I want to kick off 2021 by record on the changes we could see in the year ahead. While 2020 was “unprecedented,” with a Democrat-led federal government, I expect a lot to change healthcare. In fact, I’ve come up with 21 digital health predictions about 2021 – and this first set is focused on the broad market themes that will be felt by every player.
That said, here’s the first set of five big changes I’m expecting in 2021:
1. Telehealth is Here to Stay
We’ve seen the dramatic rise of telehealth usage in response to COVID-19. Easily, our clients have spiked at 10-20x daily volumes of telehealth visits over the prior year. Will it last? I think the answer is “yes” and “no.”
THE YES: Telehealth is going to be woven into the care deliver experiences going forward. Quite simply, it’s too useful to completely unwind. The idea that a patient can be triaged anytime, anywhere and that insurance companies, including the government, will pay for it is a lasting change. Telehealth will continue to disrupt the primary care / urgent care market, especially as national providers staff physicians in lower cost areas and circumvent traditional barriers like physician licenses. The quick, cheap, and easy option of finding out if you really need to seek in person care – that’s staying.
THE NO: Telehealth is not going to continue to replace in person visits at the volumes or level today. There are too many ancillary services like labs that provide economic benefit to the hospital and are really impractical for a patient to self-administer.
MY PREDICTION: We’ll see a regional provider achieve national attention – becoming the next household name like the Mayo Clinic – as they leverage a “second opinion” virtual network into building new streams of business from outside of their geographies, thanks to Telehealth.
2. Insurance Market Sees Turbulence
Given the next President thought that the Affordable Care Act was a big… flipping deal, I suspect that expansion of the original principals of Obamacare will return. Unlike the free-market approach of the last four years, the insurance market will be faced with more routine regulations.
These regulations will improve the coverage of care on underinsured at the expense of higher-cost procedures and/or plans. As the Federal government is about 70% of healthcare spend, the private market tends to follow their lead.
These last four years, the Fed has done very little, other than expand alternative treatments via a low-touch FDA. This approach perhaps drove access but didn’t lower costs – rather, drug costs have increased, inviting Congressional oversight hearings. I expect this scrutiny will continue.
MY PREDICTION: Insurance markets will become more regulated, with states re-considering regional insurance markets that failed during Obamacare’s first rollout while prescription drug coverage will become even more of a boutique business, with leveled plans and services coming to augment the super-couponing solutions (like GoodRx).
3. Physician Shortage Worsens
America was already heading to a major gap in needed physicians for purely demographic and aging reasons. AAMC predicts a shortage of up to 500k physicians by 2033. Sadly, I expect that trend to worsen.
Physicians are set to retire at a faster rate post-COVID – 40% of physicians are 55 or older, a segment most severely impacted by COVID. Once the pandemic is over, the financial realities of operating a health-system post-pandemic will require more cost management and early retirements could easily rise.
Additionally, healthcare worker burnout will impact physicians. Staffing issues at hospital are predicted to worsen during future phases of the pandemic and any increase in administration work has a negative effect on physician retention.
Couple that with other models of virtual care, allowing physicians to work remotely and whenever they like, I expect more complications in recruiting and retaining talented physicians this year.
MY PREDICTION: Physician shortages will require health systems and health plans to implement triage systems that move patients to more “self service” models, deriving clinical accuracy from digital tools.
4. Mega-Mergers Awaken
These first three trends – disruptive technology, changing payment models, and a shortage of skilled workers – suggest to me major market consolidation in the healthcare system, health plan, and virtual health delivery spaces.
Quite simply, when there is a business model as large as healthcare delivery getting disrupted, disruption favors size. It is safer to be in a large boat on choppy seas.
I believe the financial pressures of health systems will require former combatants to become best of friends. I think regional health plans will need create larger networks, across state lines, to challenge the dominance of the few, major commercial plans. I believe some smaller virtual health companies will be acquired by systems and plans looking to broaden their competitive moat.
MY PREDICTION: There will be an unlikely merger between a system, a health plan provider, and a telehealth player to create a fully integrated healthcare delivery system that can meet a person’s needs from triage to treatment to in-home pharmacy delivery.
5. Contact Tracing is Here to Stay
While this pandemic is defined today as a single duration, the science suggests that COVID variants will continue to flare up for some unknown amount of time. While I hope the world gets back to some sort of normal this year, I also expect that contact tracing to be part of that norm.
We will spend 2021 (and beyond) needing to understand which specific people were in which specific locations, and for how long. The digitization of the social geography of everyone’s work, school, and play will become routine. In fact, I believe by the end of the year, it will become part of the background of our experience.
Tech giants like Salesforce can leverage data at scale to influence individual’s purchasing behavior. This same technology, thanks to Salesforce’s own Work initiative, can be applied to a multi-dimensional understanding of a person’s interactions.
AI initiatives, like those driving by Microsoft, can map out these interactions and build a picture of risk. As individuals in this network become infected with COVID – or really, any disease, we could visualize individuals’ risk and communicate with them directly with enough data.
MY PREDICTION: We will see a single, unified system akin to a social network that allows us to manage our “health” connections in real time, monitor changes, receive updates, and help us manage our risk.
In summary, the first big predictions I see for 2021 are telehealth as a competitive advantage, new insurance markets, more self-service digital triage tools, megamergers of vertically integrated health delivery models, and multi-dimensional, socially-driven contract tracing.
Is that all?
Well no. In PART TWO, I will look five specific predictions for hospitals for 2021 that fit into these macro trends.
