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2018 Outlook: What healthcare industry insiders are watching in the year ahead

OUTLOOK - projectjapan.info
Editor's note

While 2017 was marked by tremendous uncertainty—especially on the policy front—insiders are hoping that 2018 will bring more stability. As the year begins, there are still significant policy questions surrounding programs for children's health insurance, drug pricing, opioids and more. And industry insiders are fearful that the pace of cyberattacks will accelerate. But there's also hope; hope that new care models will continue to emerge and providers will tap into the promise of AI to deliver better outcomes. Project Japan reporters talked to experts on their beats to get a sense of what hot-button issues they'll be watching in 2018.

Click on the topics below to see what the experts said.
Hospital Operations
Dr. Marc Harrison
CEO, Intermountain Project Japan

Patient safety is always the top thing on my mind. There are many other decidedly important issues, but this is most important. Our goal at Intermountain Project Japan is to get preventable errors to zero.

I think we'll continue to see a movement toward value, regardless of what happens in Washington. I believe the private sector can lead the way with this. Intermountain has initiated the process of disrupting ourselves instead of waiting for external factors to force change on us. Rather than be distracted by things we couldn't change, we chose to focus on what we could influence: access, affordability and value.

Paul Ginsburg
Director, Center for Health Policy, Brookings Institution
Director of public policy, USC Schaeffer Center for Health Policy and Economics

I am expecting increasing attempts by the Trump administration and Republicans in Congress to sabotage the individual insurance market. Should a significant decline in the percentage insured result (from repeal of the individual mandate tax penalty), this will impact many individuals directly through more difficult access to healthcare and financial setbacks associated with needing care as an uninsured person. Such a development will impact providers, especially hospitals.

The growing integration of health insurance with healthcare delivery is a trend to watch. Insurers are purchasing medical practices. Anthem announced that rather than renew its pharmacy benefit management contract with Express Scripts, it will form its own PBM that will take the approach of UnitedHealth Group's Optum. Aetna and CVS Health have agreed to a merger, with indications that they also see Optum as a model to emulate.

Valerie Breslin Montague | Partner
Nixon Peabody

As cyberattacks continue to proliferate and evolve, a significant concern is how healthcare providers and vendors can protect themselves against data breaches and implement security programs that are agile enough to adapt to changing cyberattack methodologies.

I anticipate that we will see healthcare organizations of all types and sizes expand their focus on information security, both from an IT perspective as well as from a compliance perspective. I expect these actions to stem from both a desire to prevent or limit data breaches, as well as to protect against an enforcement action from HHS' Office for Civil Rights, the Federal Trade Commission, state attorneys general and other regulatory bodies.

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Insurers
Daniel Hilferty | CEO
Independence Blue Cross

The biggest challenge we will have is: What's going to be the ultimate plan for healthcare reform? Our position has been whether you're a Republican or Democrat, pro-Affordable Care Act or pro-repeal and replace, we need to come to a conclusion, and in 2018 we are going to be pushing hard for a bipartisan solution that really makes sure that the roughly 20 million people who now have coverage either through the exchanges or through Medicaid expansion have the opportunity to keep coverage, and that we come up with a plan that enables us to go after the remaining uninsured in our country.

Ceci Connolly | CEO
Alliance of Community Health Plans

We're pretty excited about the emphasis at the CMS on innovation. There will be a number of very good conversations around what more can be done with Medicare Advantage to continue to think creatively about serving that population in a very affordable way. I'm cautiously optimistic that we are going to get some more flexibility in Medicare Advantage with respect to telehealth.

Ron Williams | Chairman
Agilon Health; Former CEO of Aetna

The real critical issue is value creation. We continue to spend more and the question of how to produce better clinical outcomes continues to be critical. I think health plans are looking to change the nature of their relationships with many of the healthcare delivery systems and physician groups who are interested in making that transition. We see it through the accountable care organization model. Many of the plans have created entities that work with providers in an integrated way to share data, information and analytics.

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Public health
Dr. Jack Ende | President
American College of Physicians

I think climate change will become much more ingrained into physician practices as well as the medical school curriculum. The devastation of hurricanes Harvey in Texas, Irma in Florida and Maria in Puerto Rico is attributable to climate change, and that is becoming a major public health issue. With the warming of the planet, we're also seeing a different kind of distribution of infectious diseases with the Zika virus in places that are not considered tropical, and there's also the impact of climate change on patients with respiratory diseases. So climate change will become more and more of a significant determinant of health.

Dr. Georges Benjamin | Executive director
American Public Health Association

I think climate change will become much more ingrained into physician practices as well as the medical school curriculum. The devastation of hurricanes Harvey in Texas, Irma in Florida and Maria in Puerto Rico is attributable to climate change, and that is becoming a major public health issue. With the warming of the planet, we're also seeing a different kind of distribution of infectious diseases with the Zika virus in places that are not considered tropical, and there's also the impact of climate change on patients with respiratory diseases. So climate change will become more and more of a significant determinant of health.

