It is easy to predict that medical groups will continue to merge both vertically and horizontally in 2024. It is easy to predict that health systems will continue to grow. However, as we look beyond these simple predictions, the crystal ball gets a little more confusing. That said, medical group leaders should be on the lookout for these five inevitable trends:
1. Unionization
Unionization will become a big issue and may lead to different approaches to how systems begin to rethink their relationship with their physicians and how they structure their medical enterprise. Given recent high-profile unionization efforts, any health system that is not concerned about potential unionization in its organization is certainly not performing the necessary risk management. We believe that those who are most in tune will do one or more of the following things:
oh Strive to better understand how groups should be managed, paying more attention to your doctors and how your medical business operates. This includes conducting extensive engagement surveys to understand the perspectives of employed physicians and then addressing any critical deficiencies they find.
oh Begin to view your medical business as a solution rather than an underperforming asset or a “loser” in terms of financial performance. Given self-imposed financial structural issues (reallocation of ancillary services, operational and staffing challenges, overhead allocations, etc.), many medical businesses are not structured within systems in a way that leads to the generation of pre-market margin. acquisition. Intelligent systems will understand and embrace this idea as they seek to utilize medical enterprises for their true value: access and care management. It’s time for leaders to wake up and see their investments as part of the solution and not part of their problems. A strong, well-structured medical enterprise should be an important component of any healthcare system’s infrastructure, especially those involved in value.
oh Evaluate various structures to achieve goals, rather than simply seeing employment as the preferred or only solution. We envision an environment where professional services agreements (PSAs) are explored, especially in relation to various specialties that are difficult to operate in a rational and balanced manner (given call requirements, for example). California has decades of experience with the foundation model and has some of the best systems in the country in terms of care and cost management. It is time to learn how their models can be implemented to build systems of care without relying solely on employment.
2. Interrupted switches
Niche players, disruptors and venture capital/private equity firms will face uncertainty in 2024. While we may sometimes think that non-traditional models/organizations have it relatively easy given their niche focus and unique attributes, including market sector for some, also face significant challenges and do not possess an easy-to-administer antidote to healthcare challenges. This year is likely to see continued market exits by some of the more prominent players, given the continued high cost of capital, challenges of scale/securing a large enough market share and other issues. Supplier organizations have significant infrastructure and decades of developing their unique culture. While disruptors hurt, we believe traditional organizations will remain strong, survive and thrive in the long term.
3. Changes in Medicare
Fundamental changes will continue to be addressed, but not resolved, regarding Medicare and, more specifically, Medicare Advantage (MA). There is simply too much noise around AM for there not to be some focus on substantial change. Will the deficiencies be resolved? Certainly not in 2024 or probably even 2025, but we predict there will be increased attention and a real start to changes to address current shortcomings, highlighted by some recent departures of high-profile MA providers. To truly resolve the challenges, payers’ payment methodology, risk adjustment, and payment policy, as well as financing mechanisms, need to be restructured. A great challenge indeed. Once again, we don’t see a complete transformation in 2024, but it sounds enough of an alarm for change to begin.
4. Concierge medicine
Consumerism will continue to push traditional organizations to improve access and service, and one of several solutions will be an expansion of providers involved in concierge models. While many see this as a model only for the wealthy, we believe there will be organizations that will scale up the solutions and offer successful models at reduced costs. This can be seen as a “have versus have not” issue, but given the current challenges with access to care, look for more concierge offerings in 2024.
5. chroniclers
Although it may create a bit of controversy, we predict that a new term for providers will emerge next year. We have seen an expansion of “ists” in recent years, primarily related to hospitalists, such as OB-hospitalists and GI-hospitalists. Is it time to create a different type of “ist” related to chronic care, and do we need a model in which “chronists” focus on clinical care? As we continue to see important models of care dedicated to caring for people with chronic illnesses, is it time to create a new specialty classification for those who provide this approach to care?
The future may be cloudy, but we believe these five trends will manifest over the next year and we urge medical group leaders to focus on them as they develop strategic initiatives to thrive in 2024 and beyond.
Fred Horton, MHA, ([email protected]) is president and Mike Coppola, MBA, ([email protected]) is vice president of AMGA Consulting (amgaconsulting.com).
