Risk & Compliance

2017 Promises to Be a Wild Year for Health Care

The fate of Obamacare is far from the only important thing to watch in the health-care arena this year.
Brian Marcotte and National Business Group on HealthJanuary 6, 2017
2017 Promises to Be a Wild Year for Health Care

In the health-care arena, this new year is shaping up as one that’s likely to be filled with uncertainty, opportunity, and change.

Brian Marcotte

Brian Marcotte Health care

For large U.S. employers like the 420 that are members of the National Business Group on Health, the issue of greatest concern is obviously the uncertainty over the fate of the Affordable Care Act. However, that’s hardly the only important matter that bears watching:

Will the move to value-based payments lose momentum? Repealing the ACA and thereby changing (again) how consumers access health care, without reforming how health care is delivered, will not address the escalating cost of coverage or the long term affordability of health care for Americans.

President-elect Trump’s choice for Secretary of Health & Human Services, Rep. Tom Price (R-Ga.) — a doctor and a determined opponent of the ACA — raises questions about whether alternatives to the current fee-for-service payment model will remain a priority.

Both the public and private sectors need to step up the move to value-based payments in order to reach a tipping point that will transform health-care delivery and remove the perverse financial incentives that drive up the cost of care without improving quality.

What will be the fate of proposed health plan mergers? A court ruling on the Department of Justice’s challenge to the Aetna/Humana and Anthem/Cigna mergers is expected soon, and depending on the rulings, the DoJ may appeal. 

The stated arguments for the mergers are that they would bring greater leverage in negotiations with health-care providers, accelerate the move to alternative payment models, and help reduce overall health-care costs. The stated arguments against the mergers are that the resulting larger insurers would be slow to change and innovation would be stifled.

While there’s been great focus is on these mega-mergers, employers are just as concerned, if not more so, about the rapid rate of consolidation in local markets among health-care providers. But at the end of the day, whether it’s consolidation at the insurer or provider level, scale for the sake of scale will only result in higher costs. Scale that is leveraged to accelerate the movement to value-based purchasing, better care coordination, and population health management should be embraced.

Will pharmacy pricing remain in the spotlight? We have seen high price increases across categories in pharmacy, including some generics and compounded medications, as well as brand medications — and especially specialty pharmaceuticals.

Expenditures for specialty drugs are growing faster than any other component of health-care spend. While only 2% of the population uses specialty drugs, they are a top driver of total health-care costs for most employers.

The current pricing model for these drugs is antiquated, unsustainable, and unaffordable, and criticizing it has become popular among politicians and the public. Advancing risk-sharing and other value-based pricing models will be an area of focus in 2017.

Consumer engagement remains a top concern for employers: As much as we would like employees to become sophisticated consumers of health care, the delivery system is too complex and employees do not engage with enough frequency to ever become sophisticated consumers. Concierge, navigation, and decision-support services are stepping in to address this need. We see this as a growing trend in 2017.

Growing employer interest in workforce well-being: A growing number of companies are beginning to look at investments in employee well-being — which encompasses not only physical and mental health but also emotional and financial well-being, social connectedness, and job satisfaction — as an integral part of their global workforce strategy.

Much like investments in training, development, and safety, employee well-being can play an important role in deploying the most competitive, productive, and efficient workforce possible.

And now, what about the ACA? Even though the public exchanges have been experiencing higher average premium increases and fewer insurance choices, a repeal of the ACA, even with a long transition period, could trigger a death spiral in the public exchanges as insurers exit to avoid being the “last man standing.”

However, there are clearly elements of the ACA that should be repealed, such as the excise tax on employer plans, the employer mandate, and reporting and administrative requirements.

All of these placed unnecessary burdens and costs on employers that were already providing affordable, quality health-care coverage for their employees. This is something the Business Group will be monitoring closely.

Brian Marcotte is the president and CEO of the National Business Group on Health, a Washington, D.C.-based nonprofit association of 420 large U.S. employers.