5 trends to spark action for health plans in 2023

As we sit on the precipice of the new year, it’s a good time to look back and reflect on the strides. But what I’m most interested in is what trends are happening in the healthcare industry—and what do health plans need to keep on top of to thrive in the coming year??

These are the trends I’m tracking for 2023:?

1. The big squeeze

The US healthcare ecosystem is under immense financial pressure—and there is no end in sight. Health systems face mounting cost constraints as labor costs rise and expenses for medications and supplies skyrocket. Health insurers are bearing rising medical costs as safety nets from the pandemic expire.

These escalating challenges set the stage for the industry’s evolution toward value-based care. I expect we will see an increase in “capitated” models to strengthen health systems’ cash flow. What does this mean? In these models, physicians earn a fixed amount of money per attributed patient, per unit of time—and it’s paid in advance of care delivery. This type of model helps control medical costs for employers and insurers. What’s more, it may even align incentives as the ecosystem shares the impact of the big squeeze.

But do health plans have the capabilities to administer these new capitated models??

2. Making a comeback

As the world emerges from the worst of the pandemic, people want to make up for the time they lost. They are celebrating with friends. They are taking those long-awaited vacations. And they are getting back to routine healthcare.

We are seeing routine visits and elective procedures pick up. A poll from MGMA found that 55% of practices report their 2022 visit volumes are above 2021 levels. Unfortunately, many people put off medical procedures or care plans—and that will have a greater impact on costs and capacity.?

Rising medical costs will continue to rise across all segments. Payers must explore new approaches and ideas to bend the total cost curve. From captive programs that allow employers to combine employees’ claims experience with other businesses to control medical insurance costs to group purchasing that allows employers or individuals to pool health plan purchasing to aggressive pharmacy reform—there are many options to consider.

How quickly can today’s infrastructure be configured to support creative approaches to improve coverage and manage costs?

3. There’s a benefit for that??

The unbundling of healthcare has reached a pinnacle. There are now more contextual, more personalized approaches to whole-body health that can improve outcomes. Traditional players in the ecosystem will shift from resistance (“I can build it myself!”) and acceptance (“Fine, we’ll include it as part of the offering”) to embracement (“Ok, let’s include it in the plan design”).

Meanwhile, traditional medical or pharmacy benefits are out of touch with everyday people in terms of what drives health. To compete, payers and providers will increasingly offer complementary point solutions ranging from identity-based care delivery to targeted remote monitoring to food delivery.?

The point solution craze may temporarily increase total industry expenditures in the near term, but it has the potential to drive better engagement and outcomes in the long term. Regardless, integrating the plethora of point solutions will drive activity in the coming year, while the leaders will begin focusing on curation and matching.

Will health plans be orchestrators of a vast network or care providers who serve as necessary watch dogs?

4. Go small or go home?

High-premium insurance continues to plague small businesses and the common American. Without access to cost-effective alternatives they may leave the risk pool, and what’s worse, potentially delay the care that they need. Small businesses lack sufficient choice in providing their employees and their families high-quality low-cost health coverage. To this end, some employers will try new funding models and experiment with self-funding or alternative structures to lower their costs in providing medical and pharmacy benefits to employees and families.??

This means that health plans can no longer rely on small businesses to fund their high-premium-based profits or punt their demands for self-insurance or alternative models. Challenger plans have infrastructure ready to deploy to serve these oft-forgotten companies. Large national incumbents have the reach to financially serve this segment, but they do not offer local touch. Regional incumbents will be challenged to sustainably serve this segment, despite their local touch.?

How will plans across the country prepare to serve Main Street???

5. Generation expectation

Traditionalists vs. revolutionaries. Gen X vs. Gen Z. Societal norms vs. you-be-you. Expectations of all aspects of daily living are being redefined. We are seeing a continued interest in holistic care. This trend is infiltrating healthcare, where practices that were once considered alternative are becoming preferred and demanded.?

Care models and pathways will be redesigned to incorporate evidence-based practices that go beyond the 7-minute doctor’s office visit. Acupuncture? Sure. Behavioral health? Given. New definition of primary care? You bet.?

Playing this forward, we will see an evolution in the traditional sense of a medical network. Expect specialists and facilities to be alongside virtual models and digital health solutions. The leading plans will connect care models to benefits and begin experimenting with next-level configurations to meet the needs of both the old guard and the new guard.?

What new expectations will arise in 2023, and how can help plans get ahead of them?

Who will come out ahead?

This next year will be transitional for the healthcare industry. The strength of incumbents’ foundational infrastructure will be tested. A new wave of infrastructure solutions across healthcare is emerging, akin to Shopify for retail, Wheel for health providers, or Stripe for financial services.?

Will the well-capitalized startups of the last three years survive this wave of economic uncertainty? Or will new startups rise to the forefront and start a new era of digital-forward solutions??

I’m looking forward to seeing the answers to these questions emerge over the next 12 months.