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As 2015 comes to a close, a look at this year's challenges and next year's opportunities.
At the beginning of this year, the Supreme Court decision on the Affordable Care Act (ACA), a new Republican-led Congress vowing to repeal the ACA, and an October 1 ICD-10 implementation loomed over our industry. Each of these had the potential to create havoc and reverse the huge reduction in the uninsured rate. As we approach 2016, the ACA has become more solidly established, Congress has imploded, and while it's still a little early, the ICD-10 transition seems to have gone pretty smoothly.
Some of the biggest issues that emerged during the year will likely play out further in 2016 and challenge healthcare executives in our ever-changing business.
With the ACA essentially intact, a wave of mega-mergers and acquisitions has begun. Will these lead to the lower administrative costs and a better demonstration of quality and outcomes as claimed by the companies involved? For many smaller organizations, the fear is that the result may be a far less competitive environment as theses huge corporations dominate their markets.
Pharmacy costs, always an issue, have jumped to a top concern for many executives with the extreme pricing models that have emerged. Both new "breakthrough" drugs as well as vital generic pharmaceuticals are being priced at unsustainable levels. The issue has sparked such a public outcry that it may actually cause Congress to become involved and will certainly be part of the presidential campaign rhetoric. This "break the bank" issue will have the industry scrambling next year to try and find solutions. The key will be whether Congress frees up the Centers for Medicare and Medicaid Services to take on the pharmaceutical industry-don't hold your breath.
The issue of the long-term success of healthcare marketplaces is emerging as a potentially significant concern. Do state exchanges have the scale to be successful? Will the risk pools hold up? Conservative pricing on the part of many health plans may create death spirals that are unsustainable even with the safeguards put in place. Are the products offered through the exchange viable without subsidies-for those who don't receive them? The concept for the exchanges was to create an Amazon-like platform offering purchasers easy access to information related to quality, cost, benefits and networks. Will 2016 see a move toward the fruition of this vision?
Despite much clamor, the healthcare industry is woefully behind the curve on responding to the wave of consumerism. Until the consumer becomes the true and only focal point, our industry won't change. Without adapting to this trend, the door will be left wide open for consumer-focused industries to jump into healthcare.
Already a growing concern, cybersecurity could become a major issue during 2016. Cyber thieves are becoming much more sophisticated and have better tools at their disposal to wreak havoc on healthcare organizations and their members. From member identity theft to premium interception to fraud, the cyber pirates have turned it into a multi-billion dollar industry.
The technology revolution is continuing to move into every aspect of the healthcare industry with the rising level of data interface and analysis capabilities, telemetry, apps and digital health vendors. Bricks and mortar, legacy systems and entire health plan departments are vulnerable to this movement to position as much as possible in the cloud.
For the healthcare industry, 2015 ends with less drama and change than many thought likely. Some of the biggest issues, like the proverbial can, have just been kicked down the road while others are taking on a greater force and will have to be dealt with or the industry could be crushed. Let's hope that when the end of 2016 arrives we can say that our industry has become better at meeting consumers’ needs for quality, affordability and access, and that it embraced the changes it faced.
Don Hall, a former health plan CEO, is principal, Delta Sigma LLC, in Littleton, Colorado. He is a member of the Managed Healthcare Executive Editorial Advisory Board.