2017 Federal Health Industry Outlook | Deloitte US has been added to your bookmarks.
2017 Federal Health Industry Outlook
Interview with Dr. Terri Cooper
The federal health landscape may look considerably different in 2017 than it did in 2016, and the sector’s leaders and employees are doing their best to find firm footing on shifting ground. Dr. Terri Cooper, leader of Deloitte Consulting LLP’s Federal Health sector, discusses the opportunities and challenges facing federal health departments, agencies, and centers in the coming year, as they strive to fulfill their mission of providing affordable, accessible, high-quality health care to our nation’s citizens.
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What are the biggest health-related opportunities for the federal government in 2017?
Change is inevitable with any transition to a new Administration and Congress. As of this writing, attempts to repeal and replace the Affordable Care Act (ACA) have stalled; nevertheless, there is potential for policy changes in 2017—most notably to the ACA, Medicare, and Medicaid. Department, agency, and center executives and staff members are waiting to see how the Administration and Congress will reform the ACA and the future of the US health care system. Many people are uncertain about what the future may hold: What will be the impact of new agency heads? How will funding or staffing change? Will programs be altered? What role will states play in developing and implementing health policies?
Amid the uncertainty there also is opportunity, especially around bipartisan initiatives such as the 21st Century Cures Act, the Cancer Moonshot, and the Centers for Disease Control & Prevention’s (CDC’s) new recommendations for prescribing opioid medications for many types of chronic pain in response to the epidemic of overdose deaths.1 All of these initiatives are directed toward a common goal—improving the nation’s health.
The Administration and the 115th Congress have the power to transform the role of the federal government in the US health care system. And, in order to help steady the ground beneath their feet, federal health organizations can leverage clinical and operational advancements in four major areas as they strive to concurrently manage change and achieve their mission.
Data & Technology
The application of technology advancements, data, and analytics is being touted as the missing key to unlock new sources of health care value2 and innovation. Sophisticated data sharing, processing, and mining techniques can support the development of personalized medicines and increase speed to market for new drugs and medical devices. Integrating and analyzing new data types and sources also can be used to flex payments up and down (including incentives) according to provider performance.3 As more data becomes available from connected care sources, analytics should be able to help detect hidden patterns in information and deliver actionable insights. These insights could play a significant role in helping health systems improve costs and quality.4
One of the biggest challenges facing federal, state, and local health care providers is taking the vast quantity of existing and new data and turning it into meaningful information that is readily available in electronic format to all members of a care team. Much of this data resides in silos, which limits information sharing within and across health agencies and departments. This issue becomes acute if organizations are slowed in their response to a pandemic in the care setting or the scientific and vaccine development landscape of government agencies and commercial partners by an inability to collaborate and build off of each other’s discoveries. It is also important to note that, while adoption of digital- and technology-enabled care is increasing, many federal, state, and local health care providers remain on the first digital rung.
Therapeutic Area Transformation
Advancing health care innovation and therapeutic area (TA) transformation are clinical and cost imperatives. Already, robotic surgery, 3D printing, artificial intelligence (AI), implantable devices, and other digital- and technology-enabled innovations that target prevention, monitoring, and treatment are showing potential to improve outcomes and reduce costs. The federal government is spearheading two major initiatives that hold tremendous promise for TA transformation:
- The 21st Century Cures Act became law in December 2016, and provides $4.8 billion in funding for the National Institutes of Health (NIH) and key initiatives focused on precision medicine, cancer, and Alzheimer’s research. The regulation facilitates collaborative research and extends the National Center for Advancing Translational Sciences’ (NCATS’) ability to support clinical trials through Phase IIb (previously IIa). The regulation also calls for innovation to the drug and development process—directing the Food & Drug Administration (FDA) to:
- Establish a review pathway for biomarkers
- Provide guidance on the use of patient-generated data in drug development
- Evaluate real-world evidence (RWE) for the approval of new indications
- Create a breakthrough pathway for devices
- Allow accelerated approval for regenerative medicine products5
