It’s that time of year again. At the start of every year, and particularly at the dawn of a new decade, the buzzing speculation of what is to come in the new year intensifies. In this Executive Brief, HealthScape has identified and distilled some of the most impactful market trends that will require health plans to make choices on how to prepare, participate and compete. While 2020 will see a continued focus on industry pressures—ranging from policy and regulatory shifts to rising pharmaceutical spend to the increased politicization of healthcare during an election year—we provide perspective on areas for plans to be proactive along the following five domains:
CONNECTING BEHAVIORAL AND PHYSICAL HEALTH
MOVING PAST THE BUZZ OF SOCIAL DETERMINANTS OF HEALTH
REDRAWING THE PAYER-PROVIDER LINES
EXPANDING INFLUENCE OF TECH GIANTS ON HEALTHCARE
FEELING THE IMPACT OF WELL-FUNDED NEW ENTRANTS
In our discussion, we highlight the implications of these areas and their elevated importance in 2020, particularly as many of these are not “net new” market forces but rather those that we think will have a material impact in 2020.
Our review of anticipated market shifts points to a singular theme—integration. Integration has historically been an under-appreciated term referenced primarily for linking disparate technologies; however, integration in 2020 emphasizes the trend towards greater connectedness. Whether that manifests into integration of behavioral health and health and human services (#1, #2), technology (#4), payers and providers (#3) or with external partners (#5), all five areas require health plans to think about greater integration across their internal operations and with external partners and solutions.
Fundamentally, the industry is deviating from the notion that a single entity will have the capabilities and scale to address the myriad of healthcare challenges. Rather, market success will be predicated on integrated solutions. We believe that health plans that adapt and integrate relevant solutions for this new paradigm will be best positioned to succeed.
The gap between the demand for behavioral health services and the availability of adequate treatment options has never been wider. While the importance of behavioral health has been long understood, we believe that plans are reaching an inflection point towards increased investment and action as many historical barriers to behavioral health services are going away.
2020 is expected to continue the exploding trend towards increased awareness, investments, and solution developments to better address behavioral and mental health. Given the demand for care and the downstream impact on cost, health plans today must prioritize integration of behavioral health services with traditional medical care. As the industry looks forward, “whole person care” that recognizes the duality of both a healthy mind and body will be critically important. These new models of care, beginning with primary care, will replace “carved-out” behavioral health programs, which have historically led to disjointed care delivery. As such, the new age of behavioral health treatment will evolve to models that are integrated with consumers’ physical health needs and focused on ease of access, supportive therapy, and personal choices.
In November 2019, Quartet Health partnered with Cambia Health to integrate primary and mental health care across Cambia’s health plans. Through Quartet’s artificial intelligence platforms, providers will be able to identify patients that need behavioral healthcare. In July 2019, Horizon Blue Cross Blue Shield of New Jersey and AbleTo announced the launch of a new virtual behavioral healthcare program for Medicaid members. The program is backed by AbleTo’s health data analytics technology which identifies members that would benefit from behavioral healthcare and connects them with a network of professionals.
A 2018 Kaiser Family Foundation report found that social factors and personal behaviors contribute to 60% of an individual’s longevity. While social determinants of health (SDoH) has gradually proliferated as an industry buzzword, only recently has the industry recognized and addressed these social barriers to begin making a meaningful impact on health status.
We see 2020 as the year the buzz becomes more actionable, as plans enter the uncharted territory of providing financial, housing, and educational support. Historically, healthcare organizations and social workers have focused on social barriers, but what is different now?
As the focus on SDoH reaches critical mass in 2020, it will become an imperative that health plans develop scalable and impactful solutions through targeted investments in community-based resources, integrated member management strategies and technology enablement tools.
UnitedHealthcare announced in April that it invested more than $400 million to increase affordable housing access in over 80 affordable housing communities nationwide. For members enrolled in these housing programs, emergency room admissions dropped by 60%, while the total cost of care was cut in half.
Seeking greater ability to influence quality, cost and the member experience, health plans have adopted varying strategies to accelerate integration with care delivery. While some health plans started (and continue to focus on) value-based contracts, more are expanding into plan-provider partnerships, joint ventures and even entering care delivery themselves. Several factors contribute to an increasing trend of direct or joint provider asset ownership:
As we look forward to 2020, we expect continued interest in more proactive and direct provider relationships, as the trend toward vertical integration forces plans to examine their approach or risk being shut out of potential provider partnerships in the market.
