Managed Care Outlook for 2015

Amidst changes in healthcare financing and delivery, health plans and providers need to be revising their business models to remain profitable, according to Avalere’s webinar and accompanying report on the healthcare industry’s outlook in 2015.

Avalere has projected that exchange enrollment will reach 10.5 million individuals by the end of 2015. When the third open enrollment period begins at the end of the year, Avalere expects health plans participating in the exchanges will become more active in shaping the market through the evolution of decision support tools to drive consumer choices.

Medicaid is also a topic of discussion as 2014 already saw the addition of 10 million new enrollees and additional expansion is expected for 2015. Avalere has highlighted 6 states to watch for Medicaid expansion: Alaska, Utah, Idaho, Wyoming, Montana, and Tennessee.

“The theme in 2015 for Medicaid health plans will be one of opportunity and growth, but with that growth will come increased scrutiny,” according to Avalere’s report.

In 2015, CMS is expected to release a "mega regulation," according to Avalere, that may pressure the Medicaid market to align more with the marketplace and Medicare. The benefit of this alignment will be that commercial plans can capture Medicaid lives by using existing platforms.

The report also touches on specialty drug costs, which is an issue of concern for health plans given the high-cost of Sovaldi, Harvoni, and Viekira Pak, as well as other breakthrough therapies.

“Questions remain around how to anticipate and subsequently price for these products in a timely manner,” according to the report. “Some states and plans have adopted strict utilization management techniques. Plans continue to explore innovative quality-based contracting, and other mechanisms to manage those costs.”

Focusing on providers specifically, while consolidation will continue, it will likely slow as healthcare systems integrate the providers they have already acquired, according to Avalere. Also, it is expected that providers will increasingly test their ability to bear risk given CMS’ new timeline to shift Medicare fee-for-service payments to quality or value over the next 4 years.

“Regardless of the risk arrangement, health plans may consider oversight programs to ensure contracted providers manage risk appropriately, and may develop mechanisms to pursue performance-based contracting to ensure performance year over year,” according to the report.