Government Healthcare Insights

New Year and New Administration: Themes That Will Shape Discussions at the JP Morgan Healthcare Conference

January 4, 2017

Like most in the healthcare industry, we have been trying to get a sense for where the regulatory landscape is heading under a new Republican administration.  While the early sentiment was that the Affordable Care Act would be politically difficult to fully repeal, some of the cabinet and other administrative nominations suggest that change is imminent.

Regardless of the policy changes that ultimately take hold, TripleTree is entering the year focused on a few key themes that have significant staying power, all of which are likely to be priority areas for stakeholders across the healthcare continuum in 2017.

Continued Momentum Towards “Value”

While the government has played a significant role in putting “Value-Based Care” into motion, the healthcare landscape appears destined to continue a shift towards value-based decision making and reimbursement regardless of the fate of the ACA. We believe that incentive alignment between commercial payers and providers, providers going at risk for the quality and results of their care (e.g., “MACRA,” “MIPS,” “CPC+”, etc.), and voluntary bundled payment programs will continue to accelerate into 2017.

Payers and providers alike are eagerly seeking partners that facilitate superior value-based care performance and administration, and vendors in this space will see strong momentum as the value-based movement continues. We are particularly eager to see how stakeholders innovate and outsource certain portions of their new care models to reduce unnecessary utilization inside and outside the health system while improving outcomes and quality for patients. Further, it’s not lost on us that imminent changes in revenue cycle will be required to effectively bill, collect and administer value-based payments.

Focus on Post-Acute Care

The continued shift towards value-based care brings forward the importance of managing and navigating the post-acute care environment, as many of these initiatives are designed to align providers and care teams outside the hospital walls. The biggest opportunities are in techniques to efficiently and effectively guide members and patients through a convoluted network of disparate care settings (e.g., SNF, skilled home health, home care, home and community-based services, etc.). Avoidable readmissions and setbacks in care are burdening the healthcare system with billions of dollars in wasteful spend. Proactively avoiding these costly events through better management of a patient’s post-acute journey will be a focus of all stakeholders on the hook for a patient’s clinical outcomes.

TripleTree expects to see a significant transition away from what would have historically been acute-care events into lower-cost settings, and when possible directly into the patient’s home, the desired point of care for both payers and patients. We believe that the healthcare industry will increasingly adopt technology and service models that allow for high-quality, distributed care. Additionally, companies that are built to manage a superior post-acute provider network will see significant interest from payers and best-in-class post-acute care providers alike.

Higher Financial Burden on Consumers

TripleTree believes that patients will continue to see out-of-pocket expenses rise as the costs of paying for healthcare continue to shift. There is very little budget left in government or employer accounts to fund any additional growth in healthcare costs. Even insured consumers will feel the pinch by paying more in the form of co-insurance and deductibles.  Changes to Medicaid (such as block grants) may increase the number of uninsured again, creating incentives for providers to enhance collections from fully insured patients.

As a result, businesses that help consumers navigate the healthcare environment by planning, securing, and seeking effective treatment will gain additional momentum, and solutions that help to explain and negotiate bills will become increasingly important. We will be watching for innovations around HSAs and similar saving and funding mechanisms, as these will likely gain mindshare as consumer-centric approaches. At the same time, we expect investment and innovation in search for technologies and services that help providers effectively capture and collect on the rising portion of patient-pay for their services, which has historically been a significant pain point.

Unlocking the Value of EHRs

Now that the government subsidies supporting the wide deployment of EHRs have dried up, providers are beginning to look for a return on the billions of dollars they have invested. Recent legislation (e.g., MACRA, 21st Century Cures Act) also indicates that regulatory bodies have identified that the rapid adoption of enterprise EHRs stemming from HITECH and Meaningful Use created several flaws and challenges relative to interoperability, physician workflows, and the usability of data. Changes foreshadowed by these acts, such as aiming to significantly increase interoperability and limit data blocking across systems, should hopefully accelerate data sharing amongst the most engrained EHR systems, benefiting specialty focused EHRs and other vendors looking to use previously entrenched data to create value for payers and providers. In 2017, we expect to see growth in companies that can leverage the data captured within system-wide EHRs and turn the “big data analytics” buzzword into a return on investment reality.

As the concept of population health management transitions from a cliché to a necessity under value-based payment models, we see vast opportunities in and around predictive analytics that can further the push towards more personalized, highly appropriate care. Unlike first generation “big data,” where providers focus on ratios and trend lines describing entire population subsets, predictive algorithmic platforms can instead synthesize individual patient data and create personalized, actionable care plans, which can lead to meaningfully improved care outcomes and even lower costs.

Needless to say, we look forward to discussing and engaging with you regarding these important and disruptive themes throughout 2017.

Happy New Year!