Despite Republican lawmakers' continued attempts to derail healthcare reform and the uncertainty over the Supreme Court's upcoming ruling in the King v. Burwell case, the Affordable Care Act (ACA) has had a profound impact on the healthcare industry in the last five years and will continue to do, according to a new report by PwC.
The report identifies five industry trends to watch in the wake of the ACA's anniversary, regardless of what happens to the law itself.
"These trends are much bigger and more powerful then what's contained in the act itself because the industry is shifting, and entrepreneurs and investors have seen opportunities in the $2.9 trillion health sector, and they have taken the ACA as a jumping-off point," Ceci Connolly, managing director of PwC's Health Research Institute, said during an exclusive interview with FierceHealthcare today.
"The ACA gave it the nudges and incentive in the direction, but now it's really the free market that is running with it," she said.
To illustrate her point, Connolly used the example of the trickle-down effect that resulted from the penalties hospitals receive for excessive readmissions under the ACA's Hospital Readmission Reduction Program. "Yes, the law and regulation did have an effect in the industry, but it doesn't stop there. It's led to hospitals and healthcare systems thinking more on discharging patients and follow-up care and staying connected to those patients after they leave the hospital. The ACA was the trigger, and now we see creative people in healthcare and other industries are taking it further," she said.
The report identifies five trends fueled by the ACA that have ignited industry-wide transformation:
The shift to value-based care. The risk shift will raise the stakes for all healthcare players, the report notes. The ACA added force to new payment models, including the just-announced Next Generation accountable care organization model, that reward outcomes and penalize poor performance such as high admission rates and hospital-acquired conditions.
A renewed focus on primary care. The ACA recognized the importance of physician extenders, who provide routine care while steering sicker patients to specialists. As the number of newly insured patients continues to rise, the industry will rely more on nurse practitioners and physician assistants to meet the growing demand for primary care, the report notes.
But Connolly said that this renewed focus also forces hospitals and healthcare system executivess to think about preventive care and reaching patients earlier in the process as part of population health management. "It's no longer enough to wait until patients show up in the ER. They must make more of an effort early on in the primary care system to help patients with multiple, chronic conditions care for themselves," she said.
A new emphasis on innovation. More than 90 new companies were created since the law took effect in 2010, according to the analysis. These new entrants rushed into the market to meet the demand for lower-cost, consumer-oriented care options in the post ACA-era. It also provides an opportunity for hospitals and healthcare systems to seek out partnerships and alliances to improve care, Connolly said.
"Are there any retailers that may make good partners or large pharmacies or new technology to look at? So many companies have formed in last few years that can help traditional health companies fill in the gaps and get closer to the consumer, and get to the bedside faster," she said.
A move from wholesale health insurance to retail insurance. Rapid enrollment in the public exchanges shows the potential for retail-style health insurance and creates renewed interest in private exchanges, the report notes.
A new focus on the state's role in healthcare reform. States are key players in the reconfigured healthcare landscape because the ACA gave states notable discretion in how they could implement the law. "States have such a big role to play in terms of implementation not just of Medicaid, but also in telehealth and policies about physician extenders. We expect a lot of action on the state level, and healthcare executives will want to be close to this activity," Connolly said.
- read the report (.pdf)