Because of both continuing and new challenges in the healthcare industry,
more transformational changes will be required for success in 2015 and
beyond. Replacing the competitive model which has driven hospitals, health
systems, and physicians for decades will be an environment requiring collaboration,
accountability, and an alignment of incentives for all stakeholders to
do what is necessary for survival and growth. Our predictions for 2015 are:
1. Inpatient acute care volumes will continue to decline. The rate will
equal the 2014 decline of between 5% and 8%. This will require further
expense reductions, mainly in labor costs, and will result in the closure
of more hospitals, most likely small and rural ones. We expect that there
will be increasing labor strife as reductions in personnel continue.
2. More free-standing and retail-related clinics will open. Because of
the continuing need for primary care access points, new entrants in the
market will continue to grow. The percentage of market share garnered
by the Targets, Walgreens, CVSs, Walmart and others will grow. Free-standing
Emergency Departments and Urgent Care/Convenient Clinics will also continue
to grow but additionally will be pressured to reduce their hospital like
prices in order to compete with the non-traditional clinics.
3. Do-it yourself medicine will increase and people may also seek alternative
and complementary treatment plans. The use of home diagnostics will grow
as their scope and availability increases, and the alternative health
retail centers will continue to grow market share for both their sick
and well-care products.
4. More hospitals will collaborate with health systems having a strong
national brand. These arrangements will focus on tertiary and quaternary
product lines with the hope that standard high quality outcomes can be
achieved and that their local market share will stabilize. The preferred
national partners will include Mayo, Cleveland Clinic, and Geisinger.
5. The use of telemedicine will increase. This growth will not only occur
in the acute settings, but will migrate to the outpatient clinics, sub-acute
settings, nursing homes, and into the home care arena. We expect that
the first wearable diagnostic bracelet will be tested this year; it will
soon become a standard monitoring device and gain rapid acceptance by
ACOs for at-risk members.
6. Physician Extender numbers will increase rapidly, as well as their scope
of responsibilities. Nurse practitioners and physician assistants will
continue to fill the primary care void, and many state licensing boards
will continue to increase their scope of responsibilities and prescription
7. More payments for services, both from government and private payers,
will be driven by value. Rewards for performance outcome will require
more transparency and sharing of data, and will drive both inpatient and
outpatient reimbursement formulae.
8. The benefits of ACOs and the feasibility of bundled payments will be
studied carefully. Although both of these strategies will grow, the rate
of growth will moderate as they are scrutinized.
9. Wellness services and health management programs will increase. The
challenge will be motivating people to follow life-styles that promote
well-being. Employers will continue to align incentives to encourage their
employees to stay well thus decreasing their overall healthcare costs.
10.Non-invasive technologies will continue to be developed. More growth
will occur in the surgical arena where prior procedures requiring large
incisions and long lengths of stay will increasingly be done through small
scopes and needles. This will also permit the procedures to migrate from
an inpatient stay to an outpatient procedure.
11.Physician integration will be the number one focus for CEOs and leadership
teams. Because the value equation is now the driver, quality over costs,
the critical role of the physician is front and center. Strategies and
tactics will continue to be devised and implemented in the hopes of transitioning
physicians to partners rather than customers.
12. Some diagnostic and treatment modalities will continue to be scrutinized
for overuse and/or misuse. The efficacy of numerous therapies are presently
being questioned, and national societies are publishing guidelines to
address these concerns. Specific areas being examined will continue to
be cancer treatments, radiology, some lab studies, and even some surgical
procedures, including knee replacements and prostatectomies. The effectiveness
of proton therapy will also be studied, and the number of these centers
will not grow during 2015.
13. Epidemic awareness programs will increase. Due to the sensitivity raised
by the Ebola cases, a more integrated and effective approach to handling
epidemics will be developed at regional, state, and national levels.
14.The Accountable Care Act will continue to be challenged. There is still
a large contingency of stakeholders who do not support the ACA and with
the change of control in the United States Senate, the number of challenges
to the policies in the ACA will rise. Lawsuits will continue to be filed
and the U. S. Supreme Court will consider the legality of several aspects
of the law.
15. Tax reform will include healthcare. With tax reform on Washington’s
agenda, healthcare will not be left untouched. Possible areas of change
might include making not-for-profit hospitals or some of their components
taxable (similar to what was done in the past to Blue Cross) or taxing
healthcare benefits to employees.
16. Increasing deductibles and greater patient liability will have the
intended as well as unintended consequences. Harvard professors have recently
stated their displeasure with increasing responsibility for healthcare
as documented in the New York Times. This is just a preliminary peek at
the consequences increasing patient financial responsibility will cause.
On December 31, 2014 the Department of the Treasury released the final
Section 501(r) which provides guidance for 501(c)(3) hospitals on providing
community benefits. Employers, providers and government are all going
to feel the impact of patients’ increasing financial stress caused
by the resulting healthcare debt of higher deductibles. The proponents
of increased patient financial responsibility will see “consumer
behavior” change as consumers seek better marketplace alternatives.
17. Increasing transparency will be challenging for the entire healthcare
industry. Consumerism will challenge all participants to change historical
practices. More regulations will emerge as a result of consumers’
interaction with the delivery system.
18. Private exchanges will grow more rapidly than expected. Employers and
other groups will seek the “best deals” and private exchanges
will be the beneficiaries.
19. The virtual hospital will be tested. This will be the next and a major
arena for telemedicine application and will extend primary as well as
specialty care access 24/7. It will be particularly useful in rural areas,
and, while addressing patient care accessibility, it will also improve
quality of life for care-givers. Ironically, while it will be developed
to address healthcare access in rural areas, its capabilities will also
contribute to and accelerate the closure of rural hospitals.
20. Certain diseases will become significantly more costly to manage due
to life extension. Of particular concern will be the growing time and
financial burden of many chronic diseases, such as Alzheimer’s,
for patients, family care-givers and society.
21. The long existing landlord /tenant model for physician-hospital relations
will finally complete its demise. The complexities of care in today’s
environment will no longer permit the continuation of the traditional
model which allows physicians/clinicians to practice independently of
the hospital/surgical center interests and involvement. The real estate
model is near death.
22. Increasing investment in information technology will be made by non-traditional
as well as traditional providers at the same time that greater demands
for improved IT performance are expressed. Large information technology
and software companies will begin, reluctantly, to respond to more and
increasingly strident requests for improvement in outpatient data capability
23. Innovation in healthcare will increasingly come from people outside
of the industry. An entrepreneur, unbounded by conventional thinking,
who is connected to four billion people worldwide on the internet, is
increasingly more creative at solving problems and ultimately more powerful
than an entire staff of “innovation engineers” housed within
a health care provider or hospital. The tipping point for the final demise
of incremental improvement is approaching.
Needless to say, 2015 will continue to be a challenging year for healthcare
delivery organizations, suppliers and vendors, insurance companies, and
yes, patients and their families. Even if all these predictions become
reality, transformational strategies undertaken now and with a visionary
stance can be implemented. These strategies will contribute to make the
healthcare environment one of higher measurable quality and safety, more
affordability, and with more accessibility.