These are times of constant upheaval in health care: Hospitals are merging, the Affordable Care Act is expanding health coverage (and coverage issues) and employers are simply struggling to find health plans that they and their workers can afford.
So what will the future hold?
To find out, we asked a cross section of experts — from hospitals, physician groups, payers, think tanks, the law, business advocacy and academia — for their 2015 predictions.
Here’s what they had to say:
Robert C. Garrett, chief executive, Hackensack University Health Network
“The Affordable Care Act has led to a dramatic increase in health care coverage recipients, while at the same time the national unemployment rate continues to drop. The result will be an unprecedented number of people expecting — and for the first time being able to afford – quality health care. In addition, the health care industry continues to evolve with new and innovative practices as well as a host of new drugs coming into the market.
“On a broader scale, cheaper gas prices, the continued housing recovery and more jobs will serve to put money back in people’s pockets, raise consumer confidence and contribute to an overall positive outlook for 2015.”
Barry H. Ostrowsky, chief executive, Barnabas Health
“I believe 2015 will find further consolidation on the provider side of the health care industry and greater alignment in more creative ways between payers and providers. There will be continued emphasis on outpatient and retail oriented care, as the industry moves closer to a population management model. Our organization will continue to pursue its well-stated commitment to keeping people healthy through community initiatives.”
Betsy Ryan, chief executive, New Jersey Hospital Association
“I think 2015 will be marked by continued financial pressures on hospitals as they care for uninsured — and underinsured —– patients. Some people may be surprised by that, given that 2014 was the start of the coverage provisions of the Affordable Care Act. But if you delve deeper into some of the enrollment numbers, we’re still a long way from declaring victory in the fight against New Jersey’s uninsured problem.
“For example, at the end of last year’s open enrollment period, the U.S. Department of Health and Human Services reported that about 160,000 New Jersey residents enrolled through the online health insurance marketplace. But when you account for those who didn’t follow through and pay their premiums, or the 'churn' of consumers leaving one plan and signing up for a new one, the number of new marketplace enrollees in New Jersey is only 41,000. That doesn’t include the approximately 500,000 undocumented immigrants in New Jersey who are not covered by any of the ACA’s provisions. Add in the fact that most of New Jersey’s newly insured individuals are in our state’s expanded Medicaid program — which only pays hospitals about 70 percent of the costs of care — and I think we will continue to see serious fiscal pressures on hospitals as they care for New Jersey’s neediest residents.”
Dr. David Shulkin, president, Morristown Medical Center, and vice president, Atlantic Health System
Shulkin offered these predictions for 2015:
"Predictions are difficult, as Neils Bohr said, especially about the future.
"Here are my predictions.
Judith L. Roman, chief executive, AmeriHealth New Jersey
“We’ll likely continue to see incentives between payers and providers become further aligned with the creation of more organized health care delivery systems in an effort to support accountable care models.
“One example is the expansion of our co-branded Community Advantage Plans that we pioneered with Cooper University Health Care last year. Shore Medical Center and Cape Regional Medical Center are a part of that expanded offering in 2015. The co-branded plan design is unique because it further enables patients to have easier access to their physicians as well as enhanced communication with them. Created with tiered networks, the plans also provide more choice based on an individual’s or business’ budget.”
Joel Cantor, director, Rutgers Center for State Health Policy
“The behavioral health system, (mental health and substance abuse treatment), will receive closer scrutiny. Our recent report, sponsored by the Nicholson Foundation, showed that three fourths of high-users of hospital inpatient services have behavioral health diagnoses. The behavioral health and medical care delivery systems have long been separate. In 2015, we will see a rethinking of how best to increase behavioral health service capacity and better integrate it with medical care delivery.
“We will see more large scale hospital system mergers and physician practice acquisitions, leading to growing concentration in New Jersey’s health care delivery markets. System integration can bring benefits in the form of greater investment in quality improvement, but there are huge downside risks to consolidation. A strong body of research clearly shows that hospital market concentration leads to higher prices charged to private insurers. There is less research on the effects of hospital-physician group consolidation, but recent studies suggest that these are likely to be cost-increasing as well. Nationally, we have historically long run of zero or low health care cost increases: 2015 could be the year that costs rebound, largely due to hospital mergers and acquisitions of physician practices.
