Health Care Megatrends Outlined at Feb. 24 Omenn Lecture

Mar 3, 2014
B. Rose Huber
Woodrow Wilson School

In a public lecture at the Woodrow Wilson School on Feb. 24, Ezekiel Emanuel, a leader in health care policy who helped design the Affordable Care Act (ACA), laid out a list of health care megatrends that he says will dramatically alter American health care by 2025. The lecture, sponsored by the Gilbert Omenn and Martha Darling fund, was part of the Wilson School's Program in Leadership and Governance.

Among the six megatrends discussed, Emanuel, a professor of medical ethics and health policy at University of Pennsylvania, predicted that by 2025, insurance companies will be radically transformed and Americans will see an end to employer-sponsored health care insurance. These changes would benefit the entire work force, Emanuel said, since it will likely result in higher wages for employees and bigger cost savings for employers.

"By 2025, insurance companies will be relics of the past. Providers are instead going to become integrated delivery systems," Emanuel said. "And, if you look at the marketplace, this is already starting to happen."

Emanuel highlighted a few organizations taking such steps toward becoming integrated delivery systems: WellPoint, the largest managed health care for-profit company in the Blue Cross and Blue Shield Association, recently purchased CareMore, a successful integrated delivery system. Similarly, UnitedHealth Group, which serves 70 million individuals nationwide, established a standalone health services subsidiary called Optum. Such strategic moves, Emanuel said, are being driven by competition and downward price pressure.

"What do health insurance buyers care about? Price. Do they care about having the best hospital on that list? Not when it conflicts with price," said Emanuel. "So, some would argue, why not give individuals the freedom to buy insurance through the exchange – not through their employer. Therefore, insurance companies have three options: refuse to change and go out of business, change their business models or transform into integrated delivery systems."

When it comes to employer-provided health care, Emanuel stressed the importance of freedom of choice. He reminded the audience that companies have no legal requirements to offer health insurance, and, that by entering the exchanges, individuals would have more options. 

"If you enter the exchanges, it is standardized, and you can pay what you want," he said. "Your employer can say, 'Here's a health care voucher that is tax deductible.' Workers will get more choices and pay raises."

Throughout the second half of his presentation, Emanuel discussed the future of academic medical centers, a subject of which he is all too well familiar, serving as vice provost for global initiatives and chair of UPenn's Department of Medical Ethics and Health Policy. Again, such centers will transform as research funding continues to be reduced, and patients and payers cannot keep pace with rising health care costs.

"Eighty percent of what they do at academic medical centers can be done in community hospitals or outpatient centers at a lower cost," said Emanuel. "Unless high costs can be lowered, or justified, large academic medical centers will be cut out of narrowing networks and will continue to lose patients."

On the academic side, medical education has not seen a significant reform since 1910. The only changes that have occurred, Emanuel said, has been a move from lectures to smaller groups and simulations. Perhaps more importantly, there exists little emphasis on health systems or policy, and little training is done in population health, quality improvement and management techniques.

"I recommend that we shorten medical school to three years total. We should also shorten residencies and fellowships, depending on specialty," he said. "I predict that by 2025 shorter medical programs and residencies will be common, and medical curriculum will be redesigned to feature digital medicine, population health and management training."

Emanuel outlines the remaining megatrends in his book, "Reinventing American Health Care: How the Affordable Care Act will Improve our Terribly Complex, Blatantly Unjust, Outrageously Expensive, Grossly Inefficient, Error Prone System." He predicts that, by 2025, Americans will see:

  • the end of insurance companies as we know them;
  • the diffusion of VIP care for the chronically and mentally ill;
  • the emergence of digital medicine and closure of hospitals;
  • the end of employer-sponsored health insurance;
  • the end of health care inflation; and
  • the transformation of medical education.

"I'm an optimist," Emanuel concluded. "By 2025, things will be better. There will be growing pains. But overall, the system will be better. Health insurance will be lower in cost and of a higher quality."

From January 2009 to January 2011, Emanuel served as special advisor for health policy to the director of the White House Office of Management and Budget. Since 1997, he has been chair of the Department of Bioethics at The Clinical Center of the National Institutes of Health and a breast oncologist.

Emanuel received his M.D. from Harvard Medical School, his Ph.D. in political philosophy from Harvard University, and his B.A. from Amherst College. Emanuel has written and edited nine books, including "Brothers Emanuel," a memoir about his family and two brothers Rahm, mayor of Chicago, and Ari, a Hollywood super agent, who was the real-life model for the character of Ari Gold on the TV series "Entourage."