Outlook for the ’20s: What’s on the horizon for medical practices

As we reflect on the past decade, I challenged the MGMA Government Affairs team to consider healthcare policy trends for the next 10 years and what practices should expect. We benefit from access to medical practice leaders from across the country, as well as policymakers in Washington, D.C. With this unique perspective, here are some key trends we see playing out into the 2020s:

The pendulum swings back to medical group practices

Purchasers will demand – and payers will design – plans that require consumers to visit ambulatory care settings where appropriate. While recognizing the importance of hospitals as safety net providers, the government will eliminate pay differentials across outpatient sites of service that currently favor hospital-based settings. Clinical innovation and technological developments will continue to expand the types of services that can be performed in non-facility settings. With greater transparency, no one will be willing to pay the current mark-up on facility-based ambulatory care. The balance of power will shift toward group practices as payers realign incentives and facilities struggle with greater overhead and fixed costs. 

An ounce of prevention is finally worth a pound of cure 

Increased emphasis on prevention, rather than treatment, is on the horizon. Telehealth and virtual care won’t be just buzzwords, but instead increasingly important tools for early intervention and care management in the next decade. Prevention will finally make sense to policymakers and government actuaries, who have been slow to endorse reimbursement for non-face-to-face services due to short-term budgetary concerns. 

Data are beginning to show that services like chronic care management not only improve patient outcomes but save money in the long run. Expect to see greater alignment between reimbursement policy and preventative care, including non-traditional services like telemedicine. Primary care specialties will be obvious beneficiaries of this shift toward prevention.

Data is king 

The past decade was one of data-gathering, while the next decade will be one of data-leveraging. We are entering a decade of data-driven decision-making to improve operations, business modeling and care management in group practices. In the ’20s, we expect to see the industry-wide push towards interoperability begin to bear fruit – but efforts to ensure data security and maintain patient privacy will play out well beyond 2030. 

Investments in information infrastructure will prove more valuable than in the past. Data will play an important role in precision medicine, such as treating patients with certain diseases and intervening before costly events such as hospital admissions or readmissions. With effective population-based analytics, data will help practices with financial modeling and allow for more risk-based contracting or participation in advanced alternative payment models (APMs). As Medicare and commercial payers shift risk to physicians, group practices should prepare to monitor patient costs, measure outcomes and improve population health.

Medicare Advantage plans will have an advantage

Patients will increasingly favor to the expanded services (albeit with trade-offs) of Medicare Advantage. Enrollment in Medicare Advantage has nearly doubled over the past decade. As of 2019, one-third of Medicare beneficiaries were enrolled in a Medicare Advantage plan. Driven by consumer behavior, this trend will continue irrespective of political calls for “Medicare for All” or competing efforts to dismantle the Affordable Care Act. Ironically, Medicare Advantage may prove to be the first “buy-in” point under a modest Medicare for All compromise where patients could access the government program at age 55.

The growing Medicare Advantage market could present new challenges and complexities for group practices stemming from non-standardized payment and administrative policies. It will also shift more power in the hands of private plans and exacerbate some of the most frustrating policy issues of the day, such as the increased use of prior authorization.

Value-based growing pains become chronic

Despite significant attention to this issue, the government has shown little aptitude in implementing value-based care reform. Medicare’s Innovation Center is 10 years old yet has been frustratingly slow in producing new APMs, and results from existing models have been mixed. The lag in APM development has left most physicians participating in the Merit-based Incentive Payment System (MIPS), where resources and time spent on reporting have outweighed small bonuses. Group practices understandably may continue to find it challenging to invest resources in Medicare’s value-based programs in the ’20s. 

There is no talisman predicting the success of value-based reform. In the coming years, the path to value will continue to have many twists and turns as it is too soon to tell which payment models will prove sustainable and successful in the long run. Private payers, on the other hand, have greater opportunity to pilot innovation. Through data sharing and analytics, technological tools, infrastructure support and less bureaucracy, the private sector will be better positioned than the government to facilitate value-based payment reform over the next decade.

2020s will bring a clearer vision of prices

The end-of-decade push by lawmakers for greater hospital price transparency underscores patient demands to better understand and anticipate out-of-pocket costs. This trend will undoubtedly continue and expand to require medical groups to disclose charges and negotiated rates.

Albeit shrouded in good intention, price transparency won’t be as easy as it sounds. Anti-trust and anti-competitive concerns will continue. Posting prices may seem like a quick fix but getting to the true upfront cost for patients will prove difficult. Ultimately, health plans are in the best position to inform patients about their coverage and out-of-pocket costs, and lawmakers will hold plans’ feet to the fire alongside providers.

Hear Anders Gilberg discuss the MGMA Government Affairs team's healthcare outlook for the 2020s in this MGMA Insights podcast: