The top changes MCOs should expect in 2016

December 18, 2015

As the healthcare system’s historical transformation continues in 2016, managed care organizations should brace for change.

As the U.S. healthcare system’s historical transformation continues in 2016, we will see an increased focus on consumerism, cost transparency and value-based reimbursement. These developments will create both opportunities and challenges for all managed care stakeholders. Here is a preview of industry changes to expect in the coming year:

Patient out-of-pocket costs will likely increase

Healthcare costs continue to outpace inflation, creating greater incentives for insurers to offer plans with high-deductibles and narrow networks. These plan designs are offered typically at lower premiums but require much higher consumer cost-sharing levels. According to a PwC’s 2014 Touchstone Survey, 44% of employers across all industries were considering limiting their offerings to high-deductible plans within the next three years. Indeed, today many of the health plans with the lowest premiums on public and private changes have high deductibles. A 2015 Robert Wood Johnson report showed that 41% of provider networks available through silver plans on the Affordable Care Act marketplace are “small” or “extra small.”

Consumer education will take the spotlight

With consumers responsible for a greater share of their healthcare expenses, and employers, providers and insurers being rewarded for controlling costs and improving health outcomes, consumers will need to learn more about both the financial and clinical aspects of their care. As the healthcare system moves toward value-based reimbursement, consumer incentives must be aligned with those of payers and providers.

In 2016, employers, insurers and providers will allocate more resources to providing online and mobile tools to help consumers understand their healthcare plans’ costs and benefits so that they can know the cost of their treatment while obtaining the healthcare services that address their needs.  Tools that are well-designed and accessible can aid consumers in evaluating their provider networks, researching prices, learning about the importance and cost effectiveness of preventive care and screenings and improving their overall healthcare literacy and their personal health status. These tools also will be able to explain the differences between plan designs so that consumers enrolling through public or private exchanges can select the option that’s best for them.

Next: Legislative activity may impact out-of-network reimbursement

 

 

Legislative activity may impact out-of-network reimbursement

A recently implemented New York State law, intended in part to help consumers understand their responsibility for out-of-network expenses and to protect them from unanticipated but expensive out-of-network   emergency and “surprise” bills, has sparked the interest of a number of states looking to legislate similarly inspired consumer protections. Several states are exploring ways to promote price transparency, especially in cases where consumers receive unexpectedly high bills from out-of-network providers they reasonably believed were in their plan’s network. In addition, the federal government is developing legislation to address the need for price transparency on the national level.  

Industry consolidation will continue

Announcements about health plan acquisitions, as well as health systems merging, purchasing medical practices and creating their own health plans will continue to dominate the news about the healthcare sector. These developments will create challenges for organizations both big and small; many proposed transactions are likely to attract government scrutiny of their market impact. 

Navigating through an environment of increasingly bigger competitors will make it more difficult for smaller entities to negotiate competitive reimbursement rates. And medical practices will need to evaluate the pros and cons of operating independently.

The healthcare companies formed by mergers will need to create efficiencies in large, multi-layered organizations, leverage their diversity to create accountable care organizations and shift to value-based reimbursement models. Choosing the right technology and using transparent, reliable, and comprehensive healthcare cost data to make effective strategic decisions will be a key element to their success.

As consolidation reshapes the healthcare landscape and consumerism pushes the industry toward more transparency, organizations and individuals will need to be prepared to meet these challenges. Whether it is making pricing available through public channels, using data to understand markets, costs and utilization trends or developing multi-lingual mobile and online tools to aid in consumer decision-support, 2016 is sure to be a year filled with change.

Joel V. Brill, MD, FACP, is medical director, FAIR Health. He is a member of the Managed Healthcare Executive Editorial Advisory Board.