HSG’s Value Based Predictions for 2025
This post was co-written by Jason Helgerson, Founder & CEO, and Juliette Price, Chief Solutions Officer.
As we kick off 2025, the tradition of reflecting on the future remains strong. At HSG, we’re excited to share our insights and predictions for the year ahead in VBC. Our lead consultants, Jason Helgerson and Juliette Price, offer their expert perspectives on what to expect in 2025 and beyond.
Jason’s 2025 Predictions
The Trump-Vance Administration will shake up Medicaid. I suspect the new administration will use a mix of budget and administrative actions to do so. FMAP rates are likely to get reduced—at least over time—and states will be given enhanced “flexibility” to live within a world of less federal money. I’m not predicting block grants, but states will be under increased pressure to find savings and innovate. What will be meant by flexibility and innovation? We will see, but the word on the street is that the Trump team is looking for ideas. Most ideas are sent through DOGE, but many will eventually be shared with HHS/CMS. HSG will be watching this very closely.
Combating chronic illness will replace health equity as CMS’s prime directive. This will be the most significant change in policy and messaging in 2025. Look for modifications in all Medicare Alternative Payment Models (APMs) related to this change in focus. It will be interesting to see how HHS/CMS translates President Trump’s desire to combat/reverse chronic illness into tangible policy initiatives.
War on Medicare Advantage may well end. Love it or hate it, Medicare Advantage (MA) covers half of all Medicare members. The Biden-Harris Administration took a dim view of MA and turned the screws on the industry in many ways; I suspect the new administration will take a different view and seek to grow the program, requiring a much softer approach. This will mean less rate compression and more regulatory flexibility. They may also encourage new entrants and provider-owned plans to increase choice and reduce reliance on big insurers. All that said, the anti-insurance company sentiment is palpable. Will that sentiment impact the Trump Administration’s policy direction relative to MA? We will have to wait and see.
Value Based Care will continue at federal and state levels. I don’t see the value train slowing down, in fact I see it accelerating because of an end to the war on MA. Nothing about President Trump’s appointments to date suggests a U-turn on value based care. That said, we still haven’t seen the CMMI appointment, which will be crucial. VBP will also remain a priority for insurers.
Employer health insurance costs are approaching a tipping point. I have predicted this before and been wrong, but we are hearing that employers are braced for double-digit increases in 2025. This will lead to further increases in employee contributions (can they go higher?) and employer insurance dumping. I predict that IHCRA will take off as an alternative as employers seek to turn health insurance cost increases into a “known” as opposed to what it is today… a giant unknown sinkhole of cost. A wild card here will be the enhanced exchange tax credits and their future. Most likely, they will go, but if retained, they could make IHCRA even more attractive to employers.
Juliette’s 2025 Predictions
Smart leaders will not dump health equity initiatives, simply rename them. It was made crystal clear during the early hours of the Trump-Vance Administration that health equity is dead, with clear directives for the agencies to start stripping any programs/approaches to health equity out of current policies and programs. But smart leaders, those who understand that a rising tide does indeed lift all boats, will continue to focus on historically marginalized populations, as they understand that improvements in quality of care and reductions in cost of care are often found in these underserved pockets of the population. A rose by any other name still smells as sweet, right?
Payers will keep shifting risk to providers, but in more ways than just financial. In the aftermath of both the Change Healthcare debacle and the assassination of the United CEO, payers are starting to take a back-seat and put providers more in the line of sight of patients. They’ve already begun shifting cybersecurity risk and coding documentation risk down to providers in a meaningful way we haven’t seen before, and I expect this trend to continue. Providers will need to have eagle eyes when negotiating contracts and understanding their “true risk” in these deals; it’s not just about the shared savings/shared deficits risk anymore. More sophisticated provider groups will catch on fast, but others risk signing deals they may regret.
Value based care will continue to expand internationally, even more rapidly than in the U.S. Many countries around the world are beginning to grapple with health systems with rising costs, even if comparable to the U.S., we would call the growth curve child’s play. These nations are hard-pressed to find solutions that can continue to offer their citizens nationalized health care, and value based models seem to be taking hold as the best solution out of the jam they’re in. These models should be examined by U.S. stakeholders, as they are great models for what we are aiming to achieve by moving the U.S. system into value based models.
2025 still isn’t the year AI becomes intelligent, but it does become useful, for some things anyway. A callback here to my predictions for 2023, and a bit more optimism for 2025. I’m still not convinced that 2025 is the year that AI will become a “game changer” for what ills health care, but I have seen a lot of the over-hyped, under-reflected solutions fade away while smarter, more point-solution AI tools have emerged. Consider the space of diagnosis capture, to accurately record risk scores; this space has seen some truly fantastic tools emerge to help clinicians accurately capture all that ails a patient. I think we’ll continue to see the back-office side of health care adopt AI tools, while the models that are more front-facing continue to face real skepticism and testing.
The chasm of what people are looking for from health care will grow considerably. I’ve been surprised to see the rise of health “influencers” grow, although given RFK’s rapid rise to a potential cabinet position, maybe I shouldn’t be. My algorithms are full of people bragging about taking GLP-1s without a valid reason to, simply for the “life extending” (potential) benefits; weekend treks to London to have full-body scans and myriad blood draws to identify potential “health hacks”; and if I never see another celebrity-backed “nutrition” powder be launched, that would be great. It seems that as the economic inequality divide grows, so too does what the wealthy vs. everyone else seek from the health care system. I predict more providers, hospitals, and health systems will pivot to serve these desires (read: cash those checks); meanwhile, what investments are being made for everyone else? It’s a discussion we ought to be having, but my prediction is we won't, not until it’s too late.
Are you curious to see how these predictions align with your organization’s goals for 2025? Connect with HSG to explore how we can help you navigate the evolving landscape of VBC. Let’s turn these insights into actionable strategies for success—contact us today!
About the Authors: Juliette Price is the Chief Solutions Officer at HSG. Follow her on Twitter and connect with her on LinkedIn. Jason Helgerson is the founder and CEO at HSG. Follow him on Twitter and connect with him on LinkedIn.
