Deloitte Annual Review: Public Health Crises, Drug Value, and Healthcare Insurance Trends

Deloitte has recently conducted a series of in-depth analyses on major news and developments in the U.S. healthcare industry,A Review of Major Healthcare Events in the United States and Globally in 2016

For most people, the U.S. presidential election and the subsequent transition period are the primary issues we need to consider,But beyond that, many other significant events have also illuminated the healthcare industry this year. This reportIt directly addresses the key issues facing life sciences and healthcare companies, providing information on the latest policy, regulatory, and legislative changes, along with analytical insights from industry professionals. VCBeat (WeChat ID: vcbeat) has compiled and translated this content for you.。

With the emergence of the Ebola virus crisis in early 2016, the infectious disease outbreak, which had been a focus of international public health news for years, appeared to be subsiding. However, as the Ebola issue gradually faded from view, the Zika virus crisis came into focus. Zika virus infection is a disease transmitted by insects and through sexual contact, and it can cause severe congenital malformations. There were even concerns before the Olympic Games that athletes might contract the Zika virus. Although no major outbreaks were reported during the Olympics, we have not seen the Zika virus crisis fully resolved.

Meanwhile, in 2016, another global public health crisis captured public attention—the opioid epidemic. The roots of this problem are multifaceted, ranging from income inequality to the treatment of chronic pain. Although we now have a deeper understanding of its treatment and monitoring mechanisms have been established across U.S. states to curb its spread, we are only just beginning to understand how to address the issue at its root. Additionally, the newly passed 21st Century Cures Act includes provisions for plans and funding to combat the opioid epidemic.

Amid the final regulations of the 2015 Medicare Access and CHIP Reauthorization Act (MACRA) and announcements of multiple new payment models, the Centers for Medicare & Medicaid Services (CMS) has kept health systems and clinicians busy transitioning to new payment arrangements and plan designs. However, thus far, these arrangements remain voluntary, with no mandatory requirements. Barring significant regulatory or legislative changes, there will be no mandatory bundled payment requirements in the near future. Early adopters have already drawn many lessons from bundled payment initiatives, and healthcare institutions can learn from various forms of Accountable Care Organizations (ACOs) and Patient-Centered Medical Homes (PCMHs).

The final rule for MACRA was published in early November. A comparison between the proposed and final versions of MACRA reveals that CMS has provided healthcare systems and clinicians with a transition period to adapt before certain aspects of the program are implemented. Clinicians can now report performance data over a short timeframe to avoid negative payment adjustments under the merit-based incentive system. Additionally, CMS has eliminated cost measures for the first year of implementation.

1. The second evaluation of the Bundled Payments for Care Improvement (BPCI) initiative revealed that savings among participants were statistically significant.

2. The next pressing question for research is whether healthcare organizations can also achieve such savings from other types of bundled payment initiatives. We explore this issue in our forthcoming Deloitte Center for Health Solutions paper, “Do Bundled Payments Generate Savings?”

In 2016, the debate over drug prices never ceased. However, public attention shifted toward medications that were launched with high price tags or experienced rapid price increases. Meanwhile, consumer surveys indicated that healthcare affordability was the primary concern, with many consumers identifying drug pricing as a major contributing factor. As consumer awareness of this issue grew, leaders in the healthcare industry continued to strive for better alignment between the prices of pharmaceuticals and medical devices and the clinical benefits they deliver.

Therefore, this year has seen a significant increase in value-based collaborations between life sciences companies and consumers, which is likely to better align the value of medical products with consumer spending. This also represents another area of focus for the 21st Century Cures Act, which provides policy guidance on reforming how the government reviews and approves drugs.

Many large health insurers have announced plans to exit the public health insurance market, leaving consumers in certain U.S. regions with fewer coverage options and facing higher premiums. Premium subsidies will help shield low-income consumers from these price increases. Deloitte’s own consumer research found that individuals who obtain health insurance through their employers remain the most savvy shoppers. They express strong confidence in the affordability of their coverage and report satisfaction levels comparable to those of employer-sponsored plan participants.

Despite significant breakthroughs in the U.S. healthcare sector over the past year, and with the new administration and Congress having established policy directions, we must remain committed to enhancing performance and value in healthcare delivery. Furthermore, healthcare spending has begun to accelerate once again, partly due to policies extending coverage to broader populations. Additionally, average life expectancy in the United States appears to be declining, in part because we have not fully understood what is required to maintain healthy habits and lifestyles. Even though smoking rates are currently low, chronic diseases related to physical inactivity and poor diet remain prevalent. While I am enthusiastic about the prospects of applying new digital technologies to health solutions and the lessons drawn from behavioral economics, I am also awaiting truly impactful outcomes that can deliver sustained benefits to the general population.

Author:Sarah Thomas, Managing Director, Health Solutions Center, Deloitte Consulting