Top Ten Trends in Healthcare: A Summer 2018 Look

Every year seems like a tumultuous year for healthcare, as regulatory, IT, labor demands, and national events shape the nation’s largest industry. While there are many new and emerging trends to pay close attention to, these ten may be some of the most pressing in Q3 and Q4 of 2018.

1) Healthcare reform isn’t over, it’s just more complicated
While the chance to repeal and replace the Affordable Care Act (ACA) through a single piece of legislation may be dead, the Republican party will likely continue to pursue health reform in 2018 through a more fragmented approach. The White House, administration officials and Republican lawmakers have used executive orders, rule-making, CMS waivers, federal appropriations, tax reform and the courts to roll back or transform parts of the 2010 law. 2018-2019 will likely bring continued efforts to reduce and cap federal Medicaid spending, expand access to lower-premium health insurance, loosen ACA consumer protections, soften the employer and individual mandates and repeal ACA taxes and fees. Obviously the Fall 2018 national primaries will dictate future directions of healthcare policy for 2019 and onward.

2) Patient experience as a priority, and not just a patient portal
Todays consumer is used to sophisticated shopping experiences, in which retailers harness consumer information to tailor targeted interactions with customers. As the healthcare industry turns toward paying more for value instead of volume, health companies will need to take this same approach and make strategic investments to improve patient experience.

As healthcare leaders work to focus on patient engagement in 2018-2019, more providers will establish patient portals, supply wearable devices, and launch educational programs with materials tailored to patients’ needs. These types of initiatives help increase patient engagement and capture consumer information, encouraging cross-promotion of related products and services.

3) Losing Nurses
Nurses are leaving their jobs, and it is hard to recruit and replace them! A recent AMN Healthcare survey concluded that 54% of nurses over age 50 are thinking about retirement now that the economy has improved. Besides just Baby Boom nurses retiring, it will be hard for health organizations to retain young nurses as well.

The turnover rate for new nurses is in the 25%-60% range during their first year of practice. New nurses are confronted with high acuity patients requiring care they are not yet confident enough to provide, which leads to frustration. Young nurses also often leave their employment because of quality of life concerns. Hospitals face a strong need to address Millennial concerns about having too much overtime or not enough voice, situations that cause nurses to leave healthcare early in their career. Health systems are trying to relate to new nurses by addressing these Gen Y issues and helping young nurses drive their own performance.

Preparing young nurses for future leadership roles is critical for hospital leadership succession planning. Healthcare organizations are investing more in young nurses at the beginning of their leadership path, in the Charge RN role. NCharge®: “Nurses Learning to Lead” for example offers courses like Charge Nurse Fundamentals which helps employ strategies for making a smooth transition from staff nurse to Charge Nurse, applies qualities for successful nurse leadership, and addresses conflict and communication issues.

4) The healthcare industry tackles the opioid crisis
Opioid overdoses are now the leading cause of death for US adults younger than 50. This is a phenomenon too big to solve by only one player – there is a role for everyone across the healthcare landscape, from prescribers, to payers, to the pharmaceutical industry, in order to reverse this trend. The goal will be to collaborate between industries to prevent opioid misuse, improve treatments for chronic pain, and support patients struggling to recover from opioid addiction. States with the highest numbers of overdose deaths will be working with first responders and law enforcement to expand access to drugs such as naloxone, which can reverse an opioid overdose if administered quickly.

5) Health systems, NOT hospital systems
Value-based care now accounts for about 30% of health revenue, taking some focus from Fee-For-Service to value models. This drives some care delivery outside of traditional hospitals. More care is delivered in outpatient settings now, and population health management is causing healthcare executives to rethink their financial presentations and definition of market share. Hospitals used to count profit based on number of beds filled, but this is changing. Organizations like Kaiser Permanente and Mercy (Missouri) describe themselves as a large clinic that operates hospitals, instead of the other way around.

6) More financial belt tightening
Hospitals nationwide are cutting jobs amid financial pressures and fears about the future. There were 145 hospital mass layoffs in 2017, and 22 healthcare organizations filed for bankruptcy. Many systems are considering cuts to clinical services, including labor and delivery, substance abuse counseling, and psychiatric care. The easy layoffs have already been made, so there will be tough decisions made in the next couple years as systems layoff staff to compete.

