3 trends transforming the health insurance industry
The health insurance industry has had its fair share of ups and downs since the implementation of the Affordable Care Act--especially as of late, with Republicans attempting to dismantle the ACA with various lawsuits.
Depsite the disruption, and despite overall spending of $2.9 trillion last year, the rate of growth in healthcare spending is at its lowest rate in 50 years.
What's caused this significant transformation? Fortune highlighted three trends that have helped the industry reduce spending growth.
Shift to a retail-focused industry
Over the past few years, the health insurance industry has adopted a more consumer-oriented mindset. Now, it is a true retail industry, noted Fortune. A number of factors contribute to this recent shift. Both public and private exchanges offer plenty of options for consumers. More consumers means an increase in competition among the exchanges, which forces insurers to focus on quality and price in order to snag customers.
Employer-sponsored plans continue to be a controversial provision of the ACA--earlier this month, Republicans on Capitol Hill announced plans to chip away at the employer mandate by redefining the full-time work week as 40 hours. Many groups support this move. At the same time, employers continue to provide their employees with health insurance, and to push for more innovative high-quality, low-cost coverage.
Quality over quantity
As of late, healthcare as a whole is shifting from the traditional fee-for-service model to pay-for-performance methods. This forces insurers to focus on their patient populations. For instance, 40 percent of insurers' reimbursements to providers are for value-based care that improves quality and reduces waste. As insurers and providers both change their payment methods and overall outlooks, the consumers are the ones who ultimately benefit, noted Fortune.
- here's the Fortune article
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