbursement model based on volume to one based on outcomes. For example, Medicare, which accounts for 20 percent of all healthcare spending in the United States, expects to base half of its reimbursements on outcomes by 2018.[2]
Commercial payers, too, are exploring bundled payment models, a development that’s likely to accelerate industry-wide in the next decade. United Healthcare, the nation’s largest insurer, recently announced that its bundled-payment programs are expected to total $65 billion by 2018.[3]
More out-of-pocket costs
Along with expanding coverage, a primary goal of the Affordable Care Act of 2010 was to bend the cost curve of healthcare expenditures in the United States.[4] One way U.S. policymakers attempted to curb domestic healthcare costs was by shifting more out-of-pocket expenses to patients, based on the assumption that they’ll be more frugal when spending their own money.
The most prominent example of this cost-sharing strategy is how health insurance plans on the ACA federal exchanges are categorized: Platinum-level ACA plans require patients to pay, on average, 10 percent of all out-of-pocket costs (deductibles, co-pays and co-insurance), while gold-level plans require 20 percent, silver-level plans require 30 percent and bronze-level plans require 40 percent.[5]
This cost-shifting also has affected the employer-based health insurance market in the seven years since the ACA became law: According to a 2016 study by The Henry J. Kaiser Family Foundation, 51 percent of individuals covered by employer-based insurance in 2016 had a deductible of $1,000 or more, up from only 10 percent in 2006.[6]
What does all this disruption mean? It depends on the healthcare business. But one thing is certain: Embracing these changes increases your chances for success.
Alveo provides clients with tailored business solutions that enhance transparency and improve patient satisfaction. For more information, please visit Alveohealth.com.
[1] Cordina, J. et al, “Enabling Healthcare Consumerism,” McKinsey & Co., 2017[2] Muhlestein, D. et al, “The Changing Payment Landscape Of Current CMS Payment Models Foreshadows Future Plans,” Health Affairs, 2017
[3] Whitman, E., “UnitedHealthcare expands bundled payments for orthopedics,” Modern Healthcare, 2016
[4] Goodman, J., “Bending the cost curve,” Health Affairs, 2010
[5] Webmd.com, “Your Insurance Choices in a Marketplace: FAQ,” 2016
[6] The Henry J. Kaiser Family Foundation, “2017 Employer Health Benefits Survey”
