How will the future unfold for health care in the US? While no one can predict how rapidly the industry will change over the next years and decades, major transformation is in the offing. Next week, leaders from across the US life sciences and health care industry will join Deloitte at the Financial Times (FT) US Healthcare & Life Sciences Summit to tackle this question that has become so foundational to health care.
While the science of health care has evolved over time, the business of health care has been fairly constant. But, over the past decade, we have begun to witness a transformation that has been marked by a delicate balance of drivers and constraints – trends being seen across the globe as organizations attempt to derive greater value out of technology and innovation while reining in costs.
Many nations are focused on rising health care costs. And we’re beginning to see how that pressure to reduce costs, increase efficiency, and provide value are impacting the industry on a global scale: Global health care spending is expected to grow at only 4.3 percent annually, and percent of GDP spent on health care globally is expected to decrease to 10.1 percent by 2019.1
And what are we getting for that spending in the US? Today, more US health care dollars are tied to value than in prior years. Many organizations are focusing on transitioning health care from the “break-fix” model to one focused on prevention, predictive maintenance, and outcome optimization.
We can already see the initial outcomes of this work. New partners are emerging: leading organizations are joining forces with public and private sector entities to tackle health care’s problems head on. And, organizations that have prioritized value – from leadership to the front lines – have begun to transform their approach to care delivery. These organizations are moving away from department- and specialty driven care to multidisciplinary- and multispecialty-driven care, from a focus on episodes and high-acuity to a focus on disease and cross-continuum care, from provider-centric to patient-centric experiences, and from orientation around individual physicians to a focus on teams for care delivery, involving multiple specialties, mid-level providers, social workers, and more.
Where will we go from here? For one, consumerism in health care may trigger the industry to change even more rapidly than before. Awakened by consumer-driven trends in other industries and also driven by high deductibles and high co-pays, many health care consumers are beginning to seek out organizations that approach health care with the same technological and value-driven focus as the financial and consumer products industries. In that vein, new ventures, such as Harken Health, Oscar, and Iora Health, are shaking up traditional business models and placing the consumer at the forefront.
This focus on value has also caused many health care systems to take a fresh view of how to best manage financial risk and assure themselves of a steady or growing market share. A growing share of providers sponsoring plans are focused on the converging trends of financing and care innovation.
And finally, as health care stakeholders pore over draft regulations for the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), the new strategies for physician payment in Medicare will fuel growth and changes across the system. We are not too far out from January 1, 2017, when physicians will be faced with a decision: join into alternative payment models (APMs) or go the path of the Merit-Based Incentive Payment System (MIPS). Either route presents physicians and other health care organizations with many operational and financial decisions – all focused on value.
No one can predict how the health care industry will look 50 years from now. Indeed, few can accurately anticipate what changes we might see over the next year. How the future may look hinges on a complex system of evolving drivers. What is certain is that now more than ever, the industry is intently focused on getting real value out of the dollars we spend on health care.
Source: 1EIU data tool, accessed on September 9, 2015