Payer, Provider Watch List Stresses Vigilance in 2017

Providers and payers should prepare for more value-based payment models and significant changes in insurance coverage, a forward-looking report says.

With the healthcare industry facing an epic level of uncertainty after the 2016 election, bracing for change is the surest course for healthcare providers and payers to follow this year, according to an Avalere Health report released Thursday.

The new political reality in the nation's capital loomed large during a conference call unveiling the report, titled "2017 Healthcare Industry Outlook: Navigate the Landscape."

Elizabeth Carpenter, senior vice president of Avalere's policy practice, said the Washington, DC-based healthcare consultancy has been focusing on "a couple of key themes that we really expect to carry through the healthcare policy landscape in the coming year."

"We have really been focused on… the trend toward capping and limiting government spending on healthcare programs over time. You see that manifest itself in policies like Medicaid block grants and moving Medicare to a premium support model," Carpenter said.

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"At the same time, you really see a trend and a theme around state and stakeholder flexibility."

Vigilance will be important for healthcare providers and payers who are anticipating impacts from efforts to repeal and replace the Patient Protection and Affordable Care Act (PPACA), she said.

"When things start to happen, they will happen quickly. Now is the time to prepare and to understand the various scenarios and really be at the ready to advocate and influence your positions."

10 Things to Watch For

1. With Republicans in control of the White House and both houses in Congress, significant changes are likely in the health coverage market such as alterations to Medicaid and Medicare programs. States will likely have a larger regulatory role as well.


2. In the employer-sponsored insurance market, businesses will continue to pass more healthcare costs from businesses to workers, with consequences such as employees skipping medical services and selecting low-premium health plans with high deductibles.
    
3. Public pressure to lower prescription drug prices is expected to continue, but new regulatory efforts to lower drug prices will likely focus on market-based solutions such as efforts to improve price and quality transparency as opposed to price controls.
    
4. Despite calls from Republican lawmakers for repeal and replacement of the Patient Protection and Affordable Care Act, efforts to establish value-based payment methodologies for healthcare providers are expected to continue.
    
5. Gaps in quality metrics for some diseases, settings of care, and patient-reported outcomes are not only expected to persist but also to generate a slew of superfluous and conflicting quality measures.
    
6. Optimization of post acute care is expected to be a top priority for healthcare providers seeking to boost clinical outcomes, lower readmissions, and reduce costs.
    
7. Prescription drugs that have a high-cost impact on healthcare payers will be ripe for outcomes-based contracting this year, particularly for drugs that have easily identifiable and measurable clinical outcomes.
    
8. Concerns over healthcare spending levels will persist among policy makers and patients, and developing frameworks that help patients define value in the delivery of medical services and products will be a priority for providers and payers.
    
9. With the Food and Drug Administration approving four biosimilar medical products in 2016, this year could be a turning point for the biosimilar market.
    
10. Digital technology is expected to continue transforming the way providers and payers engage with patients, including real-time digital monitoring of patient medical conditions.