As we enter a new decade of healthcare, it’s worthwhile to take a minute to think about where we were in 2010. There was no Affordable Care Act. The HITECH Act mandating patient access to electronic health records was less than a year old. America’s Health Insurance Plans’ strategy to reduce waste and curb unsustainable growth was fiercely debated. And much, much more.
While we’ll certainly see continued tremendous change during the next 10 years, these are the three healthcare predictions we predict will make a big splash in 2020.
Less M&A, More Novel Partnerships
We saw a pronounced drop in the average cost of mergers and acquisitions (M&A) in 2019. Granted, 2018 was an all-time high for healthcare, and the market couldn’t sustain those levels. However, we’ve noticed a qualitative shift accompanying these quantitative trends. Strategic alliances and novel partnerships are replacing traditional financial plays. If we had to summarize these alignments in a word, it would be “complementary.” Big players and disruptive innovators are filling in for what the other lacks. It’s like finding the right puzzle piece; if you’ve got a notch, you look for a slot that fits it.
Kaufman Hall pointed this out in a recent report, “2019 M&A in Review: In Pursuit of the New Bases of Competition.” They pinpointed the “strategic focus” of today’s “mega mergers.”
“In many instances, mergers between large systems are driven by complementary capabilities. The strength of one partner’s clinical capabilities, for example, may be complemented by the other partner’s health plan capabilities. This can change the dynamic in both partners’ markets.”
Using the July 2019 merger between Beaumont Health and Summa Health, the researchers noted the two stakeholders’ complementary capabilities: “Beaumont has strong specialty clinical programs, while Summa owns health insurer SummaCare.”
We expect to see more of this activity in 2020, with greater novelty and nuance from both big-name companies and niche, specialized disruptors.
Robotic Process Automation
Healthcare contains a tremendous amount of repetitive tasks across roles. To cut down on the “administrivia,” we can incorporate Robotic Process Automation (RPA) where appropriate. These “bots” have many features and advantages, according to a report from PricewaterhouseCoopers:
- Bridging the gap between the supply chain and revenue cycle
- Ensuring controls and compliance
- Improving safety and quality
- Increasing process efficiencies
- Improving employee morale
A major opportunity afforded by RPA deals with interoperability. While application programming interfaces (APIs) can help transfer data between electronic health records (EHRs), RPA unlocks an entirely new level of integration. These bots can integrate various disparate systems, such as clinical data, lab information, patient portals, and more. In the process, this enables teams normally doing this work to focus on higher-level tasks that reduce waste. After all, medical paperwork accounts for more than one-third of healthcare spending — That’s more than $800 billion a year! Leveraging RPA could significantly reduce that number by automating workflows.
Direct Contracting
In 2019, the Centers for Medicare and Medicaid Services (CMS) enacted a number of forward-thinking, value-based initiatives, such as Pathways to Success, a federal shared savings program for Medicare beneficiaries, and Primary Care First, which is designed to elevate preventive care, foster independence, and reward outcomes.
This year, CMS unveiled a new direct contracting model. The initial application process is underway, but we expect this will get a lot of attention due to the “emphasis on beneficiary engagement and a move to capitated payment models,” as pointed out by The National Law Review. Direct contracting adds three tiers of advanced accountable care: professional, global, and geographic. The goal of these new models is to “test an array of financial risk-sharing arrangements to reduce Medicare expenditures while preserving or enhancing the quality of care furnished to beneficiaries.” This is a great opportunity for providers to enter into financial risk in a way that improves patient outcomes, reduces burden, and focuses on complex or chronic conditions, which make up 66 percent of healthcare spending.
There’s a lot to look forward to in 2020. And that’s to say nothing of the surprises and events that are inevitable in healthcare. Stay tuned and share your 2020 predictions in the comments.
I think wearable technology has more than tripled in the last 4 years too. This is one of my predictions. Because technology is rapidly growing now.
Absolutely! Check out our podcast and blog on the ethics of wearables with philosophy professor Lisa Eckenwiler, Ph.D.