Market Trends 2014/15

HFMA Eastern Michigan Chapter presented Brett Hickman, Merger & Acquisition partner with PWC to speak on market trends for 2014/15.  Highlights included:

 - Walmart will be the #1 primary care provider in 2 years as they move from testing six in-store clinics to 600.

- Half of the Fortune 50 companies are new entrants to healthcare.  Considering that 60% of US stocks are bought by foreigners, what is this trend telling us?

- CVS is going after Walmart with their decision to stop sale of tobacco.

- Three types of costs: waste, the way care is delivered, and self-inflicted (i.e. results from smoking).  We are currently addressing waste through errors and infection control.  Finance, operations, and clinical areas are working together to look at opportunities to deliver care differently at lower costs with better results.  New programs are focused on reducing self-inflicted.  Could we see payers not paying for the after effects for those that do not comply as they do in other countries?

- Hospitals would have to reduce cost by 50% for status quo sustainability (provide same care).  This is pushing for a drastic change in not only eliminating cost from waste, but more on how care is delivered.

- Kaiser wants to move clinic visits to homes; clinic sites too expensive. Only physician visits should be to see a specialist.  Keep an eye on Kaiser to see how they propose to accomplish this.

- Detroit is #1 over bedded in the country with 2,500 beds.  This resulted from a “perfect storm” of downturn of economy, out migration, and decrease in hospital use rates.  We will see hospitals starting to close.  It is happening now in New York.

- Hospital systems are taking control of premiums (becoming payers) to control the distribution of dollars, undercutting traditional payers in market with large employers and narrow networks.

- Physicians are beginning to move towards the theory that they hold the power. Monarch in CA was IPA; now is a 7,000 physician ACO.  The ACO owns the contracts and pays hospitals for use.

- Tenet latest acquisitions will basically have control of Connecticut by end of this year managing 3.5M lives.  Connecticut’s population is about 4M. 

- IBM "Watson" computer collects oncology data and successfully does predictive analysis.  Are we moving into an environment where whoever holds the data will have power to control healthcare? Will this be IBM?

- Predictive analysis is an attempt to be able to project when and what illness a person may acquire.  There is belief we could be moving towards predictive analysis in less than 20 years where a doctor will call the patient to address findings. If the patient doesn't comply, insurance will not pay and it becomes self-pay.  We are seeing that now in P4P.


Compiled by Deborah Sieradzki