From value-based care to the value chain, the lines between health plans and health systems will continue to blur. Blue Cross and Blue Shield of Texas partnered with Sanitas to open 10 “one-stop medical centers” in Dallas and Houston, and with these centers, will deliver primary care, urgent care, lab testing and wellness programs to patients. Florida Blue has been expanding its Sanitas Medical Clinics since 2015; in 2020, 34 additional clinics are expected to open in Central and South Florida.
While new entrants and the start-up community have helped consumer tools and digital apps gain traction, advancements by tech giants, including Amazon, Google and Apple, will begin to move the existing disparate touchpoints and disorganized data into meaningful platforms for consumers and health plans. Health plans have long boasted digital improvements, but efforts have mostly resulted in interesting pilot solutions that have failed to achieve scale and meaningful impact. We expect this to change as each of the major technology players works to solidify its positioning in the health tech space; each hopes to impact healthcare consumerism, increase data access and provide informed analytics that, over the longterm, will drive lower cost and higher quality care.
Between 2013 – 2017, Alphabet filed 186 healthcare-related patents and countless collaborations. Notable ones include:
The continued evolution of reimbursement models, such as the Centers for Medicare and Medicaid Services’ (CMS) expanded definition of remote patient monitoring, will encourage technology companies to move into healthcare. We predict that 2020 will be the year that health technology companies pivot from being point solutions to marketplace enablers and disruptors. These actions will serve as the starting point for seamless omnichannel interactions as well as the platform to support robust, AI-enabled health solutions that leverage evidence-based medicine, genomic profiles and everyday lifestyle factors.
The pending “disruption” from new competitors in the health plan space has been well publicized and welcomed by industry observers. Traditional incumbent health plans have been labeled as stagnant and unwilling or unable to respond to consumer and employer needs for an affordable and uncomplicated healthcare marketplace.
Changes in government regulation and a market imperative to address these cost and navigation challenges have led to media splashes and never-before-seen valuations for companies entering or disrupting the health plan space. Although the impact of these ventures has been relatively muted to-date, two major categories of market disruptors are beginning to challenge the way healthcare is accessed and funded:
2020 is poised to be a potential inflection point where the words “potential” and “pilot” begin to transition to “competitor” or perhaps “partner,” causing health plans and providers around the country to determine their own best path forward under an advancing market norm.
Haven Healthcare will offer tens of thousands of Amazon, JPMorgan and Berkshire Hathaway employees zero deductible plans, administered by Cigna and Aetna, that also feature a wellness program with employee incentives.
Given the expected impact of these 2020 healthcare trends, we’ve identified several strategic areas of focus for health plans that apply across the market shifts described above. Organizations should consider their readiness and capabilities in these areas to ensure that they are prepared to respond to continued market shifts.
Each of the above-mentioned topics will accelerate the volume and variety of data that health plans must digest (e.g., clinical data, social risk factor data, real-time data from wearables and Internet of Things [IoT]). A plan’s ability to use the increasing volume of data from these technology platforms will be predicated on having a well-defined data strategy that includes people, process and technology components that allow health plans to unlock the business value of data and prepare for the next wave of data elements.
The emergence of healthcare technology companies and other disruptors will require health plans to evaluate and define their response to these potential market threats. Health plans must assess their definitions of “friend” or “foe.” In some cases, it may be better to align with these new entrants as partners. Given that many others are facing this same dilemma, it will become increasingly critical to quickly define unique value propositions in the market. For many smaller plans, it will be impossible to compete on a scale and capital basis against these well-funded entrants, which will require plans to consider outsourcing arrangements or partnership with other like plans.
If you can’t beat them, join them. Blue Cross Blue Shield of Massachusetts announced a new feature in its MyBlue member app and website that enables members to manage and fill their prescriptions with PillPack by Amazon Pharmacy. As the first health plan offering direct pharmacy integration with PillPack, Blue Cross Blue Shield of Massachusetts will leverage PillPack’s core services to provide its members a more convenient way to manage their prescriptions and medications.
Healthcare organizations will need to break down historical siloes to be successful. This will require engaging consumers based on their needs rather than traditional health plan operational ease. Examples of this evolving consumer experience include improved connection points between the health plan, providers and technology to wholly integrate behavioral health delivery with physical health.
Given this constantly evolving market landscape and ongoing market threats, health plans must evaluate the feasibility of growth from existing lines of business (e.g., group, Individual, government programs) to determine whether they should enter into new health plan segments or whether additional diversification is required. If diversification is needed, health plans must have a clear understanding and strategic rationale for which types of diversified businesses represent the greatest growth potential, including a business case/plan and roadmap for investment.