Pre-header Home Page null Facebook Twitter Linked In Google + Specialty Programs Personal Insurance Life Insurance Business Insurance Employee BenefitsSite Header
Get A Quote

Keeping an eye on the prize: 12 healthcare topics to watch in 2016

 






2015 witnessed a record number of mergers and acquisitions in healthcare, with the Humana/Aetna and Cigna/Anthem mega-mergers still under the Department of Justice’s scrutiny. There were also record cyber attacks, with the biggest affecting nearly 80 million Anthem members. Investors backed digital health start-ups with more than $4.3 billion in funding. Behavioral healthcare grabbed headlines after several tragic events and pushed legislatures to introduce two new mental health reform bills. With the upcoming presidential election this year, there’s no doubt ObamaCare will remain in the spotlight as the GOP remains determined to repeal various provisions of the ACA. Here are several key companies, trends or people to watch in 2016.

 

1) Kentucky Governor Matt Bevin

Kentucky was the poster child for ObamaCare with the biggest drop in the nation of uninsured from 616,000 to 366,000 in 2014 when then-Governor Steve Beshear (D) expanded the state's Medicaid program. However, the newly elected Republican Governor Matt Bevin made clear his intentions during the governor’s race to dismantle the state’s marketplace exchange, Kynect, and to roll back Medicaid. According to The Atlantic, Kynect’s executive director estimates it would cost the state $23 million to remove the website - after $280 million in federal funds were provided to build it. The state has already made $3 billion since expansion was launched in 2014. A Kaiser Family Foundation poll shows 63% of state residents have a positive view of Medicaid expansion, 42% have a favorable view of Kynect, and 72% favor keeping the state Medicaid program status quo.

However, at a press conference last week, Bevin said he plans to file an ACA waiver to make changes to the state's Medicaid program. While he wasn’t specific regarding what those changes might entail, an ACA waiver can’t go into effect until Jan. 1, 2017 if approved. This is likely good news for the 530,000 Kentuckians covered by Medicaid since the expansion.

 

2) States grapple with Medicaid expansion

Medicaid expansion remains a hot topic in state legislatures. New Hampshire is set to debate whether to keep 45,000 residents on Medicaid this month since the state’s Medicaid expansion plan will expire at the end of 2016. Federal funds will drop below 100% if the state doesn’t vote to reauthorize it; that would cost the state $12 million in 2017. According to the Miami Herald, New Hampshire is unique because it plans to use federal money via a waiver to place low-income residents on private health plans. 

South Dakota, Tennessee and Utah – all run by Republican governors – are pushing for wider Medicaid coverage. According to the New York Times, this “has created tension with Washington that some lawmakers can no longer ignore.” As the GOP continues to hammer away at the ACA, Republican governors, like Gov. Matt Mead of Wyoming who say they still don’t like the bill, are acknowledging the practical side of it. “I’m trying to be pragmatic, recognizing that we have about 18,000 people who could obtain coverage,” Mead told the New York Times. Louisiana will be the first state to pursue Medicaid expansion this year, according to Modern Healthcare, with more than 300,000 residents eligible for coverage. If the Republican Legislature approves it, Louisiana will be the first state in the Deep South to accept expansion. There are currently 30 states and the District of Columbia with expanded Medicaid programs, of which seven have implemented expansion with a waiver.

 

3) The 2016 presidential election

With the upcoming presidential election, healthcare remains in the spotlight. A survey by insuranceQuotes.com in 2015 found 85% of respondents said ObamaCare matters in their next presidential vote, with 41% ranking it as “very important.” However, there’s almost an even split between those wanting to keep it (45%) and those wanting to repeal it (44%), according to CNBC.

Presidential candidates Hillary Clinton and Senator Bernie Sanders (I-VT) plan to modify the ACA by eliminating the Cadillac tax – which will put a 40% tax on high-cost employer health plans above $10,200 for individuals and $27,500 for families. Large groups, including most unions and the U.S. Chamber of Commerce, are against the tax claiming it will reduce employee benefits. According to CNBC, the tax will provide $87 billion for the federal government over 10 years and assist with subsidies for those who buy health coverage through government-run exchanges. Larry Levitt, senior vice president at the Kaiser Family Foundation, called the Cadillac Tax “one of the strongest cost-containing measures in the ACA.”

 

4) Consolidations will continue

This year saw a record number of mergers and acquisitions in the healthcare sector, with mergers worth $687.5 billion topping all other industry sectors, according to a report by Dealogic. Looking ahead to 2016, a report by PricewaterhouseCoopers states, “In 2016, high profile mergers and acquisitions are likely to continue, with attention focused on insurers as they work to assure regulators that consolidation will benefit consumers.” 

The largest mergers, Aetna/Humana and Anthem/Cigna, remain under scrutiny by the Department of Justice (DOJ). An AMA study released in September found the two mergers “would diminish competition in up to 154 metropolitan areas in 23 states in violation of federal antitrust guidelines.” Dr. Steven Stack, AMA president, said in a statement, “A lack of competition in health insurer markets is not in the best interests of patients or physicians.” Then in November 2015, the AMA urged the DOJ not to approve the mergers via a 17-page letter.

AMA data are consistent with a study conducted by the Government Accountability Office, which found the three big insurers hold 80% of enrollment in 37 states. Although the insurers maintain the mergers will increase efficiency and reduce costs, Melinda R. Hatton, senior vice president of the American Hospital Association told the New York Times there’s no guarantee the companies would pass on savings to consumers.

 Although Aetna and Humana shareholders overwhelmingly approved the $37 billion merger with 99% in favor of the deal, the DOJ made a second request to Aetna for more information on the potential deal, delaying the deadline to rule on the merger. However, Aetna still expects the deal to close by the end of this year.

 

5) Cybersecurity concerns will grow

After huge data breaches made headlines in 2015, pressure mounted to pass legislation for cyber security. The top 15 data breaches between January and October 2015 affected more than 110 million people, according to HHS. In addition, the HIMSS 2015 Cybersecurity Survey found 64% of healthcare organizations experienced an external cyber attack in the past year. Cyber attacks against hospitals, clinics, and physicians cost the U.S. healthcare industry an estimated $6 million a year.

The Cybersecurity Act of 2015, signed into law by President Obama on December 18, 2015 encourages sharing of cyber threat information between businesses and with the federal government. The new law includes nine pages of healthcare-related cyber security measures. A key provision includes a two-year delay on the Cadillac tax, changing the effective date to 2020.

Some health IT groups, like the College of Healthcare Information Management Executives (CHIME) and the Healthcare Information and Management Systems Society (HIMSS) applauded the new bill. HIMSS said in a press release the new act will “move the entire sector forward in addressing the many challenges of an increasingly complex health IT cybersecurity landscape.”

 

6) Will behavioral healthcare become a national priority?

With one out of five Americans experiencing a mental health illness every year, costing U.S. businesses more than $440 billion annually, a PriceWaterhouseCoopers report says 2016 will see employers prioritizing behavioral health.

 However, only 23 states increased their mental health budgets in 2015, according to an annual survey by the National Alliance on Mental Illness (NAMI). The study authors conclude, “When mental health services are cut, the inevitable consequences are more spending on homelessness, criminal justice, and crisis services. It is time for all states to invest in recovery.”

NAMI says close to 60% of individuals with mental health issues fail to get treatment every year. In addition, there is a shortage of mental health specialists, as a HHS report to Congress in early 2015 found 55% of the nation’s 3,100 counties have no practicing psychiatrists, psychologists, or social workers.

Several states have been active with legislation this year, with five passing new laws to help improve mental health systems or services (Arizona, Minnesota, Utah, Virginia, and Washington). Virginia managed to allocate close to $104 million to implement the Governor’s Access Plan to serve 20,000 uninsured individuals with mental health issues.

Two major mental health bills were introduced by Congress in 2015: the Mental Health Reform Act of 2015 (S. 1945) in the Senate and the “Helping Families in Mental Health Crisis Act” (H.R. 2646) in the House of Representatives. A House subcommittee has passed H.R. 2646 and action on S.1945 is expected this year. 

 

7) Will insurers stay on the exchanges?

UnitedHealth Group shook up the healthcare insurance market in 2015 when it hinted it may pull out of the ACA exchanges after 2016, potentially causing more than half a million people to scramble for new coverage. The news compounded doubts about ObamaCare after more than half of the nonprofit insurance cooperatives shut down, resulting in a loss of close to $1 billion in federal loans to establish them, says the New York Times.

Stephen Hemsley, UnitedHealth CEO said “We see no data pointing to improvement” in the financial performance of public exchange plans although he was "hopeful” the market will recover. Hemsley pointed to patients using their plans more than the company expected and then dropping coverage when they are healthy, destroying profits.

Kaiser Permanente, which sells plans on exchanges for eight states and the District of Columbia, said it plans to stay committed to the exchanges. If UnitedHealth does exit the exchanges, according to USA Today, it could affect prices. Levitt said UnitedHealth offers one of the two lowest-cost silver plans available to more than 40% of counties in the 38 states that use the HealthCare.gov exchange. “If they exited [the exchanges], it wouldn’t matter much to the functioning of the ACA, but it would show why increasing enrollment is so important,” Levitt told USA Today. “This market is not yet profitable for insurers, but it could become profitable if enrollment grows.”

