An Epidemic of Changes

Besides telehealth, what has been the biggest shift you have seen in how patients are accessing care since the onset of the pandemic?

Matochik: Telehealth, by far, has been the greatest pathway for patients to access care. A recent report from McKinsey & Co., predicts that $250 billion of U.S. health spending could be virtualized based on the COVID-19 rise in utilization. However, there are other ways patients have been accessing care. For instance, community health workers (CHWs) have played a critical role in providing care in the community and nationwide there are initiatives to deploy CHWs to perform contact tracing. In the employer market, companies have ramped up communications about their EAP services so employees know what services are available to them during the pandemic and some have even expanded their offerings. In fact, a recent survey showed that 53 percent of employers are providing special offerings to address the emotional impact of COVID-19. As a result, more employees are utilizing their EAPs.

Smith: Holistic employee safety – emotional safety, financial safety, ethnic/religious safety, etc. – remains the top priority for companies. We will continue to see the healthcare industry leverage technology and data in a myriad of ways, but specifically to support earlier interventions, reengineer primary care, and provide mental well-being services such as contingency management for treatment of substance use disorders. A troubling pattern is the number of individuals who have delayed or skipped care because of the COVID-19 pandemic. New polling from Kaiser Family Foundation (KFF), indicates that nearly half of Americans said that either they or someone in their household has skipped or delayed medical care. Sixty-eight percent expect to get the postponed care within the next three months, and almost all expect to eventually get care. However, of those who postponed care, 11 percent told KFF that they or their family member’s condition worsened. While elective services have decreased, health systems are also seeing decreases in emergencies such as strokes and heart attacks which is also really troubling.

Is this value-based care’s moment to shine? Or do you see the U.S. moving toward reference-based pricing or even price-fixing?

Smith: We will continue to see iteration in both areas but it can be expected that many organizations and providers will look for ways to limit their risk exposure and slow the pace of value-based care adoption that we were observing before the pandemic. Today, approximately 60 percent of healthcare spend is tied to some form of value-based payment: alternative payment models with financial incentives linked to effectively managing a population or episode of care, such as shared savings, at-risk, pay-for-performance, care coordination fee, bundled payments, or capitated payments. COVID-19 has upended healthcare services consumption and put significant strain on healthcare resources across the U.S. As a direct result, providers in value-based arrangements can be expected to face increased financial risk. Therefore, the question in my mind is to what extent will the pandemic affect the progress of value-based transformation? Providers who have opted to participate in value-based agreements have had to make significant investments in clinical, business, and technology transformations, to be amortized over long periods. In large health systems, these changes may not be unwound easily, so it is very unlikely they will revert back to fee-for-service.

How do you see this public health crisis influencing how networks will be constructed in the future? How might that shift the negotiating power of larger stakeholders like hospitals?

Smith: Some hospitals will not be poised to withstand the financial losses from the current pandemic, leading to an uptick in closures and M&A activity in the coming years. As more systems consolidate, they will gain larger market share making it increasingly more difficult for negotiations. Another trend we are likely to see is an immense amount of care being provided in the home and community. Networks need to consider how they incorporate virtual care and community brick and mortars. FQHCs, primary care settings, and event community-based organizations that provide social services may be administering patient physical, behavioral, and social healthcare and should be considered for reimbursement or a value-based arrangement.

Matochik To pick up on David’s thread on the variety of providers and modalities increasingly being incorporated into network building…from a broker perspective, particularly in the upper middle market and captive settings, being very knowledgeable about the landscape of quality providers and offering data services in this area to self-insureds is a broker imperative if it wasn’t before.

Has this crisis created enough of a shift in the delivery system to open the door for a public option to be offered alongside private insurance coverage in the next five years?

Matochik: There is a 1 in 3 chance the White House and Senate will flip to Democrats in the November election, so the question I hear most is what are the odds that a public option plan will be offered alongside employer coverage in the 2022 enrollment cycle? If Joe Biden is elected president, the odds are high. His plan entails offering a public option plan alongside employer coverage and lowering the age of Medicare to 60. A critical question to examine this summer is what type of public option best fits alongside traditional employer coverage and why?

In what ways will brokers become more competitive moving forward?

Matochik: In the immediate, COVID-19 exposed some deficiencies in effective communications and service offerings. Those brokers who made operational adjustments quickly to level up learned they can retain clients when adversity throws curveballs. So, number one is acting faster. Moving forward, brokers will become more competitive. Over the longer term, brokers who balance being good at addressing the “here and now” while also creating new opportunities for clients through thought leadership will have a sizable edge. To drill down a bit, in my opinion there are five ingredients to focus on heading into 2021 and beyond: 1) figure out how to make the switch from a shareholder-focused organization to a stakeholder-focused one, 2) prioritize emotional leadership with managers across the company, 3) challenge existing revenue models to identify opportunities for increased efficiency and profitable growth, 4) be data driven, and 5) reexamine the company’s talent strategy in a world much more comfortable with remote work.