A handful of key issues that emerged or gained speed in 2018 have the potential to transform healthcare delivery in the United States. Here's a look at four of them.
There was no shortage of big stories in healthcare in 2018, but it's still too soon to separate the truly innovative and transformative developments from the mere hyped-up stories that generate a few headlines and disappear.
With that in mind, here are four stories that likely will have a long-lasting impact on U.S. healthcare.
1. Vertical Integration
Arguably no single issue will have a more profound effect on the way care is delivered than the vertical integration that is occurring among commercial health insurers and pharmacy benefits managers and their retail subsidiaries.
Countless stories have been written about the $70 billion merger of Aetna Inc. and CVS Health, and the $71 merger of Express Scripts and Cigna Corp. The mergers have analysts swooning over things such as cost savings and improved cash flow.
But the biggest reason why this trend is so transformative is because it will force traditional healthcare providers to rethink their business models, and hustle in areas where they've preferred to be laggards because they haven't had any competition; in particular, with pricing transparency and consumer convenience.
2. Horizontal Mergers
Hospital folks like to say there are a number of reasons why these consolidations are occurring, including the creation of synergies and economies of scale, and the reduction of redundant services, all of which they say will result in lower costs for consumers, a claim that is widely disputed by a number of studies.
Of course, the real reason why hospitals merge is because the larger system can maximize an advantage of size to extract better deals from commercial payers, and because hospitals need a larger footprint as the nation transitions to risk-based compensation.
As long as that transition continues, there is nothing to indicate that this trend is going to slow down anytime in the coming year.
It's hard to gauge exactly how much Amazon changed healthcare delivery in 2018 but it sure generated a lot of talk. Perhaps, in looking back five years from now, we will see that Amazon used 2018 as a transition period on a number of key fronts.
In January, a loosely formed partnership between Amazon, JPMorgan Chase, and Berkshire Hathaway to form some sort of healthcare entity got a lot of media play, and it generated a lot of speculation. They named healthcare policy rock star Atul Gawande as CEO. But, that's about it.
Other Amazon initiatives that garnered less media attention have the potential to be more impactful.
For example, Amazon this fall began selling software that mines patient medical records for information physicians and hospitals could use to improve care and cut costs.
In June, signaling its intent to enter the pharmacy benefits space, Amazon acquired PillPack, a relatively small company with only 40,000 customers that ships pills directly to consumers and also makes daily individual packets.
Amazon's core competencies in logistics and distribution, and its existing B2B ecommerce platform, will allow it to easily expand into hospital and provider supply, disrupting the traditional group purchasing organization contract model.
Amazon is also attempting to integrate its Alexa voice assistant into the health and wellness space, targeting people with chronic diseases with initiatives as simple as reminding patients to take their daily medications.
While many believe that Amazon's ventures into healthcare have the potential to disrupt traditional markets, especially pharmacy, pharmacy benefits, and supply chain, the Byzantine nature of the nation's $3.3 trillion healthcare sector will also determine the pace of that disruption.
If nothing else, the Department of Health and Human Services under President Donald Trump has been predictably unpredictable in 2018.
On the one hand, the Centers for Medicare & Medicaid Services pushes doctrinaire conservative healthcare policy initiatives such as work requirements for Medicaid recipients.
On the other hand, HHS Secretary Alex Azar, a fervent free-market champion, sounded more like a Democratic Socialist this fall when he called for tethering Medicare Part B rates to the prices paid by other developed nations.
To its credit, CMS has also pushed for greater pricing transparency to help consumers understand irrational hospital prices.
In August, CMS unveiled a final rule to improve patient access to hospital price information.
In November, CMS launched an online tool that allows consumers to compare Medicare payments for surgical procedures in hospital outpatient departments and ambulatory surgical centers.
On other fronts, the Trump administration wasn't able to muster enough support in Congress to repeal the Affordable Care Act, so they're attempting to kneecap the legislation using HHS's broad regulatory authority. This includes the creation of cheaper, short-term health plans that are light on coverage, and which will be attractive to healthier people, leaving sicker populations in the more expensive, more comprehensive ACA plans.
John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.
The union of commercial plans, PBMs and their retail subsidiaries will force traditional providers to rethink their business models.
Amazon's ventures into the healthcare sector could profoundly change healthcare delivery on several fronts.
Hospital consolidations continue as health systems seek to maximize relationships with payers and a larger patient population in the transition to value-based care.