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Five Trends to Watch – Healthcare Annual

In an industry steeped in tradition, the COVID-19 pandemic has catalyzed change.
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In an industry steeped in tradition, the COVID-19 pandemic has catalyzed change. Several healthcare trends have emerged during the crisis; here are five that are shaping up to profoundly impact the way services are delivered.

  1. Telehealth is here to stay

    Technology issues, reimbursement rates, and physician reluctance kept the usage of telehealth low before the pandemic. Healthcare analytics firm FAIR Health reports that telehealth represented just 0.12 percent of insurance claims in 2018. But when elective procedures were suspended in Texas and across the nation during the pandemic, and patients began avoiding physician offices, doctors quickly transitioned to virtual patient visits. Federal regulation followed, allowing for telehealth visits to be billed like an in-person appointment. Today, nearly all physicians and healthcare systems offer a telemedicine option. Market research company Arizton estimates telemedicine will become a $10 billion industry by the end of the year, with double-digit year-over-year growth of around 80 percent.   

  2. Prospective Payments and Care Incentives

    Due to a health insurance system that pays most physicians for the services they perform rather than maintaining the overall health of the patient, revenues collapsed when elective procedures were canceled during the pandemic. Fee-for-service payment also offers incentives to perform unnecessary care, as more procedures mean more revenue. Even before the pandemic, some physicians had been transitioning to value-based care with prospective payments, where providers are paid upfront per patient to keep the patient healthy. The pandemic only increased the calls to transition to this new model of compensation. “At the end of the day, employers are looking for more control of their annual spend with more predictable costs year over year,” says Scott Flannery, who oversees operations for United Healthcare in North Texas and Oklahoma. The prospective payment model can provide that consistency.   

  3. Fighting COVID-19 with an Old School Treatment

    The Covid-19 pandemic has forced the medical industry to turn back to previously used techniques. Convalescent plasma has been a treatment since the 1918 flu pandemic, when plasma from the blood of recovered patients was used to treat those still suffering. At UT Southwestern, patients who have tested positive and then negative can donate their plasma and the antibodies it contains. Studies are underway to measure its effectiveness against the virus. A study in the Journal of the American Medical Association says that treatment in the early stages of the disease may be beneficial, but that more studies are needed.   

  4. Ongoing Consolidations

    The healthcare market has been transitioning from independent hospitals, clinics, and doctor offices toward a model that brings everything together. Private practices are being snapped up by large health systems, corporations, and private equity firms. Becoming part of a larger business frees up physicians to focus on patients and no longer worry about running the company’s back office, dealing with real estate decisions, marketing, and other operations. But when a clinic becomes part of a system, the physicians lose control of other aspects. When the clinic is aligned with a hospital system, for example, costs tend to go up, as the physician may be incented to refer patients to the parent health system, even if that hospital is not the best or most cost-effective choice.    

  5. Addressing the Social Determinants of Health

    Healthcare costs are rising unsustainably in the United States, accounting for 20 percent of GDP in recent years. But this hasn’t led to better results; outcomes are worse in the U.S. than they are in other countries that spend less on healthcare. Part of that inefficiency is the disparity in social determinants of health, such as education, transportation, healthy food options, and employment opportunities. Addressing these upstream needs can reduce spending on the back end and keep more people out of the hospital. This is leading to mental health professionals responding to 911 calls, checking in on the vulnerable, and other proactive measures.

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