Health Care Matters | January 3, 2025
Welcome 2025!
We’re excited to kick off 2025 with a look ahead at what’s in store for health care. Don’t miss Raihan Faroqui, MD’s HealthTech 2025 Predictions for insights on the future of the industry. Read the full article here.
Also, check out our latest podcast, linked below, featuring Coral’s reflections on 2024 and hear what we’re watching for in 2025. Here's to a fantastic year ahead, one we hope is filled with innovation, growth, and success. Happy New Year!
Innovating Without Compromising Integration: Considerations For Medicare
HealthAffairs Forefront recently published an article that explores how the CMS PY25 MA and Part D final rule changes, which were intended to benefit dual eligible beneficiaries, may create challenges for integrated care programs, especially Dual Eligible Special Needs Plans (D-SNPs). Key policy updates, such as changes to enrollment periods, prior authorizations, and D-SNP look-alikes, may improve member experience and reduce complexities for patients and providers but could affect states' ability to maintain integrated care. While the PY25 rule is final, there is an opportunity to provide feedback to CMS during the comment period for the PY26 MA and Part D proposed rule, open now.
Why It Matters
As the article states, collaboration between states and the Centers for Medicare & Medicaid Services (CMS) is crucial for successful implementation of these policies. States and CMS share the goal of developing high-quality, integrated care programs for dual eligible individuals, yet most state’s do not have the capacity to closely monitor CMS regulations and achieving the goal of increased collaboration will require a shift in how states engage with CMS. While some states, such as California, have established dedicated offices to provide focused leadership and expertise on innovative models for Medicare beneficiaries, most state teams currently lack the capacity to monitor Medicare regulations. California's work serves as a model for other states to create structures to increase Medicare capacity within state Medicaid agencies. By doing so, states can better engage in the CMS rulemaking process and collaborate with partners to ensure new policies support integrated care programs effectively.
Health care start-ups are trying to open. An old law stands in their way
Health care start-ups are facing significant challenges due to "certificate-of-need" (CON) laws, which require businesses to prove a community need for their services before operating. These laws were originally designed to control health care costs and prevent market oversaturation. However, critics argue that CON laws act as barriers to competition, creating monopolies that benefit established companies while limiting innovation and new entrants. Proponents of CON laws claim they prevent the overextension of resources and maintain stability in an essential sector that is not governed by typical free-market principles. While some states have repealed or scaled back CON requirements, the majority retain them. Some states, like Mississippi and Nebraska, have seen particularly contentious cases involving new entrants trying to establish services such as home health or medical transport businesses. Despite research showing mixed results on the effect of CON laws on costs, the ongoing legal and regulatory battles continue to shape the debate on whether these laws serve or hinder the public interest. Read here.
Why It Matters
CON laws are a double-edged sword for the health care sector because, on one hand, they help prevent the overexpansion of facilities and services, ensuring resources are not spread too thin. This can protect smaller, underfunded hospitals and clinics from being overwhelmed. On the other hand, these laws can create barriers to entry for new providers, stifling competition, driving up costs, and limiting patient access to innovative or improved services. As legal challenges grow and public sentiment shifts, these laws could face significant scrutiny. This may lead to changes that either reduce their scope or replace them with a more open, competitive market, potentially improving efficiency and access to care.
Here are new state healthcare laws taking effect in 2025
ModernHealthcare published a summary of health care laws taking effect in 2025 across various states. Many states are implementing measures to increase health care access, particularly for underserved populations, including extending Medicaid coverage and ensuring insurance coverage for a broader range of services. States are also focusing on reducing disparities in health care, such as providing bias training to reduce maternal mortality among Black women and ensuring access to reproductive health services. Improving mental health is also on the docket for many states, with several states mandating the inclusion of behavioral health professionals in schools and expanding coverage for mental health services. Read here.
Why It Matters
The health care sector in several states will experience shifts in 2025 as these new laws take effect, particularly those centered around reproductive care and insurance coverage, impacting both the day-to-day operations of health care providers and the financial models of insurers.
At the core of this legislative wave is a push to expand access to care —especially reproductive health services—and to reshape the insurance landscape during a time of uncertainty with the new Trump administration. In many states, insurance providers will be required to offer expanded coverage, including fertility services, abortion care, and mental health services. These new mandates will force insurers to reevaluate their policies, adjust pricing structures, and possibly face higher costs due to broader coverage requirements. The way these new laws are implemented will matter greatly, ensuring they have the intended of effects of increasing access to care without shifting the increased cost of that access onto patients.
Where We Are Reading
National Health Expenditures In 2023: Faster Growth As Insurance Coverage and Utilization Increased
This Health Affairs article discusses the growth in national health expenditures in the US for 2023, highlighting the significant growth in health care spending and shifts in insurance coverage and government spending post-pandemic. Read here.
A Roadmap to Better Health in the USA
The Lancet published a presidential briefing book which highlights the urgent health challenges facing the USA, including high disparities and poor life expectancy compared to other high-income nations. It calls for policies that address obesity, chronic disease, and health inequalities, suggesting solutions like strengthening the Affordable Care Act, expanding child tax credits, and maintaining health infrastructure. Read here.
Where We Are Going
The ROI of Resource Navigation: Findings from the Accountable Health Communities Model
Join the Camden Collection at 1pm ET on January 21st for a webinar, “The ROI of resource navigation: Findings from the Accountable Health Communities Model,” which will explore the context of the AHC Model and how it was developed, what implementation looked like on the ground, and implications of the findings for care providers, payers, and policymakers. Register here.
VBC Resources
The Health Care Payment Learning and Action Network (HCPLAN) recently released several resources to support the transition to value-based care.
The HCPLAN’s Accountable Care Action Collaborative released guidance on promising practices for promoting health equity through APMs. Read here.
The Alignment Landscape is a new HCPLAN web-based tool for exploring opportunities and resources for multi-stakeholder alignment across the health care industry. The Landscape provides a “one-stop shop” of alignment initiatives aimed at reducing administrative burden and supporting system-wide transformation across health plans, providers, purchasers, and community organizations. View here.
The HCPLAN’s Health Equity Advisory Team released a new document on social return on investment (ROI), which shows how current health care performance metrics miss the full societal benefits of health equity, including long-term improvements in economic productivity. This new document offers promising practices for increasing social ROI and demonstrates how aligning the metrics of value-based care with broader community outcomes incentivizes health equity and holistic, person-centered care. Read here.