December 22, 2014

Over the last few weeks, the Chilmark Research team has combed through their research, read countless reports and thrown their i Ching sticks to

determine what is in store for 2015 and in some case a little beyond that horizon.

As I mentioned in yesterday’s post that reviewed our 2014 predictions, this year we’ll reach a little further in our predictions giving you a baker’s dozen to ponder. Hopefully, these will prove to be more thoughtful and thought-provoking. As always, we welcome your comments and thoughts – especially would like to see/hear some of your own predictions!

Rapid Market Changes Force Out 50% of Healthcare CIOs
Half of today’s healthcare CIOs will move on in next 5 years as their role radically changes from being one focused on supporting large, relatively static systems to the need to orchestrate highly dynamic systems. We see no end in sight to the proliferation of user selected best-of-breed apps to get the job done – orchestration and governance will be key, project management not.

Hospital Alliances shift to ‘Preserve and Extend’ vs ‘Rip and Replace’ as M&A Slows
General slowdown in hospital M&A in ’14 will continue through ’15 with hospitals looking to joint ventures and partnership agreements; this will lead to health IT purchases focusing on layering functionality on top of legacy EHR systems rather than the rip n’ replace we have seen in recent years.

Low Eligible Provider (EP) Attestation for Stage 2 MU (MU2) Forces Major Program Redesign
Hospitals will continue to make steady progress towards MU2 attestation but very low EP attestation rates (<40%) will force a major revision of MU in 2H ’15 as CMS broadens Medicare hardship exceptions and pushes back MU-related payment penalties another year.

One Fifth of all Healthcare Visits will be Virtual
Video-based visits, smartphone apps, and the availability of asynchronous patient data exchange will make 2015 the year of direct to consumer telemedicine. All major payers and large self-insured employers will embrace reimbursement with companies like American Well or MDLive. Large, national HCOs will also get in on the act and begin offering their own, branded solutions.

Provider-driven Care Management Remains Manual and Painstaking
Sadly, the majority of vendor IT solutions remain so immature that spreadsheets, faxes, phones, and copy machines will be the dominant technology enablers for care managers through 2015 and into 2016.

Direct Secure Messaging Expands Greatly and Disappoints Mightily
Message volume grows 30-50% month over month until providers figure out that it mostly adds to information clutter. Primary care physicians and office-based nurses feel pain most acutely.

EHR Vendors Make Further Inroads in Analytics
Tardy with analytic solutions for the market, leading EHR vendors (especially Cerner & Epic) are now aggressively investing and  targeting this opportunity – chalking up wins. By mid 2016, some EHR vendors’ analytics solutions will be on par with best-of breed leading to pricing pressure and consolidation.

Big Bang EHR Go-lives are Over, Market Slows
Most HCOs have chosen their preferred EHR and gone live. Moving forward, HCOs will not tackle PHM in the same manner they did with EHR installs i.e., big bang. Projects will be smaller and slowly scale with experience putting the hurt on many vendors’ balance sheets but the real pain will be felt by EHR consultants/integrators. But everything has a silver lining and change management consultancies will flourish.

Biggest M&A News of the Year – Allscripts Goes Private
Slowing healthcare IT spending will lead to further IT vendor consolidation. Allscripts becomes biggest casualty as population health and overseas sales revenues & bookings are not enough to offset lagging sales from core EHR markets and they are taken private by PE firm.

Forty Percent of ACOs Adopt New “Post-Portal” Tools, but Still Fail to Craft Global Engagement Strategy
Smart care plans, telemonitoring and telehealth programs, custom disease management apps will move past the pilot phase next year at leading healthcare organizations (HCOs). However, even advanced HCOs will trip or skip over forming a broader strategy for patient data mgmt, setup of longitudinal records, and creating a unified experience for the patient. This will result in less than stellar patient experiences and subsequently compromised consumer reviews.

CommonWell Must Scale in 2015 to Survive
Long-awaited technology from RelayHealth moves beyond pilots and CommonWell gains some traction in 2015 via EHR vendors who are a part of this alliance. But it will be critical to future viability that CommonWell scale to a critical mass in specific communities in 2015 or the industry will lose interest. McKesson too will expect revenue results or withdraw support in 2016.

Enrolled Lives Under ACOs Grow, Number of ACOs Does Not
Even with recent proposed Medicare ACO changes, the number of new ACOs formed will be quite limited and increase from ~650 to <700 but the number of enrolled lives under ACO arrangements will continue to grow from ~22M to >27M; this will lead to incremental growth in purchases of health IT solutions to further enhance PHM capabilities by HCOs already engaged in ACO arrangements.

Price Transparency Spreads to 5-7 more States and Begins to Impact all Healthcare Markets
Massachusetts legislated that in 2014 HCOs begin providing pricing information to consumers. While there have been some initial challenges in implementing this legislation, it is taking hold. For millions of consumers, awareness about price, costs, and alternative options will snowball when compounded with newly self-insured status. Implications include smarter selection of services, growth of disruptive models for payment (e.g. Oscar) and services delivery (e.g., retail health, Direct Primary Care, One Medical).

There you have it folks, our predictions for 2015 and beyond.

As these predictions point out, there is no lack of change ahead for this industry, which for us analysts, is what makes our job so engaging. Likewise, I hope that 2015 will be equally engaging for you and look forward to working together to improve the quality of care delivered and ultimately, the patient and provider experience.


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