Healthcare Trends to Watch in 2023

Healthcare will continue its evolution toward value-based reimbursement models in 2023 as provider organizations, commercial payers and government programs seek more ways to improve health outcomes while reducing costs.

Implementing value-based care (VBC) in the next year and beyond, however, will require networks to digitize unstructured data, prepare a 360-degree Longitudinal Healthcare Record (LHR) for the patient, and facilitate data sharing on a permissioned basis.Reimbursements and other processes are needed to enable the many-to-many stakeholder relationships between providers, payers, and community-based organizations (CBOs) in a VBC model.

Here are several of the big-picture trends to watch for in 2023:

Bringing care to the patient

Next year we will see the proliferation of alternate care delivery sites, whether it’s in the home, in a retail environment or elsewhere in the community. Major pharmaceutical chains, such as CVS and Walgreens as well as big-box retailers such as Walmart, will open more care sites in retail settings, offering primary care and other services such as vaccinations, testing, and screening for viruses, infections and pregnancies, and treatment for minor illnesses, injuries, and skin conditions.

There will be less emphasis on care in traditional settings such as a doctor’s office or medical center as patients and providers increasingly recognize the ambulatory nature of care. In a way, care delivery is becoming retail-like in terms of where people can obtain it. This trend will help improve health equity by increasing access to care among vulnerable populations, such as the elderly, homebound, and patients living in remote areas.

More direct-to-employer programs

Access to care is impacted by the way employers, patients, and providers each view health benefits. There needs to be an alignment between benefits design and VBC programs.

For example, if you create a VBC program that results in a reduction of choice for the patient, while at the same time you are capitating, or paying a provider entity a fixed amount per patient for a prescribed episode or program, a $5,000- or $10,000-deductible isn’t going to work because the incentives aren’t aligned. The patient is giving up some choice yet has a large deductible, while the provider is at financial risk but still must collect $5,000 or $10,000 from the patient for some procedures.

These financial pressures will result in acceleration of direct to employer plans. Employers will continue to demand more accountability for costs and outcomes. Companies such as Walmart and Morgan Health, the JPMorgan Chase initiative to invest in innovative employer-based benefits plans and programs, aren’t only self-funding, but they’re also providing primary care services in their own facilities. We’ll continue to see attempts to harmonize health benefits with where care is being delivered.

Push for patient engagement

A critical element of VBC is engaging patients in management of their own health. Outcomes are better for providers, payers, and individuals when patients have access to care and to their own health information.

The movement toward taking care out of traditional clinical settings and into the home and community will be a major driver of increased patient engagement in 2023. Patients who struggle to get transportation to a doctor’s office or clinic often become disengaged, failing to make appointments for routine exams and lab tests.

By delivering care into the home or community, healthcare organizations will help patients take a more active role in their care. And while the use of virtual care has declined since the height of the pandemic, in part because people still want to have personal contact with their providers, telehealth will be a permanent part of the care delivery mix in 2023 and beyond.

Capitation catches on

While the fixed monthly per capita amount paid to treat a patient under the capitation model can introduce risk to a provider organization, it also is a source of predictable revenue. In addition, capitated payments can improve payer and provider financial performance by reducing the need for a large internal billing department and shortening time for reimbursement.

These benefits will spur an increase in capitation contracts in 2023, particularly by provider organizations motivated to use data to identify cost and utilization patterns quickly and easily.

More investment in data digitization and interoperability

As the move towards Value-Based Care and Alternative Payment Models gains more momentum, there will be more investment into associated business processes and overhaul of technology infrastructure.To find sustainable success in Value Based Care, we need digitized data and analytics at the individual patient journey level. In order to fully realize the potential of VBC, healthcare organizations need to overcome inertia by transforming their technology infrastructure and processes.

Artificial intelligence technologies, coupled with Machine Learning algorithms in a robust data engineering framework that enables to/from integration between systems with this digitized data, are needed in order to make this transition a reality. Payers, providers, patients, and other healthcare industry stakeholders benefit from moving to a fully digitalized offline-to-online patient journey, opening new opportunities in the R&D of medicines and delivery of healthcare services, while resolving barriers to treatment and improving patient outcomes. In 2023, we will start seeing an increased focus on build/buy/partner type of investments toward technology infrastructure as well as the human capital to make VBC programs a success.

Greater focus on value-based administration

As more payers, providers, and employers implement VBC programs and networks in 2023, there will be growing awareness that value-based administration (VBA) is essential to data sharing and payments across a multistakeholder network.

VBA requires an infrastructure that ensures data can be shared by participants upstream and downstream on a permissioned basis and can accommodate a large variety of evolving, shared-risk reimbursement models that fall under the VBC label, such as Accountable Care Organizations (ACOs), bundled payment programs, and the Medicare Shared Savings Program.

Further, as providers and payers increasingly recognize that Social Determinants of Health (SDoH) play a huge role in health outcomes and healthcare costs, VBC networks in 2023 must continue integrating CBOs that can share SDoH and other data, offer services, and coordinate care. This will be an ongoing challenge because many CBOs have small budgets and have invested little in digital technology.

Most existing payer and provider legacy systems, unfortunately, can’t efficiently administer these types of programs at scale. They lack the ability to manage a complex care network involving multiple stakeholders in multiple roles while fulfilling the requirements of rapidly evolving value-based payment models.

Conclusion

In the new year, provider revenue increasingly will be tied to value-based programs as federal, state, and commercial programs continue the push to reduce costs and improve health outcomes. Alternative care delivery sites will flourish as healthcare consumers demand personalized and convenient service, while leading-edge provider organizations will expand direct-to-employer contracting initiatives. Finally, there will be increased development of programs that align global reimbursement with patient-specific episodic models.

Lynn Carroll is the chief operating officer and Rahul Sharma, chief executive officer, of HSBlox, which assists healthcare stakeholders at the intersection of value-based care and precision health with a secure, information-rich approach to event-based, patient-centric digital healthcare processes – empowering whole health in traditional care settings, the home and in the community.