Health care in 2024: The patients are not all right

Patients are at the heart of the health care industry. Some patient characteristics have remained negative since the pandemic era while others are getting worse. What does that mean for health care providers and the health insurance industry? A researcher provided some insights during a recent AHIP webinar.

Jared Landis, vice president of research with Advisory Board, gave a look at the state of the health care industry in 2024.

Examining some patient characteristics before the pandemic (2019) and after (2022 and 2023), Landis presented some statistics showing that many patients are worse off. One-third of adults reported symptoms of anxiety and depression in 2022, compared with 11% in 2019. The percentage of kindergarten students covered by MMR vaccines dropped from 95% in 2019 to 93% in 2022 – below herd immunity level. In 2021, 26% of Americans reported they postponed receiving care due to costs, and that percentage rose to 38% in 2022. Aggression is on the rise, with 46% of nurses reporting workplace violence in 2023 as opposed to 22% reporting it in 2021.

The health care report card is poor

In addition, the report card for the U.S. health care system shows poor overall performance, Landis said.

The health care quality outlook is declining. Between 2021 and 2022, there was a 19% increase in adverse events leading to permanent or severe harm or death. The maternal mortality rate rose by 38% between 2021 and 2022. Nearly three-fourths (73%) of adults said they believe the current health care system is not meeting their needs.

Health insurance purchaser and payment policy dynamics are caught up in several factors, Landis said. More than 20 million Americans were disenrolled from Medicaid as of April 2024. Medicare Advantage plan annual revenues are expected to be down by $4.7 billion. Medicare savings from prescription drug price negotiation is expected to save $98.5 billion over the next 10 years. Employer-based health insurance is predicted to see an 8.5% increase in costs in 2024.

Employers are facing cost pressure and new rules for the health insurance they offer their workers in 2024. The annual increase in total health benefit cost per employee for family coverage jumped from 1.1% in 2022 to 6.7% in 2023 and is projected to go up as high as 8.5% for 2024.

In addition, employers find themselves with expanded fiduciary obligations under the Employee Retirement Income Security Act. Employers who self-fund health plans risk fines or class action suits for not living up to fiduciary obligations.

Looking to 2024, Landis said, the big question is whether patients and purchasers are receiving the proper return on investment for the money spent on health care.

He predicted that health care delivery will move away from the hospital-centered model and toward an ecosystem in which care is provided through multiple channels.

Technology won’t replace humans in health care teams, but tech will change the roles of those health care providers, Landis said. Clinician roles will evolve, possibly to the point at which clinicians will complement technology.

What it means for health plans

The state of the health care industry will impact health insurance plans in four ways, Landis said.

2. Health plans will directly feel the impact of purchaser scrutiny. Purchasers will push health plans to strength the value equation (quality + cost) but the specifics will manifest differently across different lines of business. For example, the employer market will focus on cost containment solutions that keep employees satisfied. Medicaid managed care will focus on addressing social determinants of health and reducing health disparities among targeted populations.
3. Market forces will require health plans to diversify beyond their traditional business. Health plans are feeling new stressors on their existing business model. Health plans will respond to changing market dynamics by diversification.
4. Health plans are trying to find effective use cases for artificial intelligence but often ignore the most important one – the workforce challenges. Health plans should engage in workforce development efforts and determine new AI-infused care standards.
5. Innovative treatments will offer health plans an opportunity to set market standards, but only for plans that can offer solutions to emerging financial and management challenges.

Many stakeholders will turn to health plans for answers as the industry searches for a new model in a drug-centric health care delivery system. Health plans that can identify an approach to cost-conscious, clinically appropriate access to care will emerge as winners in the marketplace.

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]. Follow her on X @INNsusan.

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Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected].