INDUSTRY PERSPECTIVES

Healthcare Trends: What's Ahead for 2019

JAN 3
2018 was an exciting year in healthcare shaped by strategic moves, vertical integration, continued focus on the consumer, and growth across all healthcare segments. As 2019 gets underway, we are watching the broader market, ongoing policy discussions, and a number of trends in healthcare that we believe will shape the industry for years to come.
 
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As in past years, the healthcare industry is continuing its long shift from a fee-for-service model of care to a value-based care (VBC) model, driven by the need to provide patients with affordable and effective care while addressing growing regulatory and reimbursement pressures. Providers have been increasingly accepting the momentum of value-based programs and are actively preparing to practice under new value-based models. As providers shift to VBC, many are still in the process of developing the infrastructure needed to succeed, while those that are currently operating under the principles of VBC are in the very early innings of the transformation.

To be successful in this shift, providers will need to transform how care is delivered by standardizing clinical and operational processes while engaging and activating patients in their care. Few organizations have been able to successfully navigate all of these keys to success, but that is changing. Among the most prevalent are physician aggregators, specialized risk models, and staff clinic models, all of which provide physicians differing levels of support and services, the ability to ascend into risk-based reimbursement models, and physician autonomy. As physicians attempt to optimize their financial and clinical performance, expect to see new models of care continue to expand in 2019.
 
Artificial Intelligence (AI) in Healthcare
As we have discussed in past blogs, the relationship between man and machine in healthcare is ever-changing and still in its early stages. We expect the AI movement to advance in 2019, along with associated technologies such as natural language processing (NLP) and machine learning, driving operational efficiencies and enhancing care by supporting physicians, suggesting clinical treatment and protocols, and reducing back-office administrative costs.

Most prominently in 2019, AI will be focused on delivering strong ROI when used to complete administrative tasks, improve processes and combat waste. As technology continues to improve, mundane manual data entry tasks performed by physicians and clinicians will be eliminated, allowing for more clinical time with the patient. Improvements in technology will not only reduce physician fatigue, a positive for healthcare organizations, but also create new HR challenges as organizations look to hire and train more skilled employees across the organization. As all healthcare constituents deal with a more complex landscape, requiring higher levels of care and more compliance oversight at lower costs, AI will continue to be adopted to meet these challenges.
 
Social Determinants of Health (SDOH)
It seems like one could not talk about healthcare in 2018 without mentioning SDOH. Across the healthcare community, there has been a realization of the outsized impact that SDOH have on the cost of healthcare. This is leading to an increased level of focus on where healthcare starts; namely, in patients’ homes, schools, workplaces, and communities. Leading physician groups, hospitals, payers, and other industry players are beginning to focus on upstream causes of poor health, providing care solutions that go beyond a patient’s physical health, addressing needs such as safe housing, sufficient food, transportation, social support, and more, a trend that will continue in the coming year.

Further advancement and recognition of SDOH in 2019 will continue to reduce healthcare spend and drive better care.  Health plans will continue to integrate SDOH into their plans by including nutritionists, social workers, psychologists, community health experts, and other services as care team constituents, aiming to reduce costs before they start. Technology companies will also play a role, creating care coordination solutions designed to address gaps in primary care and community services by sharing information across platforms as well as integrating data exchanges, workflows, and analytics aimed at identifying changes in patient conditions and high-risk individuals. Expect the implications of this trend to focus on active monitoring of SDOH across healthcare and a sustained approach to combatting the issues at their source.
 
Connected Care
Although connected care is not a new concept, the technology and services associated with it have advanced rapidly in recent years. New connected care solutions, such as FDA-approved digital therapeutics, and new advancements to traditional solutions, such as remote patient monitoring, will continue to be developed and expand in 2019 as both the private market and government become more comfortable with the technology. This will expand the arenas for care delivery and provide new methods by which care is delivered to patients.  Additionally, the new Centers for Medicare & Medicaid Services (CMS) funding initiatives in connected care will support the advancement of connected care technologies and adoption of connected care programs.

In the coming year, success in connected care will be centered around devices and services that can provide proven outcomes to their users and the providers and payers that serve them. The outcomes-based shift comes as companies look to utilize what connected care was historically best at, collecting data. Using data across devices to provide actionable insights will be key going forward. New, holistic solutions will use data points to deeply integrate providers and patients in a way that allows for better delivery of care. Through this shift, payers and providers will gain the ability to use collected data points and health outcomes to measure the impact of connected care across the healthcare continuum, making the implementation of connected care in value-based programs possible. Integrating connected care into value-based programs will increase adoption, allowing providers to view real-time therapeutic data, monitor large populations with chronic conditions, and boost patient engagement, all while serving the patient in a lower-cost setting. We are excited to see how payers and providers take advantage of new technologies to reduce healthcare spend and how patients use connected care solutions to take control of their own health.
 
Market Conditions
The year 2018 proved to be one of the hottest healthcare M&A markets in recent history with significant levels of deal volume and the closing of two significant mergers (e.g. CVS Health’s acquisition of Aetna and Cigna’s acquisition of Express Scripts). The year also ended with significant volatility as both equity and debt markets retreated from records set earlier in the year. Moving into 2019, we anticipate continued M&A momentum as new market entrants scale their healthcare strategies, and strategic and private equity buyers look to capitalize on transformational opportunities within the $3.5+ trillion healthcare ecosystem.

As always, we look forward to discussing new ideas and market changes with you throughout 2019.

Happy New Year!
 
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Andrew Kimble
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Connel McGough