During their headline session at the AMCP conference, presenters from Avalere Health shared their predictions for "three futures" in the healthcare market.
The healthcare market is rapidly changing and evolving. Looking ahead, the changes happening now will shape how payers, patients, and providers will approach healthcare delivery and insurance in the next few years.
During their headline session at the Academy of Managed Care Pharmacy Nexus 2015 in Orlando, Elizabeth Carpenter, vice president of Avalere Health, and Joshua Seidman, PhD, senior vice president of Avalere Health, shared their predictions for "three futures" in the healthcare market.
"We are really, I think in many ways, moving from the past of being of a passive, reactive nature in healthcare, to one in which all parties are becoming more proactive," said Seidman, during the session entitled, "Three Futures-What Will Healthcare Look Like in Three Years?”
The Affordable Care Act (ACA) included several insurance market reforms, such as guarantee issue, essential health benefits, actuarial value requirements, out-of-pocket limits, and transparency and reporting requirements.
These requirements, said Carpenter, constrained much of the flexibility plans had to keep premiums down. As a result, many plans are looking more closely at benefit design (formulary design, cost sharing, and network formation), and exploring how they can make their products more competitive and affordable.
When exploring benefit design, Carpenter said it's important to look closely at the health insurance exchanges, as they have brought forth new and innovative ideas. "What we see in the exchange market actually could impact other markets over time," she said.
Read: More plans act on private insurance exchanges
Here are some of the specific areas to watch within the exchange plans:
Overall, the "benefit design evolution" will continue to evolve in the next few years, she said. "Payers face this incredible imperative to manage costs in the mixed of a really heightened regulatory environment. Consumers have more skin in the game. ... And providers are increasingly held accountable for cost and value standards."
NEXT: Alternative payment models
Even before the ACA, much had been done in the private and public sector to lay a foundation for value-based care, said Seidman. This started off with pay for reporting, and progressed into pay for performance.
With the passage of the ACA, a series of value-based models including the Medicare-Shared Savings Program, the Hospital Value-Based Purchasing Program, and The Physician Value-Based Payment Modifier went into effect. Such payment models will continue to evolve and accelerate within the next few years, he said.
Another change that will accelerate the move toward value is the passing of the Medicare Access and CHIP Reauthorization Act (MACRA) legislation earlier this year, said Seidman. MACRA spells out annual updates to payments for the next several years.
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Beginning in 2026, payment rates will be updated by .25% annually for providers that participate in a new Merit-Based Incentive Payment System, or by .75% annually for providers that participate in alternative payment models. In addition, physicians can receive a 5% bonus for participating in alternative payment models.
"All of this has really changed the way that physicians and other providers are thinking about their relationship with their patients, and it's very interesting to watch how providers are responding to this," said Seidman.
NEXT: The changing role of consumers
The final change that the presenters discussed during their session is the growing role patients are playing in healthcare. "One of the things that has definitely forced the consumerism issue is the public exchanges under the ACA going live," said Carpenter. "You are putting people, for the first time, in charge of making their own health insurance decisions."
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As patients take more control over their healthcare and become more informed about the costs associated with that care, payers face new challenges and opportunities, she said.
It could provide payers with more chances to interact directly with consumers, demonstrate value, and find innovative ways to engage patients.
At the same time, presents a difficult, new dynamic for payers. Payers that are used to selling health insurance to an HR representative and an employer, for instance, will need a different skill set to engage with patients on a private exchange, said Carpenter.
To assist consumers with plan selection, she said plans should consider the following tools:
These are all things that public exchanges are working on that private exchanges should consider, said Carpenter.