At this time last year, we were just beginning to learn of a new virus emerging in China. Little did we know COVID-19 would bring our country to a halt only two months later and entirely reshape the year in healthcare.
As we emerge into a new year, it’s clear that the pandemic will have a longstanding impact on the entire healthcare ecosystem. Here are just a few of the trends we’re watching at Discovery to help our customers drive efficiency and manage costs in this unprecedented and often unpredictable time.
1. 2021 rings in an era of uncertainty
Never before have we entered a year with so much uncertainty. Despite best attempts at forecasting, providers and payers alike are unsure what 2021 will bring. With the continued impact of COVID-19, a delicate national economy, unemployment, and a new administration in the White House, there are simply too many dynamic variables to know which way the healthcare sector will trend in the months ahead. Even PwC’s Health Research Institute says it is too difficult to pinpoint whether medical cost trends will be significantly lower or higher in 2021.
While some are bullish on the year ahead due to cost savings achieved via delayed care, others are far more cautious. Claims for delayed care and elective procedures began to level out in 2020 and are expected to grow in 2021. Providers will also be on the hook for the rising costs of testing and treating continuing COVID surges. Depending on infection rates, costs to health plans are projected to span a range from $30 to $546.6 billion, according to a report from AHIP and Wakely Consulting Group.
Amidst this backdrop of uncertainty, it is more important than ever to manage costs and drive efficiencies. Payers that focus on fundamental cost-saving strategies will be better positioned to weather the ups and downs, no matter what 2021 has in store.
2. Despite the uncertainty, Medicare Advantage growth will be a guarantee in 2021
While much of the market will be unpredictable in 2021, growth in the Medicare Advantage market is all but guaranteed. Now the fastest-growing segment of the health insurance market, Medicare Advantage will increase to nearly 51 percent of total Medicare enrollment by 2030 according to projections by The Congressional Budget Office as reported by RISE Institute.
The success of Medicare Advantage plans brings about enormous opportunity, but it also brings new competition and new complexities for payers to manage. In just the last two years, 1,200 new plans have been added, making member satisfaction essential as plans look to retain and attract new members. As competition heats up, there is more choice in the market and an array of new benefits being offered. For 2021, CMS reports a 46 percent increase in the number of plans providing supplemental benefits.
Driving profitability in the Medicare Advantage market will require discipline on the part of payers. With booming growth, a member base comprising a sicker population, and historic shifts between plans, payers must continue to deploy proven cost-saving strategies while balancing member needs. Companies like Discovery are committed to helping payers succeed in the Medicare Advantage market by improving operational efficiencies, optimizing premium payments, and ensuring payment integrity.
3. Cost containment will take center stage in the wake of COVID
There is no doubt COVID has placed a burden on the health system. Beyond the physical strain on health workers, the financial burden is real and significant across all sectors of the health ecosystem. Providers and hospital systems have taken substantial hits, and the cost of care for managing COVID patients is skyrocketing. PwC predicts healthcare costs could rise as much as 10 percent in 2021 due to COVID care, increased mental health needs, and the consequences of delayed care during the height of the pandemic.
The administrative burden is also immense. You don’t need to look further than the AMA’s special coding advice to understand the complexity providers and payers face as they look to process and manage claims and payments. This is further complicated by debates as to who bears responsibility for COVID patients who contract the virus while on the job. Add in a heap of regulatory changes that came about during the pandemic, and the risk for inaccurate payments, fraud, and other inefficiencies has never been higher.
4. Telehealth takes hold
As the world quickly shifted to doing business remotely and via Zoom, delivery of healthcare followed suit. With regulatory hurdles cleared due to the pandemic, telehealth took hold. The Mayo Clinic best summed up the rapid adoption as it reported ten years of telemedicine progress condensed in six to eight weeks. A McKinsey & Company report shows telehealth has skyrocketed, from 11% of U.S. consumers using telehealth in 2019 to 46% of consumers now using telehealth.
Even once COVID subsides, we predict growth in telehealth is here to stay. The decade ahead will see providers and patients adopt telehealth in all aspects of care. But much needs to be determined both in terms of policy and payment as we move forward. In the short term, payers should continue to assess all telehealth claims carefully. With the rapid removal of regulation and changes to telehealth payments, both providers and payers face vulnerabilities. Working to ensure payment integrity during this period of transition and rapid growth is critical.
5. New technologies are poised to drive greater efficiencies
The world just watched as a vaccine to fight COVID-19 took shape in less than a year. Similar feats across all aspects of care will be a hallmark of the decade ahead in healthcare. And while there will undoubtedly be many clinical advancements, we’re most excited to see innovation take hold in healthcare administration. AI, machine learning, and advanced data interoperability are poised to drive new efficiencies and unlock new opportunities for our industry, helping to eliminate waste, reduce cost, and make our healthcare system more affordable for all.
It’s projected that AI could reduce healthcare costs by as much as 50 percent in the next seven to ten years. Discovery is excited to be at the forefront of this trend, working with our partners to improve operational efficiency. We continue to innovate with new technology, machine learning, and predictive analytics to accelerate our ability to optimize payments and reduce waste on behalf of our partners so that they can reinvest in their members.
After the roller coaster that was 2020, it is predictable that we would feel a little uncertain as we kick off 2021. But by focusing on what is known and what we can control, there is great opportunity ahead in the payment integrity space. The promise of innovation in healthcare, AI, and machine learning technologies that empower the administrative and payer side of the industry are ripe for Discovery and our customers.