In its first five years, the Patient Protection and Affordable Care Act made a lasting impact on healthcare, forcing industry leaders to rethink strategies to remain relevant post-PPACA.
In an April 29 webinar, Ceci Connolly, managing director of PricewaterhouseCoopers' Health Research Institute; Sean Duffy, CEO and co-founder of San Francisco-based Omada Health; and Sandi Hunt, a principal in PwC's San Francisco office, discussed five significant trends that have emerged in the health sector as a result of PPACA.
The five trends, which are detailed in a report from PwC's Health Research Institute, are shown below.
1. The shift of risk: The PPACA added force to new payment models that reward outcomes and penalize poor performance such as high readmission rates and hospital-acquired conditions. By supporting models such as shared savings, bundles and pay for performance, the PPACA has accelerated a shift in risk away from traditional insurers and onto providers, pharmaceutical companies and even consumers, according to Ms. Connolly. Moving forward, healthcare providers will encounter much more risk-based payment than they have in the fee-for-service world.
2. Primary care: Primary care teams have once again become a critical touch point in healthcare due to experimentation in new payment models and expansion of insurance coverage, according to PwC. PwC noted that primary care teams have been seen for a long time as the best value in U.S. healthcare. In fact, PwC's report points out, the PPACA recognized this, dedicating billions of dollars more to keep primary clinicians engaged and increase consumers' access to their services. In total, the PPACA has dedicated more than $31 billion to boost primary care. That includes $11 billion over a five-year period for the operation, expansion and construction of federally qualified health centers, which provide primary care to underserved areas.
3. The new entrants: New entrants are rushing into the market to meet the demand for lower-cost, consumer-oriented care options in the post-PPACA era, according to PwC. In fact, more than 90 new health companies have been created since 2010, nearly 30 of which are related to telehealth. Mr. Duffy, whose company makes digital health therapy programs for people with type 2 diabetes and other serious but potentially treatable issues, said he can tie his company's reason for existing to part of PPACA.
In addition to new companies, healthcare players are exploring new business strategies post-PPACA, according to PwC. For instance, providers become insurers (Great Neck, N.Y.-based North Shore-LIJ Health System started its own health plan, for instance), and health players collaborate (CVS entered into a clinical affiliation with Washington, D.C.-based MedStar Health, a 10-hospital system with facilities in Maryland and the Washington, D.C.-region, as an example).
4. Health insurance: Rapid enrollment in the PPACA's public exchanges has demonstrated the potential of retail-style health insurance and spawned renewed interest in private exchanges, according to PwC. In 2015, about 11.7 million people enrolled in health insurance coverage through PPACA marketplaces. Of the 8.8 million people who signed up on the federal exchange specifically, 2.2 million had returned from 2014 to actively shop around for this year's health plan.
PwC also noted that for insurers, the shift from the business-to-business model toward a post-PPACA business-to-consumer model is already underway. Insurers are responding to consumers' desire for information and developing tools that consumers can use, Ms. Hunt says. She says the most obvious change with the PPACA is development of public marketplaces, some of which are run by states and some of which are run by the federal government with cooperation from states.
5. Reform's nuances: States are now key players in the reconfigured healthcare landscape, as the PPACA gave states notable discretion in how the law could be implemented, according to the PwC report. That discretion resulted in variation as far as how states implemented the health law, leading to highly diverse, geographically dependent health reform experiences, the report reads. For instance, 29 states plus Washington, D.C., have decided to expand Medicaid, while other states continue to debate the issue. Also, states have taken different approaches to managing their marketplaces. Some states have developed their own marketplace, and other states are working with the federal government on a partnership model.
Looking forward over the next five years, PwC encourages industry leaders to visit strategies that emphasize saving over spending and quality over quantity, watch closely as the reimbursement model moves from fee-for-service to accountable care, innovate to meet the demands of the new healthcare consumer, pursue opportunities to enhance consumer choice and engagement in selecting health benefits and work with states as they continue to shape the future landscape.
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