The last 12 months have been a roller coaster ride for the healthcare industry. Medicaid, in particular, has experienced a number of proposed and confirmed structural changes which will result in reverberating effects on consumers, health plans, hospitals and more. As we look to the next year, we can expect to see Medicaid continue to make headlines.
Here are three Medicaid trends healthcare executives should watch for in the coming year:
1. Increased focus on social determinants to improve care and outcomes
Social determinants of health (SDOH) such as hunger, homelessness, poverty, lack of transportation, access to clean water and lack of information about the healthcare system have an enormous effect on patient outcomes. Studies estimate SDOH can be responsible for as much as 80% of an outcome.
Most agree that this is a hugely important factor in effective patient care, but providers already suffering from administrative burnout may not see addressing these social issues as part of their duty of care. The current administration is also unlikely to increase spending on social programs in these areas, so what’s the solution?
State Medicaid programs may provide the conduit for using SDOH in care plans. Some state Medicaid agencies such as California and Washington are employing Section 1115 waivers to set up innovative “whole health” programs that improve coordination between health providers and agencies that address patients’ social, behavioral and physical needs. Additionally, earlier this year, North Carolina released an interactive map showing social determinants of health factors, and the State’s Medicaid agency included SDOH components in their Managed Care Request for Proposals. Expect to see more of these initiatives from both states and the private sector as new companies enter the healthcare market with a desire to disrupt the status quo.
2. Improving the patient experience and technology transformation 3
The renewed focus Medicaid providers and payers have on providing better customer service to patients, will likely to continue, emphasizing technology’s ability to transform the way healthcare is delivered.
Patients on commercial insurance plans and Medicaid will now pay more out-of-pockef for their care, resulting in higher expectations when it comes to their providers and payers. These higher expectations also mean members will be more willing to shop around until they receive good value and service.
The growing competitive landscape is also a driver of this shift. Big tech players like Apple and Amazon, along with Google sister companies Verily and Cityblock are entering the healthcare marketplace. With their solutions beginning to pick up in popularity, there will be increased pressure on existing providers and payers to boost patient satisfaction and deliver improved customer service.
3. Value-based purchasing delivering efficiencies
The key to a more efficient healthcare system lies within value-based purchasing (VBP). In short, VBP rewards providers for quality rather than quantity.
Currently, payment for fee-for-service and capitated plans are based on the volume of services provided, whereas VBP reward improved patient health outcomes and disease avoidance.
The possible benefits are significant as patients could potentially spend less to achieve good health, due to the increased focus on big-picture outcomes rather than treatment of a specific symptom. Additionally, in the long run, it’s less expensive to help a patient avoid a chronic disease they may be at risk of developing than it is to treat that disease over their lifetime if they acquire it.
An additional benefit of focusing on quality rather than quantity is that it tends to increase engagement with the patient, which has a beneficial effect on outcomes.
Though there is great interest in the model, it’s not been without its growing pains.
Some challenges associated with VBP are:
- Provider’s limited budgets and insufficient funding make building a solid foundation for VBP difficult.
- Apathy due to decades-old payment models, practices and habits.
- Providers are reluctant to increase financial exposure through shared risk as a result of already thin margins.
- In July 2018, providers and HHS told Congress protections in the Stark Law were necessary as providers may inadvertently violate its anti-kickback regulations under VBP models.
In order to realize benefits from VBP, providers will need to:
- Reimagine old operational and payment models.
- Identify and reward cost-saving innovators.
- Enforce effective tracking of quality measures.
- Utilize resources more efficiently through the use of technology.
As this transition is made, there may still be a few bumps in the road, but eventually VBP should deliver a more effective and efficient patient-centric healthcare system.
What to expect moving forward
Healthcare stakeholders like providers, payers, social services, and patients, will experience the impact and challenges of these issues in the coming months. Also, the split House and Senate is likely to create additional uncertainty and turbulence in the current political climate. However, with healthcare cited as the number one issue on voters’ minds, it’s imperative all parties keep the big picture top of mind and work together to create an efficient and functional healthcare system for all.
Bill Lucia has served as chairman, president, and chief executive officer of HMS since March 2009. He joined the company in 1996 and continues to lead through the evolving healthcare landscape, demonstrating the ability to formulate and implement key strategic initiatives.