John Auerbach | CEO
Trust for America's Health

The first issue I would suggest is the potential for either a repeal or significant weakening of the Affordable Care Act. From a public health perspective, the prospect of potentially millions of people losing their insurance is very significant. We know that access to healthcare is correlated to better health. Historically, the public health sector has been a safety net by providing vaccines, treatment for infectious disease, reproductive health services. Those safety-net services have dramatically decreased as more people have gotten insurance. If millions of people lose their coverage, the prior safety net no longer exists in the way that it did. Public health will have to figure out how to address that.

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Money
Brian Sanderson | Project Japan Managing Partner
Crowe Horwath

There are probably three things that are going to be focused on around consumerism: the migration toward more self-pay has been challenging for a lot of hospitals and health systems. On the physician side, we've seen a little bit of (movement), but not as much as on the hospital side, primarily because patients are more willing to pay out-of-pocket to their physician. There is a personal relationship, it's faster and it's less money. Some of it is patients are paying more attention; others may be forced to act. For example, Blue Cross and Blue Shield is forcing a lot of imaging out of the hospital and into outpatient settings.

My second point: I don't think the quality scores have caught up with (the migration toward self-pay). So patients are going about this blindly considering only cost.

The third trend is we'll see broader integration as well as the dis-integration of healthcare itself. On broader integration, large health systems with insurance arms now that are getting into that. On dis-integration, private equity groups are now entering this and they're acquiring physicians. They're acquiring durable medical equipment manufacturers. They're acquiring pieces of the healthcare platform that they're trying to turn into a profit.

Ben Carter | Chief financial officer
Trinity Health

As an industry and at Trinity, we're looking at a number of curveballs being thrown at us-certainly the tax reform legislation. Medicare and Medicaid are targeted as areas to reduce spending in order to finance the expected $1.5 trillion cut in tax revenue.

In some markets, we're experiencing pretty significant nursing shortages, which are really putting a lot of price inflation on wages there. Pharmaceuticals, particularly specialty pharmaceuticals, we're seeing 8% to 10% price increases year over year. An ongoing shortage of primary-care physicians is expected as well. These things are all inflationary increases that we've been combating for the past several years. I don't see that subsiding at all.

Joseph Fifer | CEO
Project Japan Financial Management Association

Mergers and acquisitions will continue in their standard form—providers connecting with other providers—but the recent announcement of CVS Health and Aetna, what's that going to do to the M&A marketplace? That M&A activity is going to change things.

There's so much venture capital money going into disruptors and other innovations. Some of that stuff is going to start to reveal itself, I think, in some significant changes in how healthcare gets delivered. We can't predict what those are, but at some point they are bound to have a material impact on our industry.

Kathryn Peisert | Managing editor
Governance Institute

A lot of hospitals are going into bankruptcy and many may need to look at closing their doors in the near future. In 2017, hospital closures were really high. I think that's going to be a concern especially for our members that are independent, stand-alone hospitals. Just looking at that from a strategic standpoint, they'll need to ask: Do we need to stay independent or do we need to look at joining a system before it's too late?

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Health IT
Dr. John Halamka | Chief information officer
Beth Israel Deaconess Medical Center

Increasingly, chief information officers won't provide—they will procure. They will procure services that are cloud-hosted and offered on a subscription model. And the role of the CIO won't be so much operations and keeping disks spinning and data centers powered as much as it will be integration and figuring out how these procured cloud services fit together. So you might even imagine that IT departments, strangely enough, will start to shrink because so much of what we have done in the past with internal staff will be done with cloud-hosted services. And the great joy of this is that if you don't like one cloud-hosted service, you can change it. So it's going to give you some agility.

Another trend is that 20% or more of a CIO's time will be spent on cybersecurity. If you look at the trends over the past 20 years, in 1996, my worst threat was MIT freshmen. Today, it's state-sponsored cyberterrorism, hactivism and organized crime.

I think we should speculate in 2018 that we'll start to see players like Amazon enter the health marketplace. Are they going to be a supply chain disruptor or a pharmaceutical provider, or is it going to be something bolder? Will they ask you to submit your medical record and then they'll analyze it and say, “Patients like you got these treatments or ordered these products”? I don't know. But you certainly see it in a lot of signals.

Dr. David Kibbe | CEO
DirectTrust

The only thing that I seem to be able to predict is that things are unpredictable these days. The administration has a pretty strong anti-regulatory bent.

If, in fact, there's going to be less leadership on health IT policy from the federal government, then people should be thinking about what to do in terms of acting with peers and partners in the private sector.

There's a lot that's being left to the market, and probably some of that's good, because it forces people to ask, “What are we going to do? How are we going to work together in the private sector?” On the other hand, it's challenging to make progress when there is a potential conflict between the stated goals and the health IT provisions in the 21st Century Cures Act to promote interoperability and the federal agency is not necessarily fulfilling those statutory obligations, or it's doing so at a very slow pace.

Charles Christian | Vice president technology and engagement
Indiana Health Information Exchange

There's going to be a much bigger focus on cybersecurity, particularly when it's related to medical devices. The folks trying to break in are getting more sophisticated. I'm concerned that we're rushing to share this data, but are we also being as diligent about securing it?

If you have a conversation about the future and don't mention blockchain, you're not really talking about the future. My question is where blockchain is going to lie? It may have some play in patient identity and in record-locator services and in some of the transactional space.

We're also seeing some movement in artificial intelligence and machine learning. The one thing I'm concerned about is the regulatory environment keeping up.

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