Although the election of Donald Trump brings uncertainty to the healthcare industry, 2017 will also be a year of opportunity involving value-based care, emerging technologies, and strategic alliances and partnerships.
In its annual report of top health industry issues for the upcoming year, PwC Health Research Institute foresees that healthcare executives will continue their work on value-based care, prepare for emerging technologies and collaborate with former competitors through joint ventures, partnerships, strategic alliances and clinical affiliations.
“There are a lot of unknowns and change ahead of us, but there is also a tremendous amount of opportunities to build upon with work that was started in the past 10 years,” Rick Judy, management consulting leader, health industries, PwC, told FierceHealthcare in an exclusive interview prior to the release of the report.
Those opportunities, Judy said, primarily center on the concept of value, building upon the progress the industry has made so far in the transition away from fee-for-service to innovations and practices to meet the challenge of value-based care. Indeed, the report notes that “forces greater than politics” will carry on the transformation.
The continued shift to value-based care and payments
Although President-elect Donald Trump has vowed to repeal and replace certain provisions of the Affordable Care Act, Judy said the industry shouldn’t panic because changes will not take place overnight. “It will be slow to implement; there needs to be time for industry to comment, for policies to be adopted, and to give the private and public sector time to adjust,” he said. “The true impact on whatever direction the new administration goes in will take several years.”
While some also believe the movement toward value-based care may slow once the new White House administration takes office, the PwC analysis notes that Trump’s health policy talks about patient-centered care that promotes choice, quality and affordability, all “hallmarks of the pivot toward value-based care.” The report predicts that 2017 will be dominated by the shift toward value.
Indeed, the “training wheels” will come off of several value-based payment initiatives and providers will have to take on more risk. Specifically, the report points to 2017 as the first performance year for the physician payment reform law, Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Providers must participate in one of two payment tracks, both of which emphasize downside risk. The Centers for Medicare & Medicaid Services’ new oncology bundled payment will qualify for MACRA’s 5% bonus in 2017, and new bundled programs for cardiac and orthopedic care will also launch next year.
A year of invention and innovation
2017 is also the year healthcare execs must prepare for the impact of new technologies on business models, operations, workforce needs and cybersecurity risks. Those technologies that will disrupt the industry in the next decade include artificial intelligence, drones, Internet of Things, robots, virtual reality and 3D printing.
Judy said that although the healthcare industry has been slower to adopt these technologies compared to other industries, he has seen an increase in the number of organizations embracing these new innovations. However, the report recommends executives consider how these technologies work together rather than adopting them individually. They also should plan to hire new talent, including engineers and designers, and expect it may be difficult to lure top talent away from the tech world. Another investment that will be necessary: cybersecurity to meet regulator expectations and avoid costly breaches.
Hospitals and healthcare systems will also see an increase in invention to combat infectious disease and antimicrobial resistance. That may mean organizations will be able to use mobile technology such as smartphones to locate and diagnose patients and also collect data to share with public health officials.
An uptick in partnerships and collaboration
In addition to mergers and acquisitions, Judy said traditional players will come together to form nontraditional partnerships that will allow the organizations to quickly adapt to the changing healthcare environment. These strategic partnerships also reduce the potential downside risk of full ownership.
The report points to the success of Select Medical, a provider of inpatient rehabilitation, outpatient physical therapy, long-term acute care and occupational medicine that has partnered with hospitals to better manage post-acute care. In the past two years, the company has formed six strategic partnerships and joint ventures with organizations such as Ochsner Health System and the Cleveland Clinic to expand its footprint and capitalize on the momentum behind the industry’s transition from volume to value. The report notes that partnership strategies have allowed hospitals to grow their brands while preserving their not-for-profit identities.