Avalere Health broadcasted its annual Healthcare Industry Outlook for 2020 on January 9. The hour-long discussion included insights and discussions on some of the top healthcare topics predicted to have an impact in 2020. Although Medicare and drug pricing took center stage, artificial intelligence, the future of the Affordable Care Act (ACA), and 2020 presidential campaign platforms were among the subjects discussed.
The panel included Avalere's Elizabeth Carpenter, head of Advisory Services; Fred Bentley, managing director of Health Plans and Providers; and Sarah Butler Donovan, head of Client Solutions, Marketing, and Operations.
2019 saw a significant increase in Medicare Advantage enrollees. “This year has seen a 17% increase in the number of plans available to Medicare beneficiaries looking to choose Medicare Advantage. Ninety two percent of beneficiaries have access to a zero premium Medicare Advantage plan. That’s up, year over year,” Carpenter said. She credits plans’ new offerings and supplemental benefits for attracting patients.
In 2020, the panelists predicted expanded benefits will continue to draw in new enrollees, especially as different types of companies enter into the healthcare industry. Donovan lists Uber and Lyft as examples. “Companies that you and I probably use all the time…are both actually starting to get active in this space and provide nonmedical transportation to beneficiaries to help them get to doctor’s appointments for example,” she said. “It’s a very simple way to improve access for patients that struggle to find transportation or maybe live in an area where it’s not easy to get from their home to the provider site.”
Social determinants of health, such as transportation availability, continue to play an important role in access to and affordability of care. Socioeconomic factors and, in particular, social isolation, “impact older Americans and folks on Medicare. There’s really compelling data out there and evidence that these have a detrimental impact on patients,” said Bentley. “2020 is going to be an interesting time frame because there’s going to be a lot of experimentation with different supplemental benefits.”
A window also exists for an increase in utilization of existing technologies. For example, the panelists stated 60% of Medicare Advantage plans cover telehealth services, but only about 1% of Medicare beneficiaries utilize telehealth. In comparison, about 25% of commercial beneficiaries use telehealth services. In addition, the coming year may bring more integration of hospice and end-of-life care into Medicare Advantage. The experts predicted outcomes-based contracts will continue to be utilized by health plans and manufacturers, due to their track records of improving patient outcomes and lowering costs.
As baby boomers reach higher utilization periods in the next couple of years, the panelists predicted a spike in Medicare spending. One challenge for the coming year is securing a more financially sustainable track for Medicare. To do so, the experts argued structural changes need to be implemented sooner rather than later
Despite waves of uncertainty often brought on by election years, Carpenter noted there has been recent bipartisan cooperation in several areas, including capping patient out-of-pocket costs. “Regardless of whether or not Congress does anything, I think it’s safe to say that particular issue is going to be on the agenda into the foreseeable future,” she said. The panelists speculated that prior to the end of the term, the Trump administration may issue an executive order on drug prices or implement widespread regulations on the industry.
When it comes to biopharmaceuticals, Donovan categorized the magnitude of developments and research as “almost unprecedented.” A shifting focus into curative, mainly gene and cell, treatments means an increase in value and price. “Our healthcare system is very used to handling drugs that are for management of a chronic disease. It’s only been more recently that we’re starting to introduce cures.”
Although these treatments present short-term challenges with up-front costs of as much as $2.5 million per drug, successful integration into the existing healthcare system could result in long-term, cost-effective benefits. Donovan pointed to previous costly innovations in niche areas of study that had widespread impacts, like declines in cancer rates. “This innovation is often followed by some really compelling results and improved healthcare outcomes,” she said. Due to health plans’ routine 12-month budget cycles, the initial cost may put off some companies who feel the investments will not yield economic benefits.
One possible solution is beneficiaries’ enrollment in multiyear insurance packages, with the tradeoff being access to rare, curative medications.
“This is an area that’s ripe for collaboration in 2020 and beyond. It’s getting those incentives right and …ensuring patient access and sustainability,” said Carpenter.
The need for scalable ideas to cover different types of cell and gene therapies is imperative, as “coming up with a new plan for each drug for each player is not sustainable,” said Donovan. Ultimately, “this pipeline is either going to force system change or going to be leaving patients behind and disincentivizing this level of innovation, which I think is not what we want to happen,” she added.
In the coming year, artificial intelligence and overall advances in technology are predicted to grow in relevance and scope. Technologies such as remote monitoring of home health care and integration of health center visit predictors have the capability to inform both clinical and policy decisions.
The experts predicted the use of data to identify patients who may benefit from healthcare intervention, based on medication adherence patterns and social determinants for example, will also grow in 2020. Technology use in home health care, in particular palliative and hospice care, holds the potential for increased care efficiency and patient benefits, Bentley explained.
The 2020 campaign season is in full force and democratic candidates have pushed for healthcare reforms on a wide-ranging spectrum. The panelists agreed that regardless of proposals put forth now, the American people are unlikely to see these plans go into law exactly as laid out. They argue time is better spent on changes and innovation more likely to advance outside of political action.
“Let’s look at the uninsured population. Let’s see who they are. Let’s see what it might take to get them coverage, and then let’s look at the existing affordability issues in the system and figure out how to, in a targeted way, reform those,” said Donovan.
One way of doing this is to implement modest, incremental coverage expansions. However, even with expanded coverage, the panelists noted the importance of benefit design. “Just because individuals will have insurance coverage, it doesn’t necessarily mean that access to some specialty pharmaceuticals is going to be within reach for all of those individuals.”
The panelists noted drug pricing may work as a potential financing vehicle for coverage expansions.
Imperative to future objectives laid out for the industry is a successful collaboration between state and federal policies. Regarding the ACA, Carpenter explained how states have taken the reins through stabilizing markets and implementing individual coverage mandates.
However, one way the current administration has worked around congressional deadlock is through the Innovation Center at CMS. Brad Smith, the newly appointed leader of the center, is expected to continue aggressive efforts to develop reforms around primary care and the Medicare fee-for-service program.
The panelists agreed that regardless of divisions in Congress, the Innovation Center will continue to be an independent driver of change in the industry.
Also discussed was the role the courts play in determining the future of American healthcare. Patients and providers continue to wait and see whether the Supreme Court will take up another case to determine the fate of the ACA. “In the meantime, what we know is that the ACA markets are as stable as they’ve been since the ACA was launched,” said Carpenter.
Decisions made this year may or may not hold weight in the future, and the panelists postulated major industry shifts potentially resulting from future decisions. “The courts can shape the healthcare industry the same way they executive branch can and the same way that Congress can,” said Bentley.
Meanwhile clients and patients operate under the status quo. The industry needs to continue moving forward and “can’t be paralyzed” waiting for the Supreme Court, the panelists concluded.