Why is there financial belt tightening? One reason is the percentage of American workers with HDHPs is rising sharply. A typical insured family used to consider a $500 aggregate deductible the norm, now it isn’t shocking to see $7,000 deductibles for families of four. This has led to health providers looking at many patients with HDHPs as reimbursing at rates closer to the self-pay/uninsured populations than they do to traditional insured populations. Also the designs of CMS pay-for-performance and alternative payment models have caused hospital margins to remain in the low single digits. The Medicare Payment Advisory Commission projects the Medicare margin will fall to negative 11 percent in 2018.

7) Mega deals – Retail, meet health!
Walmart is eyeing a deal with Humana, a potentially attractive asset for Walmart to diversify its revenue stream. Walmart may want to reinforce this partnership now, partly in response to retail pharmacy giant CVS Health’s $69 billion deal to acquire insurer Aetna , and Cigna’s $54 billion proposed merger with PBM Express Scripts. Additionally, there is a threat of Amazon’s potential entry into the pharmacy business. Walmart may be seeking to counter Amazon’s influence, as well as trying to blunt the impact of a number of other healthcare mega-deals taking  shape. Healthcare is a $2.7 trillion piece of the U.S. economy. The organization that captures and analyzes U.S. health data most efficiently, especially health information of senior citizens, will lead the industry of the future.

Keep an eye on Amazon’s, Berkshire’s, and JP Morgan’s healthcare venture, and their June 20th, 2018 CEO hire, Dr. Atul Gawande. This ventures goal is to deliver better healthcare, with less risk and better costs. Dr. Gawande starts on July 9th.

8) National (and some local) efforts to lower Rx drug costs
The FDA will continue to launch new initiatives to increase drug-maker competition and moderate drug price trends. President Trump’s plan, dubbed “American Patients First” seeks to increase competition, improve negotiation and create incentives to lower list prices of prescription drugs and out-of-pocket costs for consumers. The proposal involves pressuring other countries to raise prices to address the disparity with U.S. drug prices. It also includes more regulations on drug ads to create transparency, and fix the current drug rebate system to keep PBMs from pocketing part of the existing rebates already offered by pharma companies.

One state is even taking action to lower Rx drug costs directly. On May 16, 2018 Vermont Governor Phil Scott signed a bill to permit the importation of cheaper prescription drugs from Canada, the first state to legalize such an action to combat high drug costs. Vermont still has more obstacles before its wholesale importation program can actually happen, but is something to watch for in 2018-2019. Many other states are considering legislation that would shine a light on drug cost changes or bring more transparency on pricing.

9) Possible lightening of regulations
As payment models are slowly changing from Fee-For-Service to Value-Based Care, the CMS is moving to outcomes-based measures. Seema Verma, the new CMS Administrator, is acknowledging the need to ease regulatory burden. It is estimated that regulatory compliance costs about $1,200 per every patient that walks into a hospital, and the average community hospital needs 59 FTEs ust to meet regulatory requirements. A catalyst for addressing these issues comes from the AHA’s October 2017 report “Regulatory Overload – Assessing the Regulatory Burden on Health Systems, Hospitals, and Post-acute Care Provers.”

10) Large scale catastrophic situational planning – preparing for the “un-preparable”
2017 hurricanes that battered Puerto Rico, Florida and Texas, the wildfires that ravaged the western U.S., and mass casualty situations can wreak havoc on health systems. 2017 was the costliest year on record for disasters in the U.S. The Sunrise Medical Center in Las Vegas raised the bar when it comes to how to handle unthinkable situations, performing 83 surgeries in 24 hours after the Las Vegas shooting disaster in 2017. But other health systems are wondering if they could have had that much success if faced with such a catastrophe.

To prepare for “un-preparable” events, healthcare companies are performing multiple casualty drills, getting ready for mass staffing situations, planning to leverage community resources when crises hit, and preparing for triage process changes. Planning for clear lines of communication and altered catastrophic care standards can also mitigate legal and reputational damage that can occur, post event.

“Top health industry issues of 2018: A year for resilience amid uncertainty,” PwC Health Research Institute Annual Report
“12 Defining Healthcare Trends to Watch in 2018,” Jasmine Pennic, HIT Consultant
“Ten Trends Redefining Healthcare,” HealthStream May 2018 webinar
“Why Walmart may have designs on Humana, and what it thinks it could get from a deal,” CNBC, April 2018, Bertha Coombs
“6 healthcare trends for leaders to follow in 2018,” Beckers Hospital Review, Megan Knowles
“Vermont first state to legalize drug importation from Canada,” Beckers May 17, 2018, Mackenzie Bean
“Michael Dowling: 4 most important healthcare trends,” Beckers, Michael Dowling (President/CEO of Northwell Health)