Health Care Forecasts Look Hopeful for 2021 After Unpredictable Year

If there was one trend of 2020 in the health care industry, it was uncertainty. This uncertainty was so pervasive and demanded so much attention and agility on the part of providers, plans, and the population at large, that there was not much time to reflect on anything as it was happening. Even though we are in the midst of another COVID-19 surge, there does appear to be a path forward, however, which will codify some of the lessons we have managed to learn from this past year.

Given some hindsight to 2020, we have noticed some pain points that will need to be addressed going forward in 2021, largely from health care organizations providing expanded digital services to account for a remote workforce. Cloud-based data management will need to dominate the space as opposed to antiquated manual systems, and new modes of care including telehealth and remote behavioral health will continue to see an expanded role in the health care landscape. 

On the plan front, the Affordable Care Act (ACA)may be less under threat in a new Biden Administration committed to its upholding and expansion—despite pending court cases—and with recent referenda like California’s Proposition 22 coupled with a surging unemployment crisis, it appears that the number of citizens who rely on government-based health care will continue to rise. The industry will need to work to meet this demand through expanded networks of Medicare, Medicare Advantage, Medicaid expansion, and other similar plans. What the health care industry looks like going into 2021 may be shifting to meet these new demands going into 2022.

Given an increased drive toward telehealth, an uptick in behavioral health needs, and a rise in unemployment driving more members to managed Medicaid and related government-based programs, all under the backdrop of a population that continues to age into Medicare at a rate of 11,000 people per day, the need to drive efficiencies, remove manual work, and bend the administrative curve is more important than ever. 

Breaking Digital Barriers 

One major revelation of the COVID-19 crisis was how unprepared multiple economic sectors were to accommodate for a remote workforce; and health care was no exception. It’s been said that digital strategies were forced to evolve 6 years in a matter of 6 months. For an industry like health care that still relies on paper records and outmoded, in-person administrative work, a shift to a more cloud-based data infrastructure became imperative to keeping operations running. 

As the population struggled with unstable employment in the midst of a pandemic, it quickly became clear that health care organizations would need to be more communicative and agile, translating constantly evolving government guidelines and transmitting that impact to providers and patients as quickly as possible. This increased demand for servicing and purchasing online meant a further data migration to the cloud, putting provider and patient information in front of plan stakeholders so they could make critical decisions in near real time. 

The digital revolution did not just impact how plans were administered, but how care was delivered as well. With close contact being the main transmission point for COVID-19, new methods of care in telehealth expanded exponentially in 2020. And it’s a trend that does not appear to be going anywhere. According to one report, 83% of patients expect to continue to use telemedicine after the pandemic resolves. 

Likewise, the pandemic resulted in renewed calls for behavioral and mental health services to be more pervasive as isolation and uncertainty created an overall feeling of anxiety in the population. With nearly 40% of Americans reporting some form of mental health or substance abuse issue, access to behavioral health services will need to expand to meet these needs; in a way, the mental health repercussions of the pandemic are a shadow pandemic in and of themselves and may linger well into 2021 and beyond. 

Building for the Future 

There was a sense of suspended animation within the health care industry throughout 2020. Health care organizations were focused on the immediate need of COVID-19 relief, and the presidential election made the long-term prospects of the ACA hard to predict and difficult to plan for. In the wake of the 2020 election, with an administration that has expressed a commitment to expanding the ACA, new demands on the system will continue to drive enhancements to the law. 

This presumed sense of clarity surrounding government health plans is additionally coinciding with conditions that may require more Americans to migrate to some form of government programs health care. Two of these main mitigating factors are an unemployment rate above seven percent (though that number is projected to drop to above five percent by the end of 2021) which is causing a number of previously insured workers to lose their employer-based coverage, in addition to a growth in the gig economy sector. 

The latter of these trends is made increasingly relevant to the necessity of state-run health care options in light of Proposition 22 in California, which may very well serve as a bellwether for similar legislation nationwide. Ostensibly, the resolution states that app-based transportation companies (e.g. Uber and Lyft) aren’t required to provide benefits to their drivers as independent contractors. With about 40% of the workforce in gig economy jobs—a number that’s expected to grow in coming years—there will be a push to expand access to health care to workers without employer-based coverage. 

The confluence of these two circumstances will surely impact health care in 2021, especially as plans are being developed for 2022 and 2023. To meet this increased demand in the market, health care organizations may look to expand their networks in Medicare, Medicare Advantage, Medicaid, and Medicaid managed care. Some of these plans will be developed from scratch, while others will represent health care organizations taking more advanced prospective views of the markets in which they are currently operating, and expanding to meet newfound demand.

The COVID-19 pandemic sharpened the focus of existing issues in health care, specifically social determinants like poverty, race, and education disparities that put specific population groups at greater risk during health crises. Going forward, the government plans, especially those in Medicaid, will need to further accommodate for at-risk groups, including in-home services, ensuring safe living conditions, and partnerships with food banks, community organizations, and religious organizations all in service of creating a wider safety net for those in need.

The health plans administering these government-based programs will need to manage them closely, which can mean instituting vital system upgrades to ensure that administration costs do not outweigh the cost of providing services. Sharing data, removing administrative fees, and managing scalability will all be necessary considerations when building out these programs. 

While 2021 is sure to pose additional challenges to an industry just getting its bearings after a wildly unpredictable year—including the mass distribution of a COVID-19 vaccine—with some of the uncertainty settled by the presidential election, 2021 should offer a less tumultuous outlook. Health care organizations that embrace change and express a willingness to adapt will be rewarded in the coming year and beyond.