Healthcare News & Tech

The Evolution of Health Plans

February 09, 2017

Overhead view of a doctor's desktop showing technological development over the years for doctor's notes with a pen and pad, a laptop, and a smartphone.

The health plan you purchase today may not resemble the plan of your parents or grandparents at all. For decades, Americans received healthcare under the traditional fee-for-service system. Insurance companies reimbursed patients or payers based on every service provided to patients. This seemed logical on the surface, yet problems became clear as the industry realized more emphasis needed to be placed on health outcomes. The Affordable Care Act (ACA), patient preferences and advancing technology have encouraged a shift away from the fee-for-service model to alternative payment models (APMs) that offer financial incentives to promote greater value to patients and payers. In essence, APMs are value- or performance-based reimbursement methods.

APMs Increase Across US Plans

According to a report by Health Care Payment Learning & Action Network (HCP LAN), 25 percent of reimbursements from public and private plans are expected to flow through an APM that supports improving patient care and coordination in 2016. Broken down between public and private health plans, 22 percent of private healthcare dollars, 41 percent of Medicare Advantage healthcare dollars and 18 percent of Medicaid healthcare dollars will be reimbursed through APMs developed upon a fee-for-service architecture or population-based payment. This is an improvement from the look-back estimate of 23 percent of reimbursements through APMs in 2015.

APMs Linked to Patient-Centric Care

The shift toward APMs is representative of a greater focus on patient-centric care, including promoting comprehensive and coordinated care among physicians, preventive care, reduced risks and improved outcomes. The value and price of health care for patients and payers is becoming intrinsically linked to the quality of care provided by physicians. This is a far cry from a time when physicians concentrated on treating the one condition relevant to their practices and did not always take into account the patient’s comfort, preferences, potential health problems and issues treated by other doctors.

As more private and public reimbursement models shift to alternative forms that require a greater value or improved performance, providers may need to emphasize the patient experience. How patients experience care, including the emotional and physical comfort they receive, how long they have to wait for tests, treatments and answers, as well as whether their preferences are recorded and adhered to can influence the value and effectiveness of services, thereby affecting reimbursement. Care that focuses on patient’s needs and desires may lead to improved outcomes, benefiting both patients and health care providers.

Patient Care Further Embraces IoT

The Internet of Things (IoT) is a system of autonomous devices and sensors patients can wear or use to capture an immense amount of health data. The medical IoT industry – now commonly referred to as the Internet of Health Things (IoHT) – specifically includes consumer-based devices, external wearable devices, internal imbedded devices and stationary devices. There are already plenty of examples of each of these including fitness trackers, insulin pumps, cochlear implants and IV pumps, respectively. This industry offers both patients and physicians increased connectivity, improved communication and advanced analytics. The greater amount of information realized through the IoHT, the better able physicians are to make faster and more accurate diagnoses. It also provides health care providers with a large database to study and use for predictive medicine. This industry is also expected to grow. Grand View Research reported last year that the healthcare sector worldwide will invest almost $410 billion in the IoHT by 2022.

In the coming years, we will likely see patients, medical providers and health plan providers further embrace medical devices and the IoT. Medical devices offer unique opportunities to learn more about individual patients, specific medical conditions and entire populations.

The future of APMs is currently less certain than that of the medical IoT. President Trump has been vocal about his intention to repeal the ACA. While it is unclear what a future without the ACA would look like, Advanced Medical Reviews (AMR), an independent review organization, stays dedicated to their clients and the efficient facilitation of this shift. Amanda Marfise, VP of Strategic Partnerships at AMR, adds, “Healthcare has undergone quite a few major transformations since AMR was founded in 2004, so AMR has the advantage of being adept at adjusting to new legislation and regulations. We are confident we can navigate a new healthcare landscape under President Trump.”

The Evolution of Health Plans