2015 saw plenty of changes and some inklings as to what may be in store for us in 2016.
While there was plenty of noise around ICD-10, it was a non-event in 2015. Likewise, while there was plenty of noise around interoperability in 2015, or lack thereof, the real problem is not a technology one – though that is an easy target. Precision medicine, exorbitant drug pricing and ever abundant amounts of cash flowing into digital health all took stage in 2015 which color our predictions for 2016.
But rather than recite a bunch of predictions that are blatantly obvious, as is our tradition, we wish to push the boundaries. With that in mind, here are our annual baker’s dozen of predictions for 2016.
Cyber-security Hacks Increase as Value Escalates
The value of health data doubled on the dark web last summer despite the volume going up. With a premium price placed on such data, expect the battle to escalate between nefarious hackers and IT departments. With current systems scarcely able to meet the challenge, expect IT vendors to begin considering Blockchain in 2016 – the uber-secure system behind BitCoin.
EHR Vendors Begin Taking Big PHM Market Share
It has taken several years for some of the major EHR vendors to hone their PHM offering to the point where it is even reasonably adequate to consider in a bake-off against best of breed vendors but that time has come. PHM best of breed vendors would be wise to further focus their resources on those EHR vendors who still are light-years away from delivering a capable PHM solutions suite or those EHR vendors that remain myopically-focused on providing PHM solutions that only work in their EHR – a dead-end strategy in our view.
Telehealth Matures, Consolidates
With over 50 percent of states now requiring payers to cover telehealth services, we will reach a tipping point in 2016 leading to industry consolidation. Larger telehealth vendors will begin acquiring niche players in specialties such as women’s health, behavioral health, or physical therapy. Two of the leading vendors (e.g., American Well, Doctor on Demand, MDLive and Teledoc) will merge in 2016.
Physicians Flock to Direct Primary Care
Faced with the prospect of burning out or returning to the roots of personalized medicine, more physicians will transition to direct primary care (DPC) (a more egalitarian form of concierge medicine). Fewer than 10 percent of PCPs do it now, but that number should more that double to 18 percent in 2016 as the added pressures of insurance reimbursement, quality reporting, MU attestation and churning through patients just to keep the lights on continue to add up. EHR vendors such as Amazing Charts, who are targeting DPC will do well.
APIs Gather Steam but FHIR APIs Doesn’t Become Mainstream —
Most FHIR product actions in 2016 will be on the edges rather than where the bulk of patient data resides – in EHRs. FHIR support will continue to pop up in places where few providers can actually use it. No major EHR vendor will release a comprehensive set of production-ready FHIR profiles and resources in 2016.
CCM Code Underwhelms
Though CMS’ new billing code for chronic care management services landed with a big splash in 2015, it will sink rather than swim in the provider market in 2016. Perhaps if documentation had been more tightly integrated into other programs (e.g. MIPS or Meaningful Use), or if the requirements were not so challenging (particularly the patient copayment), this would have been a better bone for CMS to throw to the ambulatory market. Like the challenges faced for CMS’s Pioneer ACO program, expect CMS to go back to drawing boards on CCM in 2016, releasing new, less onerous guidelines in early 2017.
Increased Attention on Referrals Transactions
In 2016, providers will recognize that the humble and largely paper-driven referral is the triggering event for care coordination. It represents the best time and opportunity to marshal the information needed to make cross organization workflows more functional that they are. CNM, care management, and analytics vendors, all who are at the nexus of referral management, will roll out new referrals applications in 2016 or require a niche vendor. EHR vendors will continue to struggle here as referral management across a heterogeneous EHR community remains a secondary concern.
Digital Health Investing Sees Steep Decline
Investment dollars have been pouring into the digital health market at astounding rates over the last few years but this will slow dramatically in 2016 dropping by roughly a third. There is simply more capital available than solid companies with attractive business plans to invest in and few unicorns on the horizon.
Data Governance, Ethics and Consent Stymie Interop
Yes, there are plenty of interoperability issues today. The technical ones, while challenging, pale in comparison to the softer issues of governance, ethics and consent. In 2016, leading HCOs will look to develop common data curation strategies that go beyond the widely used, albeit limited in context, DURSA that sits within The Sequoia Project.
Pharmaceutical and Med Device Companies Expand Outcomes-based Pricing
Outcomes-based pricing for pharmaceuticals and medical devices will see increasing interest as the rallying cry to reign in run-away drug pricing accelerates during an election year. Yet, we will only see very limited expansion in 2016 due to challenges associated with measuring and attributing outcomes to a given therapy. The ability of today’s heath IT systems to effectively measure such outcomes will be a key sticking point.
CCJR Sets the Direction and Care Coordination Benefits
Following CMS’s lead, commercial payers will begin to implementing CCJR-like payment schemes. Throwing different HCOs into a single boat will create two sets of IT-addressable challenges. First, every participant will need better visibility into care processes of other providers. Second, divvying up the payment will need better contract modeling and the ability to manage exceptions across organizations. HIT vendors will roll out limited functionality in mid-2016 leaving providers to cobble together the rest.
PGHD Meets Wearables with Mixed Success
Patient-generated health data (PGHD) will be a hot topic at HIMSS’16. Proposed MU3 requirements will simultaneous spawn a crop of myopically focused startups and add another product requirement to EHR vendors’ plates. Yet, we will face another year of unmet expectations as consumer-wearables fail to deliver consistent biometric values that can be used in a medical context. On the margins we’ll see progress on incorporating remote patient monitoring (RPM) data into the enterprise as well as broader incorporation of questionnaires and patient surveys into portals (e.g. pre-visit goal setting tools). To the chagrin of many, 2016 will not be the year we see this industry leverage these data to augment risk scores, conduct proactive engagement, or do much beyond following marching orders from DC.
Mergers and Acquisitions Accelerate While Facing Increasing Scrutiny
While 2015 saw a record breaking number and dollar value in healthcare related M&A, 2016 will eclipse that number and maybe even value. Four key M&A activities we forecast in 2016 are:
- A leading, national payer acquires one of the progressive upstart payers (e.g., Oscar).
- EHR vendors with just a modicum of PHM capabilities acquire best-of-breed vendors to meet growing client demand. While valuations will be high, they won’t be outrageous as PHM investors look to cash-out before bottom drops-out.
- Several EHR vendors with reasonably-sized, customer footprints will be acquired or merged with another EHR vendor to gain scale and lower cost structure – particularly SG&A.
- FTC will reject at least one major provider merger that threatens healthy competition in a given market.
There you have it folks, our much awaited and anticipated 2016 predictions. As always, we welcome your comments be they for or against this modest list. We learn best through your learned feedback.