 

8) Tech companies pushing healthcare into the future

 Technology giants, like Apple and IBM, are rapidly moving into the healthcare sector. Apple’s HealthKit Service, which gathers data from glucose monitors, food, and exercise tracking apps, and Wi-Fi connected scales, is being adapted by major hospitals as a way to monitor patients remotely and lower costs. The company says it has over 600 developers integrating HealthKit into their health and fitness apps. Apple updated HealthKit this past summer to track reproductive health, and plans to include new metrics – hydration, sedentary behaviors and UV light exposure in the iOS 9 release, according to Forbes.

 IBM made some big investments in healthcare in 2015. In April, the company launched IBM Watson Health. In August, IBM purchased Merge Healthcare - a medical imaging management platform company - for $1 billion. The idea is the 7,500 healthcare sites that use Merge’s technology can tap into the Watson Health Cloud to gain new insights from “a consolidated, patient-centric view of current and historical images, EHRs, data from wearable devices and other related medical data, in an HIPAA-enabled environment,” according to a company press release. IBM Watson is currently developing an app for the Apple Watch, CaféWell Concierge, which uses artificial intelligence to interact with the user and is geared to create sustainable behavior changes – especially for those with chronic conditions. The commercial launch is expected sometime this year.

 Google Ventures (GV) has been investing in life sciences for several years and the sector now makes up 31% of the company’s investments, up from only 6% two years ago. Some of the 2015 start-up investments included: Collective Health, PatientPing, TinyRx, and Spruce. GV also funded a smart tablet in development for the elderly and is developing its own health-tracking wristband as a medical device, not for the consumer market. The company is starting 2016 with $2.4 billion under management and CEO Bill Maris says they will continue to focus on life sciences.

 

“I'm very proud of our life science team here at GV, and this area will remain a key focus for us now and in the future. I can think of no more important mission than to improve human health and global quality of life. Everyone has a right to nutritious food, clean water, and the best medical care — and I believe our team can help by investing in the companies that will make that a reality,” he wrote in a recent blog.


9) Higher drug prices

With the overnight 5000%-increase of Daraprim this past August, it’s no wonder higher drug prices are in our 2016 forecast. In America, drug prices have reached an all-time-high. Pharmaceutical companies and the American government seem to be teeter tottering about where drug prices should rest but can’t seem to find a solution. We’ll see what happens, but our hopes are that they drug prices will remain affordable.

10) An increase in smartphone use

Another major healthcare trend of the New Year projected by Becker’s Hospital Review and PWC are what they call “bedless hospitals”. No, this does not mean you will have to stand during your appointment. As we all know, smartphone and tablet usage is only getting more prevalent all over the world, and the functionality and usage of these handheld devices are only getting more advanced.




11) Community-based care

The continual efforts on the reduction of health care costs has led to an increase in the number of smaller, community-based health care facilities and hospitals over the last few years.The number of them will continue to rise in the upcoming year.

According to the report by PWC, in the past couple of years, five of the top 15 academic medical centers have generated their own hospitals. Consumers also reported that they were completely satisfied with the smaller, community-based hospital experience when compared to larger hospitals.


12) More intentional consumer expenses

With 2016 approaching, healthcare consumers will be much more attentive to how they’re spending their hard-earned dollars next year. According to Becker’s Hospital Review and PWC, hospitals and healthcare companies will have to discover new ways to address these payment problems, similar to that of how other industries incentivize spending, such as an airline’s offered frequent flier miles or traveling points.


 


If the healthcare news of 2015 is any indication, 2016 should prove to be even more exciting.  Call Premier Insurance for all your Health Insurance Needs!

Posted 7:00 AM  View Comments

Share |


No Comments


Post a Comment
Name
Required
E-Mail
Required (Not Displayed)
Comment
Required


All comments are moderated and stripped of HTML.
Submission Validation
Required
CAPTCHA
Change the CAPTCHA codeSpeak the CAPTCHA code
 
Enter the Validation Code from above.
NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive


View Mobile Version
Site Footer
 Powered by Insurance Website Builder                                           
Owners and Team Pay A Bill Client Forms and Requests Newsletter Client Login Contact Us Client Login Feedback Privacy Policy Job Openings Testimonials Newsletter & Alerts Report A Claim Business Insurance Personal Insurance FAQs FAQs Disaster & Resources Our Partners About Us Mission Values Privacy Policy Client Services Client Payment HR360 Login Report a Claim Newsletters & Alerts Safety Resources Helpful Links Testimonials Contact Us