Hartford Business Journal

22 Hartford Business Journal • December 22, 2014 www.HartfordBusiness.com Industry Focus E c o n o m i c F o r E c a s t Health Care Watch List Healthcare consolidation, costs; bioscience growth to be focus in 2015 By Greg Bordonaro gbordonaro@HartfordBusiness.com T exas, for-profit hospital operator Tenet Health- care Corp.'s recent deci- sion to pull out of its deals to acquire several Connecticut hospitals will have a huge ripple effect on Connecticut's healthcare industry in 2015. Tenet's decision, done in response to harsh regulatory restrictions placed on its Waterbury Hospital acquisi- tion, leaves Water- bury, Bristol, and St. Mary's hospitals and Eastern Con- necticut Health Network, without a merger partner and in need of cash infusions to remain economically viable long-term. It's not clear if Tenet would reconsider its Con nec t icut deals if regu- lators pulled back on some of their restric- tions. If they're out for good, it creates both an economic and politi- cal problem for the state and policymakers. Regardless, consolidation will be an important theme in 2015 as all Connecticut hospi- tals consider further mergers, acquisitions or affiliations. And even physician prac- tices will be in on the act. Grove Hill Medical Centers and Connecticut Multispe- cialty Group are in the midst of a merger that would create the largest physician-owned medical practice in central Connecticut, adding a major new competitive wrinkle to the market. Healthcare costs will be another important issue. Some employers are likely to face higher premiums as medical costs continue to rise, but insurers and medical providers will be experiment- ing with new payment models as the industry shifts from traditional fee-for-service contracts to value-based/ bundled payments that reward doctors for the qual- ity, rather than quantity of care they deliver. Beyond pro- viders and pay- ers, Connecti- cut's emerging bioscience sec- tor will also gain a lot of attention. With Jackson Laboratory's new Farmington campus com- plete, the next major mile- stone for the state's $1 bil- lion Bioscience Connecticut initiative will be completion of the UConn Health Outpa- tient Pavilion in early 2015. Meantime, New York City- based Icahn School of Med- icine at Mount Sinai will be launching a biomedical research center in Bran- ford next year. The hope is all that research bandwidth can birth major medical breakthroughs and new innovative startups. Meantime, major players within Connecticut's health- care ecosystem—including insurers, hospitals, biosci- ence/pharmaceuticals com- panies—are trying to col- laborate in ways that would make the state an incubator for changing the way health care is delivered and paid for in the United States. New partnerships and joint research efforts are likely to be announced in 2015. n ExpErts cornEr Continued evolution for health insurers in 2015 By Stephen Farrell T he transformation of our health- care system will remain a key item on Connecticut's agenda – as well as the nation's – as we strive to enhance access to care, improve the health of individuals, and help make care more cost effective. According to the recent Con- necticut Health Policy Project report, healthcare spending in Con- necticut reached $30.4 trillion – or $8,653.57 per resi- dent per year in 2009. While the trend may be moderating, the number is still staggeringly high as it impacts our economic growth and development. Innovation, engagement, align- ment and individual health ownership will be instrumental in developing a modernized healthcare system so all Connecticut residents have access to affordable, quality health care that can also have a positive impact on the state economy. As we move towards those goals, here is what we will see in 2015: More value-based collaborations Connecticut's healthcare system needs to continue to shift from one based on volume of care to one that focuses on and rewards quality. More health leaders are recognizing the significance of care, cost and safety aspects of providing the right care at the right time in the right setting. Today, more than $36 billion of Unit- edHealthcare's annual physician and hos- pital reimbursements are tied to account- able care programs, centers of excellence and performance-based programs. The company projects this will reach $65 bil- lion by 2018. In Connecticut, nearly 50 percent of physician practices and almost 70 percent of our hospital partners are in some value-based agreement. In addition to sharing risk and reward between insurers and health- care providers, programs to share risk with individuals should be developed to provide incentives for people to take greater control of their health. More health benefits choices for individuals and businesses Connecticut residents and busi- nesses have a greater number of health benefits options both on and off the Access Health CT insurance market- place. When the state health insurance exchange opened on Nov. 15, new carri- ers were offering plans on the market- place. In addition, private exchanges will continue to provide other options, particularly for businesses, as they shop around for affordable benefits for their employees. More healthcare transparency for consumers With more plans to choose from Continued Greg Bordonaro Stephen Farrell P H O T O | C N N W a t c h L i s t

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