“Another N.J. hospital trend, the emergence of for-profit ownership of New Jersey hospitals in the past couple of years, will continue to show fault lines between insurers and consumers on the one hand, and the hospital chains on the other. It has been easier for some of these hospital corporations to take advantage of loopholes in New Jersey law that requires insurers to pay out of network charges for emergency department treatment than to find ways to make care more efficient and higher quality. In 2015 this struggle will continue.”
Christine Stearns, vice president, health and legal affairs, New Jersey Business & Industry Association
“From our perspective, the biggest health care concern continues to be affordability. Rising costs threaten many employer's ability to offer coverage, particularly small businesses. The Affordable Care Act has been a challenge for employers to implement, and with more regulations expected, it will continue to be a primary concern in 2015.
“Closer to home, there has been a major focus on out-of-network provider charges by Assemblyman Craig Coughlin (chair of the Assembly insurance committee). The challenge will be to find solutions that ensure access to quality care but also put an end to the enormous, and sometimes completely unexpected, charges. It is a thorny issue, but there is a real commitment in both houses of the legislature to find a solution so I expect action on the issue in 2015.”
Larry Downs, chief executive, Medical Society of New Jersey
“The biggest trend in health care I will be watching in 2015 is the narrowing of patients’ choice in health care services.
“In this environment of downward pressure on health care costs, patients will be squeezed as their insurance benefits get paper thin. Insurers continue to design low premium, narrow network health plans that result in less physician and facility options for consumers. Also, more patients will be self-financing big chunks of their healthcare as increasingly high deductible plans are offered through the exchange and employer-sponsored options.
“In 2015, a dollar’s worth of health care will still cost a dollar. However, the patient will be paying more (and harshly more if they exercise 'choice'), and the insurer will be paying less.
"MSNJ will be monitoring health care payers’ benefit designs and policies to make sure patients have reasonable access and choice in healthcare services. In 2015, MSNJ will be urging insurers and state regulators to increase both transparency and adequacy of benefits to the health care consumer.”
Raymond J. Saputelli, executive vice president, New Jersey Academy of Family Physicians
“While providing the best care to patients remains the highest priority for family physicians, the practice environment for 2015 will continue to demand that we meet the challenges devolving from the ACA, including the implications of narrow insurance networks, patients with high deductible plans and reimbursement models moving from fee-for-service to value-based payments that put greater focus on patient outcomes and accountability.
“Over the next year, family medicine practices will also face new, complicated government mandates that can significantly impact cash flow, including the switchover to (a new coding system), Medicare penalties for primary care practices that haven't demonstrated meaningful use, the phasing out of the ACA's Medicaid Primary Care Pay Parity incentive for primary care physicians, and required investments in technology and practice transformation to keep practices viable.
“In 2015, family physicians must continue to manage their practices in a manner that satisfies our patients' needs — and as insurance payments become increasingly tied to performance and patient outcomes, success will depend on family physician practices functioning as a team and transforming the structure of their practices to meet these demands. We expect to see continued practice consolidation, mergers, formulation of integrated networks, hospital acquisitions, new primary care models and direct contracting with employers who are trying to offer affordable health care benefits.”
John Sarno, president, Employers Association of New Jersey
“I think 2015 will be a very dynamic year for health care, both nationally and in New Jersey. The federally facilitated health care marketplace (HealthCare.gov) is doing reasonably well and is building good enrollment in the individual market. SHOP (the small employer marketplace at HealthCare.gov) will remain limited in 2015, but small group rates will remain moderate.
“However, in yet another bizarre twist in the short history of the Affordable Care Act, the U.S. Supreme Court has once again imposed itself into the health care market and will decide whether the federally facilitated marketplace will remain viable. If the court eliminates the subsidies available to individuals in New Jersey, the state will need to decide whether to operate its own exchange, thus setting up a struggle between the legislature and the governor over health care policy.
