Medicare: We Found Trend in a Regulated Space

May 23, 2017
A look at expected growth, the industry’s continued pursuit of value and best practices to consider as we enter bid season.
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  • Medicare

Kyle Shayna Article

Plan sponsors take note: there is a wealth of trend information available for the savvy strategist.

According to the Centers for Medicare & Medicaid Services (CMS) 2016 Medicare Trustees report, Medicare premiums and deductibles began to rise in 2016 and are expected to increase each year through 2025. During this period, the anticipated premium for Medicare Part D will increase 73%, from $487 in 2017 to $846 in 2025. Deductibles are expected to follow suit with an increase of 61% during the same timeframe.

This staggering forecast illustrates how health plans – now more than ever – need to capitalize on all cost management strategies just to compete. Plans that get ahead of these trends with cost management programs will be better equipped to gain membership and revenue over the next eight years.

Regulated Business Will Continue to Grow

Though cost-share trends appear bleak, growth is in the regulated business. This is a great opportunity for health plans that can handle the rigor of the regulated business to look to Medicare. Consider these Medicare Advantage estimates:

  • 19 million enrollees in 2016, up 60% from 2010 (this is not an estimate)
  • Continued enrollment growth of 6-8% through 2023
  • Total adjusted prescriptions increase of nearly 6% through 2023
  • Revenue boost of 8-10% through 2023
  • 43% of Medicare beneficiaries will be getting care from Medicare Advantage organizations

Shift from Volume to Value

We are seeing major changes in the healthcare industry to accommodate the realities of American consumers and the influence of regulated business. That starts with the shift from volume to value. Fee for service is shifting to managed care, bundled payments and risk based payments. Risk is being shared and moving from the payers to the providers. Hospital and health system executives believe that they will have some kind of risk-based payment, risk adjustment or alternative risk component by 2020. In this industry climate of give-to-get and shared burden, plans relying on old business models, that do not evolve will find it difficult to compete for new membership.

At Express Scripts, we’re closely monitoring trends around specialty inflation, healthcare consumerism and personalized care.

Here are some additional best practices Medicare plans can employ in combating or capitalizing on trend this bid season:

  • Smart technology use for consumer engagement and usage of data analytics to improve health outcomes: With 70 million people owning some type of wearable device to track health and physical fitness, and smart technology infiltrating the average American’s home, plans need to invest in programs that take advantage of technology already available to most patients. For example, Mango Health gets people more involved in their own health care, and provides incentives and rewards for positive health behaviors in a fun and engaging way.
  • Leverage partnerships to address compliance: Alignment with your delegated services partners, CMS refers to as First Tier, Downstream, and Related (FDR) Entities, promotes a more successful health strategy and efficient investment.
  • Detailed Competitor Benefit analysis allows plans to identify waste, promote differentiators, and strategize around member movement: Tools like preferred cost sharing networks, zero dollar copay, tiered structure and formulary management can assist in managing costs with minimal member impact.
  • 90-day fills and a focus on high touch: Specialty utilization management promotes adherence, improves outcomes, manages cost and lowers administrative burden.

Health Plans reading the trends and staying on the forefront of industry best practices will find themselves well equipped to navigate success with well managed Medicare populations. Express Scripts is expertly prepared to partner with plans pursuing optimal value in the Medicare market.

Author Bio

Rhianna Raatz
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