What’s Up for 2018?

So last year I suggested that not much would happen in ACA repeal, and it didn’t with the exception of the individual mandate repeal right at the end of the year.  And I suggested that the individual exchange business would be troubled no matter what, and it has been, with ongoing heavy price increases.  That is going to happen regardless of the mandate.  I believed we would see continued provider consolidation and there was, with no real end in sight.  I also thought there would be little action on drug prices and there wasn’t, although as I also suggested, manufacturers were a little more selective in their price increases.  I thought we would have a recession, but the new administration’s policies seem to be staving that off, indeed we have had an uptick in growth.  I thought health spending growth would be muted but higher than GDP increases–in reality, health spending rises were slower than I thought but still above GDP growth.  My time-tested strategy of keeping projections broad and ambiguous worked well.  So what for 2018?

I suspect consolidation will continue, and we will see most areas of the country dominated by one or two major health systems which combine all types of providers and by a couple of large health plans.  Not a recipe for price or spending control, but I don’t see federal or state regulators having the gumption to really attack the problem.  As cell therapies are approved and their pricing becomes apparent, I anticipate another round of wailing about product prices, but again, not a lot of action.  Congress is talking about addressing Medicaid and Medicare spending but I don’t see that happening with mid-term elections pending.  Medicare may reduce the burden of physician quality reporting, but value-based payments will still be a focus.  More states may begin to adjust Medicaid eligibility so that they are not overwhelmed by the cost.  High-deductible plans will be favored by employers and more employees will end up in them.  There will be greater acknowledgment that “digital” health isn’t doing anything to impact costs or quality.  Tax reform will mean more flow of dollars to start-up and growing health companies.  Tax reform also looks like it actually will boost the economy, so this year I won’t make my regular prediction of a recession.  To the extent that some of that extra money flows into the pockets of average consumers, they may feel a little less pressured by health costs.  I think per capita spending will generally stay muted, in the 3-4% growth range.  And my easiest prediction is that at the end of 2018 I will make another stupid set of projections for the coming year.