In 2025 – a mere eight years from now – you’re probably not going to recognize the health insurance industry. While legislation and government mandates will likely continue to slowly shift our industry, we speculate that the tectonic movements will be driven largely by two diverse generations of health care consumers. I recently explored this topic with three of my colleagues during a recent panel discussion at America’s Health Insurance Plan’s (AHIP) annual Institute & Expo.
Medicare: On one end of the generational spectrum, more than 26 million people will age into Medicare over the next dozen years or so, according to Deloitte Center for Health Solutions research. These beneficiaries will likely continue to challenge our health economy from a cost and quality perspective, bringing a potential unprecedented burden on the system. We believe this will encourage innovation in care delivery and cost management.
These Medicare beneficiaries of the future, who will likely largely be enrolled in Medicare Advantage (MA) plans, can drive advancements in the coordination of care, chronic-disease management, in-home care delivery and other lower-cost care delivery, and preventative techniques. Health plans managing those MA members will likely have to manage cost and quality at new level of sophistication.
However, the Medicare member of the future may also be evolved from a consumer perspective. A large portion of the age-in population are in the workforce today, and are high utilizers of digital consumer technologies.
Millennials and Gen Z: On the other end of the spectrum are the millennials and Generation Z consumers – today’s teens. We speculate that as these consumers age into adult-hood, they will continue their demand for immediate results for everything – including health care – through ubiquitous, omnichannel connectivity, whether from connected devices, connected cars, connected homes, or connected work environments.
We anticipate this generation will also demand vast improvements in consumer technologies across all consumer domains, including health. Devices that we now see as fun and playful experiments in the health ecosystem – such as wearables, digital pills, the connected contact lens, and in-home monitoring devices – will likely be more integral to the health care delivery system. The Deloitte Center for Health Solutions’ paper, Top 10 health care innovations, features rapidly shrinking wearables and medical devices. Such innovations in consumer technologies can benefit both the young and the aging consumers as they can allow care to be delivered outside the acute setting and can allow preventive medicine to become more mainstream.
By 2025, consumers on these opposite ends of the spectrum will likely define the health care delivery capabilities of the future, and the rest of us can be beneficiaries of these changes.
Risk and collaboration will likely be key to success
We foresee an acceleration in collaboration and risk-sharing between health systems and health plans – we anticipate the vast majority of payments to providers will be value and outcome based in this future.
As Medicaid enrollment expands and more of the population ages out of commercial coverage and into MA, health systems can benefit from taking on more financial risk. They will likely have an incentive to form tighter collaborations with health insurers. Health systems that have a trusted brand may be attractive partners for health plans. These collaborations can have the potential to be a “win-win” scenario for both the insurer and the provider – with insurers benefiting from a clinical expertise and a brand the consumer trusts, health systems can benefit from health plans’ deeper pockets, advanced technology and tools, and broad scale. As value-based payment can create greater focus on outcomes, collaborations between health systems and health plans will likely be important.
Get ready for value-based everything
Health care’s “triple aim” is a concept that stretches back more than a decade. As consumers take on a bigger role in making health care decisions, health insurers may be evaluated on their ability to impact health care cost, quality, and access. We envision a future where the value proposition in the health ecosystem will be driven by the ability to meaningfully contribute to the triple aim – whether a health plan, a health system, a PBM, or life sciences company.
As consumers continue to make more of their own health care decisions, they will likely take on more financial pressure. That may prompt more focus and attention on the value of their care. In this future, the consumer can become the ultimate arbiters of their health care choices.
Over the next eight years, the US health system will likely experience significant change – we believe for the better. While it is still too soon to know if Republican lawmakers on Capitol Hill will succeed in their efforts to repeal and replace the Affordable Care Act, we anticipate significant change to the industry driven by the emerging health consumers of 2025 and their increasing demands on the health economy.