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2016 Industry Outlook

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Get a sense of what to anticipate in the 2016 healthcare landscape in our annual 2016 Industry Outlook: Reducing Cost and Demonstrating Value.

From the perspectives of life sciences companies, health plans, and providers, our experts break down the keys areas you should focus on to prepare for policy priorities in this election year and get ahead of industry trends. Here are some of the key takeaways:

For Life Sciences

  • Political focus on the cost of and access to specialty drugs and biologics will continue, and the drug industry must prepare proactive solutions to put forward.
  • With growing acceptance that patients can play an essential role in achieving a value-based health system, engaging patients has become a priority for all healthcare stakeholders.
  • The pace of public and private sector experimentation with Alternative Payment Models (APMs) is poised to accelerate with its future direction largely being driven by the implementation of the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015.
  • Amidst the pressure on drug prices and the emphasis on value, insurance benefit designs are evolving to shift more out-of-pocket costs to consumers.

For Health Plans

  • As health plans sharpen their focus on value, network optimization will continue to be a lever to manage costs and drive value for beneficiaries.
  • There is significant uncertainty around the exchange market in 2016, which has been driven by lower-than-expected enrollment, CO-OP exits, the underfunded risk corridors program, and concerns about the population risk profile.
  • In the Medicare Advantage market, enrollment growth and plan participation continues to be strong. The government will work to finalize changes to risk-adjustment and star ratings to better account for dual eligibles.
  • The Medicaid managed care rule will be finalized in 2016. With the aim of modernizing the program and implementing best practices, this rule will place new regulations on Medicaid and Children’s Health Insurance Plans.
  • Shifting payment models will continue to blur the lines between payers and providers.

For Providers

  • Building on the goals HHS set to tie an increasing proportion of Medicare fee-for-service (FFS) payments to quality or value, APMs will continue to grow.
  • Most acute and post-acute care providers face lower Medicare FFS updates this year compared to last year as a result of legislative and regulatory payment reductions relative to the market basket.
  • We expect consolidation to continue in the provider marketplace, particularly in post-acute care as clinical and financial risk drives both horizontal and vertical integration.

Read our full Outlook.

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