- The 2016 National Cancer Moonshot initiative provided an opportunity to modify the nation’s approach to preventing, detecting, treating, and curing cancer. It also provided an opportunity to maximize scientific, analytical, and multidisciplinary collaborative advancements to double our rate of progress over the next five years.6 Deloitte was inspired by the Cancer Moonshot and is helping the XPRIZE Foundation to envision and execute a Cancer XPRIZE that will inspire teams to develop early-diagnosis cancer screening solutions. These solutions will provide rapid, accurate, and affordable screenings for early cancer detection where intervention can reduce human suffering globally.7
Public Population Health
The federal government is among the US health care stakeholders promoting the shift from an episodic, transaction-based treatment model of health care to one that is focused on prevention and the overall holistic health of populations. Case in point, the Precision Medicine Initiative is focused on bringing precision medicine to all areas of health and health care on a large scale, with an initial goal of expanding precision medicine in the area of cancer research. President Obama’s budget for fiscal year 2016 included $216 million in funding for the initiative for the NIH, the National Cancer Institute (NCI, the NIH institute focused on cancer research), and the FDA.8 The NIH plans to launch a study involving a group (cohort) of at least one million volunteers from around the country. Participants will provide genetic data, biological samples, and other information about their health. The data will be used by researchers to study a wide range of diseases, with the goals of better predicting disease risk, understanding how diseases occur, and finding improved diagnosis and treatment strategies.9
There is general recognition at a government policy level that a population health approach is required to bend the cost curve on health expenditures. Reimagining and reconfiguring economic incentives so that health care organizations are rewarded for doing the right thing at the right time to support their patients’ health remains an important focus. This also is important given health care’s movement toward risk-sharing and outcome- and value-based payment programs.
Military & Veterans
The 373,000 individuals10 at VA who provide health care, benefits, and memorial services to the more than 8.9 million enrollees in the VA Health Care System11 may have a head start on their federal health peers when it comes to managing change. Since 2014, VA has been undergoing an organizational and operational transformation to modernize its culture, processes, and capabilities.12 Recognizing that there is no “one” veteran, the VA is working to deepen its understanding of what barriers and concerns veterans are facing. This includes looking at veterans more holistically, both inside and outside of the health care system. Using this information as a guide, VA is organizing and planning better care experiences for veterans.13
The VA faces many of the same clinical and cost issues as the private health care sector14
The terminology and the way that veterans interact with the VA health care system are different than their counterparts in the general US population.15 But what may be common to both are the outcomes that each is looking for: high quality care at the right time in the right place.
What health care trend do you see disrupting federal health ‘business as usual’ in the coming year?
In addition to potential changes to the ACA and Medicaid, we see the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) as potentially disrupting business as usual in 2017 for federal health entities and the wider US health care system.
MACRA implementation: The first performance reporting period under the MACRA payment law began January 1, 2017.16 Disruptive by design, MACRA is intended to drive major health care payment and delivery system reform for clinicians, health systems, Medicare, and other government and commercial payers. The law establishes a path toward a new payment system that will more closely align reimbursement with quality and outcomes, and is expected to accelerate the adoption of value-based care (VBC). MACRA has broad support, so it is expected to move forward as scheduled.
What are some innovative actions federal health organizations could adopt to meet mission objectives more efficiently?
Federal health organizations and other health system stakeholders must look at health care differently in order to speed the process of “bench-to-bedside.” Likewise, new approaches to health care delivery are necessary as health care overall continues to evolve. All of this leads to developing innovative strategies to more effectively:
- Evaluate the science
- Disseminate research
- Train the workforce
- Engage consumers
- Improve stakeholder connectedness and collaboration
- Use advanced technologies and analytics to generate evidence and inform decision-making17
Data & Technology: One needs to look no farther than the rise of the federal and state insurance exchanges and digitally-enabled virtual care—online, telehealth, mobile health (mHealth), wearable and implantable patient monitoring devices, and other clinical advancements—to understand the importance of using data and technology to enable effective consumer/patient engagement in health care.18 Patient engagement is crucial for achieving a sustainable and cost-effective public and private health system. And effective engagement is dependent in part on health literacy and consumers having the appropriate knowledge and confidence to evaluate and navigate the health care system.19 Federal health organizations could make extensive use of health information technology (HIT) solutions, social media platforms, and performance analytics to help consumers improve decision-making, health behaviors, self-care, and treatment compliance.
