A well-known healthcare futurist on Tuesday told the Healthcare Financial Management Association to expect changes in the expectations of employers and employees, a larger emphasis on value, and increased consolidation in the coming decade.
Imagining the future of an industry as large as the healthcare industry is no small task. But in an era when almost everything about healthcare delivery is changing, asking big questions has become something of a necessity for the industry’s financial officers.
Healthcare futurist Ian Morrison, PhD, led Tuesday’s keynote session at the Healthcare Financial Management Association’s 2015 National Institute in Orlando. He was there to offer his best guesses as to what the next decade and beyond will bring to the US healthcare system. Since so much of that future will impact the economics of healthcare, he was joined on stage by HFMI President and CEO Joseph J. Fifer, FHFMA, CPA.
Much of Morrison’s talk focused on trends we are already seeing: so-called “Millennials” are beginning to dominate the work force, and as they do, they’re bringing different expectations than previous generations of workers.
Morrison summed up those expectations this way: “They have a very different set of attitudes. They’re looking for a cross between the Peace Corps and Goldman Sachs. They want meaning in life and they want to be well-compensated.”
Morrison earned laughs for that remark, but he wasn’t kidding. He said employers will need to find ways to offer employees both attractive compensation and meaningful work, rather than one or the other.
While Millennials dominate the workforce, Baby Boomers will dominate the patient population for some time to come. Morrison noted that 5% of the population tends to rack up about 50% of the nation’s healthcare costs.
Fifer said that statistic is primarily driven by people with chronic conditions.
“We have to figure out how to take care of those patients more efficiently,” he said.
Morrison and Fifer also discussed the shift toward value-based care, which has been a theme of the entire conference. To illustrate the problem in the US, Morrison put up a chart showing that the US federal government pays more per capita on healthcare than any other country, including countries with single-payer government-run systems. Yet, that’s only half the picture, because the US also has trillions of dollars worth of private healthcare spending on top of that.
Morrison said he is a dual citizen of the US and UK, and also lived in Canada. He said, colorfully, that no country has healthcare figured out.
“Every health system around the world sucks in its own unique way,” Morrison said. “But I would submit that we probably have amongst the worst value because we spend so much more.”
One area of focus for value-oriented providers has been increasing transparency in order to allow market forces to help drive down healthcare costs. That effort has been driven largely by payers and increasingly by consumers. But Fifer said providers must also embrace the shift.
“This transparency train has left the station,” he said. “We as an industry have to decide whether we want to get on board and do it the right way or let others do it for us. I don’t think we’ll like the other alternative.”
He said transparency will also help foster trust between consumers and providers.
More broadly, Morrison pointed to 2 potential shifts he believes will materialize in the next decade.
First, he said more and more employers are thinking about getting out of the healthcare business, even if that means paying penalties.
Second, Morrison said he expects the healthcare industry to increasingly be dominated by large regional healthcare networks.
“My sense is that in terms of the delivery system, this is still a local and regional play,” Morrison said. “And the dominant players of the future are going to be… 200 large regional integrated systems. Maybe they’re 40% of healthcare today. They’re probably going to be 60% or 80% in 10 years.”
Fifer said he expects many smaller community hospitals will be repurposed or reimagined, rather than closed completely.