As we head into the 2020 election season, polls suggest clearly that healthcare is a top of mind issue for voters—and candidates are responding with a focus on the cost of prescription drugs, Medicare expansion, and responses to the opioid epidemic. Health plans have opportunities to position themselves positively in this environment on a range of issues, including:

1. Expansion of Government Markets: Recent data from Avalere’s All-Payer Engagement Model shows that there has been a steady growth in the government markets (i.e., Medicare and other government, Medicaid, and on exchange) since 2013. At that time, 39% of individuals were enrolled in a government insurance program. In 2018, that number grew to 47% and is projected to reach 51% in 2023. In the 2019 final rate announcement, Medicare Advantage (MA) plans were also given the guidance that they could create disease-specific plan designs or expanded service offerings. MA and Medicaid managed care are primed for growth going forward—at rates likely to exceed Congressional Budget Office projections. Given the favorable tailwinds in these markets, the landscape has become even more competitive. Health plans will be evaluating opportunities to capture market share, including leveraging well-managed provider networks, attracting those who are aging in or are currently in fee for service and using new benefit flexibility to design plan options that address medical and social determinants of health.
2. Focus on Drug Pricing Solutions: Avalere surveys of health plans show an increased use of data to engage value-based purchasing for drugs. In 2018, we conducted a survey that found that 25% of health plans have an outcomes-based contract in place, and 85% of them are considering additional contracts. Health plans are also increasingly aligning to require cost effectiveness data on new launches and to use post-market data to evaluate the effectiveness of products among health plan populations.
3. Alignment of Provider Incentives: Recent data from the healthcare payment learning and action survey finds that fee-for-service payments have decreased over the years, from 62% in 2015 to 41% in 2017. The same research also shows that alternative payment models and population-based payments have steadily increased over time. In 2015, this number was 23% and has grown to 34% in 2017. Health plans continue to prioritize value-based risk arrangements with providers to improve performance across utilization and quality measures with increasing interest in leveraging comprehensive claims and electronic health record data to inform performance across provider networks. CMS continues to advance programs that promote value-based payments in exchange for increased accountability for costs and outcomes. Most notably, CMS recently announced the Primary Cares Initiative, which offers primary care practices multiple pathways to assume greater financial risk in return for flexibility in care delivery.
4. Operational Improvement from Data Technology: Health plans are now more focused on utilizing patient data to enhance their operations. Plans are using this information to identify patients with gaps in care, stratify patients into risk levels, utilize risk profiles to develop interventions, and evaluate return on investment for programs.
5. Engagement in Social Determinants of Health: Recent data suggests that social risk factors increasingly drive MA costs. According to research conducted by Avalere, more than 56% of duals lived in a low-income neighborhood (less than $30,000) compared to 16% of non-duals. Additionally, a higher prevalence of chronic conditions exists among MA duals compared to non-duals. Health plans are increasingly focused on solutions that address social determinants of health, including benefits such as transportation and housing, that reside out of the traditional major medical benefit offering.

Voter views of managed care will be shaped in part by how plans position around these issues, and active engagement is likely to help create a positive climate for growth in the coming years—irrespective of the result of the election.

Avalere will continue to engage these issues and others during the 2020 election cycle. To receive updates, connect with us.