I keep searching for a crystal ball that provides a clear vision into the cloudy future of the healthcare industry; but no luck so far. However, here are a few things to consider:
- CVS Health to Buy Aetna? Well, that acquisition is now in the hands of regulators who will determine if such a merger clears the antitrust hurdle. Assuming the acquisition clears the regulatory hurdle, the deal is scheduled to close in 2018. It still remains unclear how the joining of these two companies might redefine healthcare delivery; but remember that not long ago, written pieces like this were published in printed trade journals or newspapers, not published in an electronic format. Change happens! I recently read that Minute Clinics (CVS operates 1,100 walk-in clinics housed in some of their retail pharmacy locations) could look more like emergency rooms in the future. I also read that Minute Clinics could reduce the need for traditional doctors’ offices. The combination of Aetna and CVS seems to bring us a big opportunity for systemic change in the healthcare industry; and that change could begin to take shape in 2018. This merger could also stimulate others. It has been rumored that Amazon wants to get into the pharmacy business. What would it look like if Amazon acquired Walgreens? I could imagine a turn-key national infrastructure of Amazon stores (formerly Walgreens stores) that would provide an efficient package-pick-up service, not only for prescription drugs, but also for anything else that someone might order from Amazon that the customer might not want sitting outside until they get home to retrieve their package. Look for more CVS-Aetna-type merger/acquisition activity in 2018.
- Affordable Care Act? We began 2017 with a bold promise from President Trump: “repeal and replace.” Although much energy was exerted, there weren’t enough votes in the Senate to fulfill the promise; so the ACA remains the law of the land. As Congress works to deliver major tax reform legislation by the end of 2017, any significant change in the tax law is likely to include the termination of the Individual Mandate – an ACA provision that requires all taxpayers to maintain healthcare coverage. The disappearance of the individual mandate could bring with it catastrophic consequences for the Marketplace (the place where individuals can go to buy individual health insurance, often with premium subsidies provided by the federal government). There’s been a steady deterioration in the availability of health insurance carriers and products in the Marketplace. There’s also been pricing pressure; premium increases have been significant as the Marketplace continues to be a losing proposition for participating health insurance carriers who consistently pay out more in Marketplace claims than premium would suggest might be reasonable. If the individual mandate disappears, so will many of the good-risk Marketplace participants who pay premium, yet cost the insurance companies very little in the way of claims. Their disappearance would make a bad situation worse and remaining Marketplace members would likely face fewer and dramatically more expensive options.
- Prescription Drugs – We’re likely to continue the struggle to contain prescription drug costs in 2018. When certain drugs cost $30,000 per treatment, this becomes a big issue. Plan sponsors will have to face the harsh reality of paying for very expensive prescriptions in a way that makes those prescriptions affordable to members who NEED them; but plan sponsors will also need to put in safeguards to protect the plan from the costs associated with members filling very expensive prescriptions in place of more affordable alternatives that would satisfy their medical needs.
- Transparency - Although gaining minor momentum, the tools available to members to learn more about what their medical care costs BEFORE the care is delivered remain UNDERUTILIZED. Wide disparities remain in the cost of care between Place A and Place B and members possess the enormous power to control costs by directing their care to high quality / low-cost providers. Healthcare consumers MUST start using these tools.
- Telemedicine – the concept of a “virtual office visit” seems less daunting today than it has in years past. As members become more comfortable with the concept in 2018 and the positive feedback from those who have used telemedicine permeates the workplace, utilization will continue to climb.
CPI-HR is passionate about staying in front of any industry trends and giving our valued clients an opportunity to be early adopters if such a decision matches their culture and long-term objectives. For information about how you can be best-positioned for 2018 and beyond, please contact your CPI-HR benefits consultant, or call 440-542-7800.