“But regardless of how the court decides, 2015 will be a year of innovation. Hospitals, providers and insurance companies will partner to offer a range of insurance options, including narrow network and ACO plans. Additionally, employers will continue offering health care to employees because of more choice and relatively lower premiums.”
Raymond Castro, senior policy analyst, New Jersey Policy Perspective
In 2105, Castro is looking for "greater cost transparency for consumers: the health care system is still the only place you go to purchase a service and have no idea how much you are going to be charged until after you have received the service.
"The state needs to do much more to reign in health care costs at all levels of the health care industry. It can start by prohibiting inappropriate charges for consumers who are treated by medical providers who take advantage of the out-of-network rules."
Linda Schwimmer, vice president, New Jersey Health Care Quality Institute
“The ACA is under tremendous threat if the Supreme Court decides that subsidies can only be used in state run marketplaces. New Jersey has a federally run marketplace and over 82 percent of the plans purchased on it are paid with a subsidy. If the subsidy goes away — the marketplace and the law will have to be revamped.
“The continued expansion of Medicaid and making sure that there is enough access to care is an important issue for us. The expansion of Medicaid in New Jersey has meant that 400,000 more people are now insured — which is good for their long-term health, but we need to make sure that there are enough willing providers to care for people with Medicaid coverage. This challenge requires taking a hard look at how we reimburse for Medicaid and why is it so much lower than Medicare and commercial rates.
“The 'out of network' issue continues to harm consumers and needlessly add cost to the health care system. We expect the legislature and executive branch to finally address this issue with serious reform which will create more transparency around actual costs to consumers, control costs for the state-funded health benefits plans, and resolve an issue that has been brewing for the last eight years.
“Finally, we expect to see more public reporting of quality measures as we move away from a 'fee for service' focused health care system. The Leapfrog Group will be reporting C-section and episiotomy rates by hospital this year. There will be reporting on surgery quality as well to support new payment models called 'reference-based pricing.'"
Mark Manigan, attorney and member of the health law practice group at Brach Eichler
“Consolidation will continue apace. Health systems and physician practices will continue to merge both horizontally (system to system, medical practice to medical practice) and vertically (under health systems) as health care providers position themselves for population health management and risk based contracting with payers. M&A activity will continue to be robust in the outpatient service provider market as well (ASCs, anesthesia, pain management and urgicare) as cash continues to flow to the consolidators from private equity and Wall Street.
“We will start to see material transactions between insurance companies and health care providers that are not fee-for-service driven. Look for commercial transactions with shared savings components and elements of risk shifting.
“Insurance companies will become more aggressive in insurance benefit product design with the goal of incentivizing folks to stay in-network. We will see more plans with high out-of-network deductibles and flat out caps on out-of-network benefits. We may also see insurance plans organize provider networks into tiers based on the cost or efficiency of care and attempt to direct patient traffic within the plan through premium pricing and cost sharing incentives.”
Ward Sanders, president, New Jersey Association of Health Plans
"2015 is shaping up to be an important year for health care and health care coverage issues. The biggest unknown, of course is how the Supreme Court will handle King v. Burwell, in which the law's challengers argue that Congress intended to limit federal tax credits to residents of states that set up their own insurance marketplaces. This could impact the approximately 150,000 New Jersey residents receiving a subsidy under the law. This case is important to residents eligible for these subsidies, hospitals, insurers and others.
"The other key issues are addressing cost-drivers. For example, will the Legislature have an appetite to step in to stop price gouging by a small number of hospitals and physicians? As a state, we have to ask whether it is OK to allow a hospital to charge $14,000 for a couple of stitches. The Assembly Financial Institution and Insurance Committee has held three hearings and is gearing up to take some action. With more for-profit entities with historically aggressive charging practices coming in to New Jersey to purchase hospitals, there is a lot riding on solving this problem now. Also, spending on specialty pharmaceuticals is routinely hitting six figures per individual for a course of treatment, which is unsustainable over the long term. Both of these trends are driving up the cost of coverage for individuals, businesses and other purchasers."
ALSO ON NJBIZ: