Vitals Predicts What’s Ahead in Health Care for 2016

Choice, Affordability and Consumerism Build Momentum in the New Year

LYNDHURST, N.J.--()--While it’s always hard to know where an industry is headed, especially one as large and complex as health care, trajectories have emerged that can help predict what’s ahead.

Of course, a lot can happen in a year – even in health care. But here are the five trends Mitch Rothschild, Founder and Chairman of Vitals, expects to see unfold in 2016.

1. More Hospitals Will Close. Less People Will Care.

In the past five years, over 68 hospitals have closed their doors as admission rates and length of stays have decreased. It’s also in stark contrast to the 87 hospitals that opened from 2007-2009.

And while hospital closures disproportionately impact rural, poor communities, the rise of alternative care options is mitigating the effects of these shutdowns.

The hard truth is some hospitals deserve to close. Too big for their own good, hospitals have tried to be all things to all patients. This leads to expensive machinery sitting idle (or worse: being used just to earn its rent); Departments not being equal in quality; And routine medical procedures being overpriced to subsidize specialized care done less often.

Smaller medical facilities often can - and do - provide high-quality care for less. Imaging centers perform MRIs at volume and pass the savings on to patients. (In some instances, hospitals charge 10 times more for the exact same scan.) And so it goes for colonoscopies outsourced to GI clinics, knee replacements to surgical centers.

A new wave of diagnostic apps can spot everything from ear infections to irregular heart rhythms. And for less than $50, you can consult your doctor and get a prescription from the convenience of your home via your smartphone.

Yes. More hospitals will close in 2016, but if town and city planners hone in on what the community needs - dialysis centers, ambulatory surgery centers, telehealth kiosks – then no one will mind the result: better, cheaper care.

2. Rise of the Free Agent Doctor

One of the unintended consequences of the Affordable Care Act was that it moved physicians from fee-for-service models to pay for performance. Many independent doctors proceeded to sell their practices to hospitals and medical groups.

Managing the ins and outs of coordinating patient care along with the financial sophistication of the new payment models was a daunting task for small offices and even larger group practices.

But a handful of companies, such as Privia Health and Aledade, are allowing doctors to remain free agents by going “at-risk.” Health care payers give the doctors a flat monthly payment for providing ALL health care services to patients. If the doctors can look after the patients at a cost below the fixed fee, they can pocket the difference. But inefficient doctors that exceed the monthly sum must fork out the extra costs.

Where old payment models essentially compensated doctors who over-tested and over-treated, these companies use an accountable care organization approach that reward physicians who lower costs by focusing on cheaper, preventative care and wellness services for their population.

Despite the economic exposure doctors face with this model, the offer is enticing. Over 40 percent of primary care physicians are not affiliated with hospitals or medical groups – and most want to remain autonomous.

The rise of these free agents who can practice in their community while helping patients and the system save money is welcomed.

3. “Meaningful Use” Is Going To Become Meaningful

Over the past decade, EHRs have digitized patient records, but with no interoperability between vendors, they’ve done little to foster inter-party communication, reduce inefficiencies or even mistakes.

That’s a shame. The banking industry shows the potential of EHRs that work together. An American tourist in Rome can withdraw Euros from their San Diego-based bank account with a bankcard. The transaction is logged, the money withdrawn from the account and exchanged into the local currency in less than a minute. Interoperability across international lines facilitates both travel and business.

Contrast that to current state of a patient’s health data. Basic vitals sit with a primary care physician. X-rays are with a specialist. A history of serious illnesses is the domain of a hospital. If one facility wants patient records from another, they often receive that data via a fax.

But physicians, patient advocacy groups and states are fed up with solutions that don’t hook into a cohesive eco-system and they’re calling for change. New York is investing in a data exchange program called State Health Information Network for New York or SHIN-NY (pronounced shiny). The program mandates hospitals to share patient’s health data with their regional health information organization, or RHIOs, to create a statewide network of patient information. While the system has its challenges, backers say they’re building the next public utility.

Even more telling, EHR vendors are joining the chorus. In November, athenahealth was behind the online campaign “Let Doctors Be Doctors,” that brought humor to the frustrations and obstacles created by proprietary EHR systems. That initiative signals that smart vendors know the game can’t be won alone.

EHRs need to be portable and sharable. Expect to see more vendors agree to work towards that goal.

4. A New Definition of Retail Therapy

Health care hasn’t worked like retail where buyers intelligently choose among a variety of sellers. But it should – and will.

Sellers have been setting this stage. There’s the move towards transparency for both cost and quality. More provider choice is stratifying the market like other industries with high-end to middle-market to basic services. And payors and employers are offering rewards and incentives to educate members on how to utilize health care appropriately and efficiently (it’s good for their bottom line, too).

What’s been missing has been the buyers. But with high deductible health plans creating cost conscious consumers, people are starting to shop for non-emergency care just the way they do for other commodities.

We’ve seen the effects market forces can have on health care through the lens of elective cosmetic procedures. Costs are held in check by competition. The industry develops new products and services to expand the market and compete with older services. And more providers are drawn to the market to meet the demand.

The emerging marketplace holds the promise to fix many ailments of the current system.

5. Cadillac Tax Slowed – But Rich Health Plans Speed Towards End

The Cadillac Tax was ushered in as a way to fund the Affordable Care Act, levying a hefty 40 percent penalty on employer health plans that exceed $10,200 in value to individuals and $27,500 for families.

It was supposed to go into effect in 2018, but was extended in December until 2020.

The tax essentially incentivizes employers to downgrade, or eliminate, their plans. A Kaiser Family Study says that already 13 percent of large companies have. Unfortunately, the trend towards providing less coverage will be hard to reverse, no matter whether there’s another extension or complete repeal.

About Vitals

Vitals empowers everyone to shop like an expert for their health care. We bring together cost and quality transparency along with innovative consumer engagement programs to help people select high-quality, lower-cost care. Vitals leads the market with incentive and engagement programs that pay people to shop. Our solutions achieve measurable and sustainable savings for consumers, employers and health plans. Through health plans, employer clients and our award-winning consumer websites, Vitals helps more than 120 million people each year access better, more affordable care.

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Rosie Mattio, 917-583-6349


Rosie Mattio, 917-583-6349