PricewaterhouseCoopers' (PwC) Health Research Institute expects “persistent risks and uncertainties” to impact healthcare in 2018, ranging from policy changes under the Trump administration to how artificial intelligence (AI) will change workflows, according to PwC’s annual industry issues report.
Several of PwC’s 2017 predictions were on point, as the potential repeal of the Affordable Care Act (ACA) dominated discussions throughout industry, while rising pharmaceutical prices and increasing consolidation remained major concerns. In 2018, the 12 included issues are broadly organized into three categories: opportunities for cross-sector collaboration, strategic investments and creating efficiencies.
“In the face of an unsettled environment, the health industry could come out the other side of 2018 stronger and more creative, helping solve some of the nation’s most pressing health issues and becoming more engaged with their patients and consumers than before,” the report said.
Those challenges and opportunities identified in the report include:
1. AI moving into back office and supply chain roles
Artificial intelligence (AI) seemed to be the “it” topic at healthcare conferences in 2017 (just look at what was discussed at HIMSS and RSNA), with much of the focus surrounding how this technology may replace work currently performed by physicians.
Those are long-term concerns, according to Gurpreet Singh, U.S. health service sector leader for PwC. Companies are already beginning to use AI to make their financial and tax reporting more efficient or automate parts of their supply chains.
“That investment is happening today,” Singh said in an interview with HealthExec. “Minimizing the use of manual labor when you could use a computer to create a better, faster, safer approach.”
In the near term, Singh expected more AI investments to assist with claims processing by payers and adverse event processing at pharmaceutical companies. There will be applications of AI, he said, which will more greatly impact patient care, like being able to predict outcomes for patients with autoimmune disorders, but those advancements “will take some time.”
2. ACA reform isn’t dead, it’s just more complicated
The Affordable Care Act survived 2017 without being fully repealed, but 2018 could see Republicans in Congress and the Trump administration chip away at pieces of the law. Rather than achieving these goals through a single piece of legislation, it will be the sum of piecemeal regulatory and legislative actions, like CMS expanding ACA waivers or the Internal Revenue Service weakening enforcement of the individual and employer mandates while Congress expands the use of health savings accounts and tries to roll back parts of the Medicaid expansion.
This adds up to making 2018 will be another year of policy uncertainty for healthcare, so the report recommended organizations be focused on “greater agility, efficiency and resilience” while understanding what legislative or regulatory changes will actually impact them.
“We’re less focused on the minutiae of different legislative proposals and more focused on what we’re doing to integrate ourselves and help the health system to be really nimble, really flexible and really be patient- and consumer-friendly,” said Nick Ragone, chief marketing and communications officer for Ascension Health.
More specifically, organizations will need to watch for any proposals which could increase their bad debt—such as repeal of the individual mandate through the current Republican tax cut proposal, which would lead to millions more being uninsured by 2019.
“Take a set of safety net hospitals or community organizations, they’re going to have a higher exposure to that bad debt versus a specialty care organization,” Singh said.
3. Tackling the opioid epidemic
With 64,000 deaths from opioid overdoses in 2016—nearly half of which involved a prescription opioid—PwC expects greater collaboration across payers, providers and regulators in addressing the industry’s role in the crisis. Singh said among his clients, he’s already seeing new partnerships being forged between would-be rivals to figure out new approaches, like pharmaceutical companies discussing non-opioid pain treatments.
“You can liken it to diabetes. It’s a tough health problem that not one institution can solve,” Singh said.
Beyond the humanitarian reasons, Singh said these collaborations help move the industry to “where we think the market needs to go” in fostering new, cross-sector relationships.
4. Better preparation for natural disasters
Healthcare facilities faced major tests of their emergency preparedness in 2017, from flooded hospitals in Texas, powerless hospitals in Puerto Rico or facilities threatened by wildfires in California. Some of these disasters proved that long-term investments worked, like the submarine-style floodgates that protected the lower floors of Houston’s Texas Medical Center.
“Even though we had streets filled with water, none of our facilities were affected by flooding,” said Bill McKeon, president and CEO of Texas Medical Center.
But these disasters have impacts on healthcare organizations which go beyond physical damage. Hospitals and other providers may have patients or employees displaced, wreaking havoc on their finances thanks to additional expenses and lost revenue—just ask HCA, which said it lost $140 million in the third quarter due to hurricanes Irma and Harvey.
To avoid consequences like credit downgrades, supply chain disruptions or post-disaster litigation, PwC recommends planning—lots of it, from having days of cash on hand to remain financially stable to setting up virtual care options to moving back office functions to locations out of harm’s way.
5. Greater attention to social determinants of health
One area where PwC’s 2017 predictions haven’t panned out related to the transition to value-based care. Singh said those payments haven’t progressed as quickly as the industry expected. Addressing the social factors which impact health may speed up the transformation in 2018.
Consumers want greater collaboration between community organizations and providers and insurers, the report said. Many are beginning to forge relationships with community health workers, social workers, behavioral health specialists and nutritionists. In one example, Toledo, Ohio’s ProMedica began interventions for food insecurity, leading to a 53 percent drop in hospital readmissions and a 4 percent increase in primary care visits.
“We’re seeing a lot of institutions that are connected to those communities working on trying to get patients access to new treatments,” Singh said.
PwC expects more attention on addressing social determinants in 2018 on the regulatory side in the form of new payment models similar to the existing Accountable Health Communities Model.