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Healthcare Industry Outlook for 2018: New Year, New Opportunities

January 10, 2018

Healthcare organizations spent much of the past year wondering what healthcare reform might look like under a new Administration. Although uncertainty remains, one thing is clear: healthcare is increasingly becoming data-driven in its nature, transactional in its design, real-time in its speed and ultimately consumer-centric in its focus. In 2018, the healthcare industry can expect continued and growing focus by payers and providers on efforts to collaborate on new, innovative approaches to value-based care to drive greater data connectivity and enhance quality transparency among stakeholders.

Value-Based Care Is Here to Stay, but Expect Innovative Approaches

Throughout 2017, there was much discussion about the Centers for Medicare & Medicaid Services (CMS) Medicare Access and CHIP Reauthorization Act’s (MACRA) Quality Payment Program (QPP), as last year was a transition year for the newly implemented physician quality reporting program. Many in the industry voiced concerns that the QPP – and specifically the Merit-Based Incentive Payment System (MIPS) – was too complex and placed significant burden across the industry. In response, CMS Administrator Seema Verma late last year introduced the agency’s new “Meaningful Measures” initiative, which is designed to cut down on the number of quality measures so attention can be given to those considered most critical to improving care quality and health outcomes.

Payers and providers can expect more sophisticated value-based care models for 2018, which will demand actionable analytics powered by real-world data to inform care decisions. Increased data availability and improved integration between payers and providers will help smooth this transition. Providers are seeking actionable data to bolster performance in alternative payment models. Meanwhile, payers and manufacturers are collaborating on innovative outcomes-based contracts that include targeting and actively monitoring patients who can benefit from a product and ensuring appropriate follow-up to improve outcomes.

This year should also see greater opportunities for payer/provider partnerships and collaboration. For payers, supporting providers in their care networks with fulfilling MACRA’s QPP requirements and improving quality outcomes and performance is increasingly being viewed as a win-win. Health plans are identifying new opportunities to work with their provider networks to streamline quality measurement and reporting; access actionable, patient-level insights; accelerate quality and risk gap closure activities; partner on EHR and portal linkage; and align value-based arrangements to drive efficiencies.

Increased Consumer-Centric Care and Quality Transparency Will Take Hold in 2018

As patients take on more healthcare costs, payers and providers can expect patients to continue demanding greater access to data on cost and quality. Payers and providers understand they need to provide both pricing and outcomes information to patients so they can make informed decisions about their health. Providing patients with more accurate cost information supports greater engagement in their care, which can improve outcomes and potentially help providers avoid the bad debt associated with patients unprepared to cover healthcare costs.

The emerging trend of health plans coordinating quality and risk program strategies also speaks to a desire for greater transparency synergy, enabling a system-wide view of clinical and disease diagnosis documentation to drive greater utilization efficiency and faster gap closure.

Greater Connectivity and Access to Data will Help Drive Improvements

According to Managed Healthcare Executive’s 2017 State of the Industry Survey, only 12% of respondents say their organization is excelling at using big data to improve quality and reduce costs. And although 46% of respondents say they are making progress in this area, work remains to be done. In particular, while there is no shortage of healthcare data being collected from myriad sources, that data is often disparate and scattered, lacking a “single source of truth.”

Access to data-driven insights is key to establishing a true 360-degree view of a patient and ensuring that care decisions are based on the most pertinent, complete and timely patient-specific data. Expect continued focus in 2018 on enabling access to an aggregated view into individual- and group-level quality, operational, utilization and financial performance.

Last year also saw greater investment in addressing social determinants of health (SODH). Healthcare organizations can expect SODH to come to the forefront of efforts in 2018. Thinking more holistically about patients during care plan development will help improve outcomes and support stronger engagement by patients in their care.

This year will bring new opportunities and challenges, including the need for a proactive approach to policy change and renewed focus on how we can use data to better understand patient populations, measure value and inform care delivery. As transparency into the many facets of healthcare increases, the pace of the industry’s transformation will accelerate, ultimately placing the consumer at the center.

For more about the trends impacting the healthcare industry in 2018, view Avalere’s new on-demand webinar, 2018 Healthcare Industry Outlook: Elevate Your Perspective.

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