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DECEMBER 16, 2015 – The growth of retail clinics, the public acceptance of telemedicine, the large-scale employment of physicians by hospitals and accelerated operational improvement … these were some of the trends I wrote about in 2015. What’s on tap for the New Year? Here are some predictions.
1. Merger mania will continue.
Mergers among the Big 5 insurance companies made headlines in 2015, and so did consolidation among healthcare providers. Medical groups, hospitals and health systems need leverage and operating efficiency to compete successfully in the rapidly evolving environment, so we’ll see continuing M&A activity in 2016. There are the right ways to do it, and the wrong ways to do it. Fortune magazine predicted in a Dec. 4 article that the Federal Trade Commission will block one major hospital merger after considering data that consolidation contributes more to price hikes than to quality improvement.
2. Healthcare consumerism will increase, empowered by mobile technology.
Price Waterhouse Cooper’s (PWC) Health Research Institute reports rapid growth in the number of consumers with healthcare-related apps on their smartphones—from 16% in 2013 to 32% today. With the aging of our population and the pace in which mobile technology is being adopted these days, it’s clear that this trend will continue, especially as today’s higher deductibles are causing increased consumer sensitivity to healthcare costs. It’s clear that the least transparent healthcare organizations will be left behind as this trend—still in its infancy—takes hold.
3. Healthcare will have to become more transparent and that transparency must be meaningful.
Regardless of your stance on provider rankings and consumer reviews, one thing is certain: They are only going to become even more prolific in 2016. In one notable 2015 example cited in a Becker’s Hospital Review article, Consumer Reports published infection rates of more than 3,000 hospitals, along with ratings that include patient safety scores, patient experience, patient outcomes and other metrics. We’ll see more published ratings like this in 2016. Like it or not, the argument that they empower patient decision-making and hold providers accountable will be increasingly difficult to dispute.
4. Consumers will expect more from their physicians.
I heard an interesting story from a colleague this week that some patients in a hospital telemedicine program rated videoconferencing more personal than an actual bedside visit by a physician. Why? Because the physicians being beamed in to the room were focused, undistracted by phone calls or pagers, and not in a hurry to complete their rounds. Wise physicians will take heed. With rising consumerism and transparency in healthcare, competition is rising, too. The most engaged and engaging physicians will be the winners.
5. Behavioral health programs will grow as will the reimbursement for these services.
In its 2015 report, PWC’s Health Research Institute named the growth of behavioral health as a key trend in 2016, with one out of five American adults experiencing a mental illness every year, costing U.S. businesses more than $440 billion annually. As a result, employers are moving behavioral health to the front burner, and demand will increase with legislation on the books now requiring insurers to provide behavioral health benefits. Along with this interesting trend comes a study showing a high percentage of consumers willing to use telehealth services to consult with a mental health provider.
At Stroudwater Associates, our service lines are geared to help healthcare organizations understand and successfully act upon trends like these. We have an active M&A and affiliations advisory practice. We also guide healthcare enterprises through strategic development to be sure they are focusing on and responding to important new trends like value based payments, consumerism and behavioral health. We also provide guidance on optimizing operating performance along with the revenue cycle in order to reduce the growing impact of patient out-of-pocket expenses and high deductibles.
If you would like to learn more, please contact me at 404-647-0803 or TBauer@Stroudwater.com. Best wishes for a joyous holiday season and a healthy 2016!
Terry Bauer joined Stroudwater in 2014, where he leads the Strategy Practice Team at the firm. In addition to strategy, he dedicates his time to affiliations, M&A, accelerated operational improvement, revenue cycle management and physician/hospital alignment. Terry also advises innovative healthcare technology and services companies on strategy and capital raising. He has been a healthcare leader and an operator for over three decades working for and running companies that provide high value business services to hospitals, physicians and payers. Terry posts once a month on his LinkedIn page, www.linkedin.com/in/terrylbauer, and on Twitter @TerryLBauer.