In response to a latest publication, final yr was a giant one for payers, with a number of main mergers and acquisitions report from KPMG. This contains CVS Well being's $8 billion buy from Signify Well being and $10.6 billion buy from Oak Avenue Well being, in addition to UnitedHealth Group's $3.3 billion from Optum acquisition from Amedisys. By 2024, payers will change into “more and more necessary within the U.S. healthcare system,” in response to KPMG.

However there are additionally a number of challenges forward, comparable to regulatory pressures on Medicare Benefit and pharmacy profit managers.

Listed here are KPMG's 5 headwinds and 5 tailwinds for payers in 2024:

Tailwind

1. Much less worries a couple of recession: KPMG expects slower financial progress in mid-2024, however it will enhance within the third and fourth quarters with out “a recession and no new Fed charge hikes.”

2. Premium will increase: It’s anticipated that premiums for some policyholders will improve “sharply”.

3. Margin strain: Each massive and small suppliers are anticipated to expertise margin strain. This may result in some being acquired.

4. Asset integration: There’ll possible be a rise in “vertical integrations of acquired provider property,” in response to KPMG.

5. Entry to insurance coverage: As a result of continued excessive employment charges, industrial enrollment is prone to be 'maximised', KPMG mentioned.

Headwind

1. Lending considerations: Rates of interest are prone to stay excessive, making lenders extra cautious.

2. Antitrust Investigation: Federal antitrust enforcement will stay sturdy. This may finish or delay some offers, and improve the price of some offers.

3. Expertise: “High-class technical expertise” can be a problem to recruit and retain.

“Firms that innovate to create superior worker worth propositions can achieve necessary aggressive benefits and create a virtuous cycle of profitable innovation and recruitment,” mentioned KPMG.

4. Medicare Benefit woes: Margin strain is predicted to extend for Medicare Benefit plans. This can be because of slower progress and reimbursement challenges because of growing scrutiny from the Facilities for Medicare and Medicaid Companies. As well as, Cigna just lately agreed to pay $172 million to settle claims that it despatched inaccurate MA diagnostic codes to extend reimbursement.

KPMG added that specialists testified to Congress in October “that whereas some MA plans provide necessary providers not obtainable in conventional Medicare, many seniors have problem navigating greater than 100 choices, a number of problems, and deceptive and even fraudulent advertising.”

5. Crackdown on pharmacy profit managers: KPMG cited a September report from the American Medical Affiliation that discovered vertical and horizontal consolidation of PBMs reduces competitors. This in flip hurts sufferers, self-insured employers, and insurers who don’t work with PBMs.

“Regulators and lawmakers might wish to take a better take a look at the function of PBMs within the drug provide chain,” KPMG mentioned.

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