Evolution or Extinction

“The Theory of Evolution has two main points,” said Brian Richmond, curator of human origins at the American Museum of Natural History in New York City. “All life on Earth is connected and related to each other,” and this diversity of life is a product of “modifications of populations by natural selection, where some traits were favored in an environment over others,” he said.

This same theory can be applied to current healthcare. A health plan is the sum of various functions that deliver and monitor the beneficiary’s care. The line between payers and providers is becoming more blurred as financial risks and quality measures are critical measures for all healthcare components.

The concept of evolution vs. extinction is quite real. Providers are looking at partnering with payers and taking on more financial risk to leverage the subsequent reward and help coordinate care.  Payers are eager to have more control and visibility with providers as well as to follow beneficiaries through the continuity of care to manage shifts in income, demographics, and clinical needs over a beneficiary’s lifetime.

As Medicare Advantage (MA) continues to cover almost one-third of the eligible population, new product trends are evolving.

Over the past four years, Health Maintenance Organizations (HMOs) dominate the marketplace with managed
care and tighter networks, but the recent duals demonstrations are recognizing demographic shifts as well as states moving to Medicaid expansion and better coordination.

Another predictor of the duals market is the Special Needs Plan’s focus on duals as an at-risk beneficiary. A third driver is the stable Chronic Condition Special Needs Plan (C-SNP) market, which manages the clinical needs and provider partnerships. The Centers for Medicare & Medicaid Services (CMS) is expanding this concept further through the new Value-Based Insurance Design (VBID) demonstration starting in 2017.