State of the Healthcare Industry


The state of the healthcare industry in 2014 can best be summed up by the graph below which illustrates the drop in the number of uninsured Americans during the course of the year. Beginning in January and continuing through the first six months of the year, an estimated 12 million previously uninsured individuals received coverage in large part as a result of the implementation of the Affordable Care Act (ACA). The impact of this unprecedented growth in health plan enrollment challenged virtually every aspect of health plans' operations from customer service to premium billing to care management to provider network services. Providers also felt the impact, resulting in the development of new provider entities and new models of care.

Beyond the sheer volume of newly insureds, there are distinct differences between many of them and previously insured populations as these newly covered members include individuals who were previously uninsurable due to pre-existing conditions, as well as Medicaid expansion adults – many of whom are homeless Because of these differences, the new enrollees are forcing health plans to push into new frontiers in care management for members with chronic high-cost conditions and/or significant behavioral issues.

A number of new entities such as state and federal healthcare exchanges and healthcare co-ops, significant changes in healthcare insurance offerings, and renewed interest in care models emerged from ACA. Despite early missteps, the exchanges were able to enroll over 8 million individuals into health plans, which included the newly created healthcare co-ops in the 26 states in which they operate. Guaranteed issue replaced individual underwriting and essential health benefits were mandated. Dependents up to 26 years of age could be covered on a parent’s plan and strict medical loss ratio requirements were established for health plans. Add to this an emphasis on Accountable Care Organizations and Primary Care Medical Homes and a more intensive effort to comprehensively manage care with a focus on lowering costs and improving outcomes and little was left unchanged during the year.

Because of the number of newly covered individuals, provider access was a big concern going into the year. While it’s uncertain how big an issue this will ultimately be, various care delivery models including telemedicine, increasing use of nurse practitioners and physician extenders as primary care providers and the proliferation of walk-in clinics have grown substantially in anticipation of access becoming more problematic.

In short, 2014 has, to this point, been the year of the most significant changes in the healthcare industry since the advent of Medicaid and Medicare in 1965. The early predictions that our industry could not adapt to ACA or, that because of it, Americans would lack access to care failed to take into account the resilience and innovation inherent in health plans, providers, technology companies and a myriad of other service providers from care management to pharmacy benefit managers. In response to the huge changes in our industry, we move toward the end of the year with a host of new approaches to improved health outcomes, slightly better affordability and an enhanced ability to respond to new environments. The change we saw in 2014 is just the tip of the iceberg as many things put in place are still in their infancy – our industry will continue to see rapid change for years to come.

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