With the end of the Public Health Emergency (PHE), the advent of ChatGPT, and the changing market landscape, 2023 was an unprecedented year for the healthcare industry. 2024 promises to be no different. As the pandemic continues to impact health systems and patient needs, these sectors are poised for significant growth in 2024 and beyond.
Maternal Health
Maternal health is positioned to emerge as a pivotal sector in 2024, driven by a confluence of policy changes, expanded coverage, and innovative models. As of January 2024, 44 states have expanded postpartum coverage through Medicaid from 60 days to 12 months, and three states are planning to implement this expansion. Complimenting this policy momentum is the increasing recognition of the perinatal workforce’s vital role in maternal care. Doula services, recognized for their emotional and practical support during pregnancy and childbirth, are gaining prominence. Eleven states, including New York, now reimburse doula services through Medicaid, setting a precedent for comprehensive care.
Furthermore, in December 2023, CMS introduced the Transforming Maternal Health (TMaH) Model focusing exclusively on improving maternal healthcare for Medicaid and CHIP enrollees. This 10-year model aims to address the whole-person needs during pregnancy, childbirth, and postpartum, emphasizing the importance of all: physical, mental, as well as social needs. Beyond these initiatives, a broader perspective on women’s health as an economic driver is gaining traction. Research underscores the potential to inject at least $1 trillion annually into the global economy by 2040 through improved women’s health.
Behavioral Health
Mental and behavioral health in the United States has become a pressing concern, accentuated by the COVID-19 pandemic, resulting in a surge in demand for services. Before the pandemic, one in five Americans grappled with mental illness. The shortage of mental health professionals, with estimates predicting a deficit of more than 15,000 psychiatrists, psychologists, and social workers by 2050, further exacerbates the situation. Recognizing the severity of the crisis, Medicare took a crucial step in 2023 by allowing marriage and family therapists, and mental health counselors to provide services starting January 2024. This move is especially vital in rural areas where professionals make up over 40% of the licensed mental health workforce. Medicare also expanded benefits such as intensive outpatient care, peer-support services, and mobile crisis services to enhance support for those with severe mental illness.
We witnessed similar focus on mental and behavioral health in Medicaid, one of the examples being North Carolina increasing minimum reimbursement rates for behavioral healthcare to address financial challenges faced by providers treating Medicaid patients.
In 2024, CMS is set to implement the Innovation in Behavioral Health (IBH) Model, targeting Medicaid and Medicare populations with moderate to severe mental health conditions and substance use disorder. The model promotes care integration, management, health equity, and enhanced health information technology to improve outcomes and experiences for individuals with behavioral health conditions.
Preventative Healthcare
Fueled by inflation and financial predictions of increased healthcare costs, the importance of preventative healthcare continues to amplify for all stakeholders including providers, health plans, and employers. Proactive outreach by plans and providers will become paramount in 2024 so that patients do not skip preventative screenings and other recommended procedures.
We also might see more employers offer onsite and near-site wellness centers, making primary care more accessible and averting ER visits and hospital admissions. Simultaneously, the demand for technological advancements, including AI and wearables, that facilitate early warnings and swift interventions is predicted to surge in the year ahead.
Specialty Care
As healthcare costs rise, the industry is looking for innovative solutions that ensure high quality services while reducing the overall cost of care. Specialty care has become an integral part of this endeavor as it drives more than 70% of healthcare expenditures. CMS’s specialty strategy aims to advance initiatives in this area through emphasis on episode-based models, financial incentives for ACOs to actively manage specialty care, and innovations to improve coordination and collaboration between primary and specialty care physicians. The penetration of these value-based care models in areas like orthopedics and nephrology could more than double in the next five years.
It will be interesting to see in 2024 how stakeholders address the challenges of differentiating value among specialists and structuring bundles efficiently, which can further motivate specialty providers to adopt risk-bearing agreements. We might also observe increased investment in technology infrastructure and tools to improve data sharing and utilization, which are necessary to establish high performing specialty networks.
Artificial Intelligence
It seems like just about every industry is talking about the impact of artificial intelligence (AI) and healthcare is no exception. There are many current and potential applications for AI in healthcare. It can be used to build virtual assistants that help answer patient questions, to interpret test results and offer appropriate treatment options, and it can even be used to create data where relevant samples are missing. In 2024, expect the healthcare industry to continue exploring the possibilities of AI in healthcare.
Of course, many stakeholders have raised concerns about AI and its role in sensitive areas like healthcare. The general consensus is that AI is a tool that needs to be wielded by human healthcare professionals. In other words, even if AI is capable of making recommendations, all medical decisions still need to be made by qualified healthcare providers.
Another concern that applies to AI’s role across all industries is the perceived bias in results. Many complaints have surfaced in recent years that AI platforms have been trained on data that is inaccurate, offensive, or culturally biased against certain demographics. To address this, new rules to govern AI will be coming in 2024. The Department of Health and Human Services is introducing guidelines for software developers to disclose how their AI algorithms work, how representative the AI training data is, how they tried to mitigate bias, and how the software was validated. The goal is to provide transparency for health plans and provider groups when they are choosing AI solutions.