Therapeutic Area Transformation: Treatments, commercial models, R&D, regulation, data integration, devices, support systems, and payer systems are all rapidly evolving. As this transformation takes place, it is critical to bring together the capabilities, experience, and ecosystems to work together, innovate, and collaborate in the effort to find a cure. To do this, it will be critical to apply innovative technologies and analytics as mechanisms for improving the quality of care, enable access to cutting-edge treatments and clinical trials for all patients, and reduce disparities in care. It also will be important to think about therapeutic areas differently through innovations such as:
- Cognitive technology to complement human intervention in identifying leading treatment options for patients
- Clinical trial matching to help find the right clinical trials for patients
- Ecosystem network development and tools to enable data sharing and access across providers
- Informatics and data access to support and enable research efforts
- Crowdsourcing to tap into on-demand insights, rapid prototyping, and an open talent model
- Value-based care (VBC) and payment models to enhance adoption of tomorrow’s cures today
- Precision medicine to target treatment to positively responding patients and reduce adverse events
- Translational medicine to connect discovery, development, and delivery processes in the R&D value chain20
Public Population Health: Increased partnering among all health care stakeholders—including consumers—is one way to move the needle, especially in the area of public population health and wellness. The Million Hearts® initiative is a good example. A national initiative launched by the Department of Health and Human Services (HHS), Million Hearts brings together communities, health systems, nonprofit organizations, federal agencies, and private-sector partners from across the country in an effort to prevent heart disease and stroke, two of the leading causes of death in the US. The initiative aims to prevent heart disease and stroke by:
- Improving access to quality and effective care
- Improving the quality of care through appropriate aspirin therapy, blood pressure control, cholesterol management, and smoking cessation (ABCS)
- Focusing clinical attention on the prevention of heart attack and stroke
- Activating the public to lead a heart-healthy lifestyle
- Improving prescription adherence to appropriate medications21
Military & Veterans: Some of the VA’s innovative initiatives may serve as models. Its integrated provider-payer system allows for more fluid data flow. The VA also has access to social services—including housing—that have important impacts on veterans’ lives. It has also made progress in telehealth with home telehealth devices to monitor and coordinate veteran care. The VA made early investments and a commitment to increasing access to specialists, including mental health care as part of primary care, and leading in-home monitoring that can help veterans to live independently longer.22 23
Change brings uncertainty but it also brings opportunity. We are excited about the amazing work and innovation taking place in federal health and are looking forward to 2017 and continued advancements in data & technology, therapeutic area transformation, population health, and military and veterans services.
2 2016 Global health care outlook: Battling costs while improving care, Deloitte, 2016
4 Health system analytics: The missing key to unlock value-based care, Deloitte Center for Health Solutions, 2015
10 https://www.fedscope.opm.gov/ibmcognos/cgi-bin/cognosisapi.dll, Fedscope Employment Data, VA Labor Category 2210, September 2016
14 Health Care Current: April 19, 2016
16 MACRA: Disrupting the health care system at every level, Deloitte Center for Health Solutions, 2016
17 “Collaboration and innovation: Ending the 17-year ‘valley of death’ in getting treatments to patients,” Health Care Current, Deloitte Center for Health Solutions, September 29, 2015, http://www2.deloitte.com/us/en/pages/life-sciences-and-health-care/articles/health-care-current-september29-2015.html?id=us:em:na:hcc:eng:lshc:092915#1. Accessed December 30, 2016
18 Health care consumer engagement: No “one-size-fits-all” approach: Trends in consumers’ use of online resources and health technologies from the Deloitte Center for Health Solutions Survey of US Health Care Consumers, 2008–2015, Deloitte, 2016
19 Vital Signs: How to deliver better health care across Europe, Deloitte UK Centre for Health Solutions, July 2016
Leveraging advancements in four major areas will enable leaders of federal health agencies, departments, and centers to turn challenges into opportunities and achieve their mission, as well as clinical and financial goals: translational medicine, data & technology, public population health, and military & veterans.
Discover more 2017 Industry Outlooks
In today’s rapidly evolving marketplace environment, key business issues are converging with impacts felt across multiple industry sectors. What are the key trends, challenges, and opportunities that may affect your business and influence your strategy? Look for more perspectives and insights from some of Deloitte’s forward thinkers.