When looking back on 2019’s healthcare news stories, the famous expression regarding the forest for the trees comes to mind. Remembering the distinction between the two is important, as focusing too much on the healthcare headlines of the day may result in missing the bigger picture.
This was particularly apparent during the political debates at the end of year 2019, when the topic of funding healthcare dominated the conversation and overshadowed truly compelling developments in the industry that really cannot be reduced to talking points and sound bites.
Of the many highlights from 2019, three in particular regarding Medicare-for-all, surprise medical bills, and social determinants of health (SDoH), were major election-season headlines; while two focused on consolidation in healthcare and transitioning from a series of providers to a platform, were noteworthy advancements that actually promise to shape the healthcare landscape long after the election is over.
Tree #1: Medicare-for-All
The Democratic presidential debates in early 2019 brought Medicare-for-All to the forefront. At the time, the relatively large group of candidates all proposed some version of universal healthcare coverage. The candidates made proposals ranging from replacing all existing third-party payors with a single government payor to incremental expansions of traditional Medicare and Obamacare. It is important to emphasize that these proposals are being made in the context of the run-up to the Democratic primary, where candidates are more likely to advocate for more extreme versions of single-payor so as to earn the party nomination. If history serves as a guide, the eventual nominee is likely to make rhetorical moves toward the center in the context of a general election.
Tree #2: Surprise Medical Bills
Surprise medical bills became a political issue in 2019, following a report the previous summer indicating that over half of Americans reported receiving such a surprise bill in the mail. Typically, surprise medical bills refer to assessments for services rendered in an emergency department that a patient believed were covered by their insurance but were not. Congress responded in 2019 with several pieces of bipartisan legislation aimed at increasing transparency and allowing patients the opportunity to, at a minimum, refuse consultations and treatments that would not be covered. Congressional action here was a winner for both sides of the aisle.
Tree #3: Social Determinants of Health
SDoH became a widely used term in 2019 as a main focus of healthcare initiatives. SDoH are defined as the sum total of an individual’s social and physical environment, health services, and structural and societal factors, all of which impact their health. In 2018, a survey revealed that over 80 percent of payors felt that programs focused on SDoH would support them in meeting their population health goals. Since then, healthcare plans have been experimenting with pilot programs to test this concept. Notably, Medicare Advantage benefits are being expanded to cover elements of SDoH such as safety at home and access to transportation. Because Medicare recipients traditionally represent a large voting bloc in national elections, these developments are well-timed to be in place ahead of the 2020 general election.
The Forest: Consolidation of Healthcare
Beneath the headlines, a major disruption to the healthcare landscape has already taken place, in the form of consolidation of healthcare resources. The process has been building for years, with mergers and acquisitions of hospitals and private practices into much larger entities, leaving only a few major players in every geographical region. By the end of 2019, this process of consolidation was all but complete.
Consolidation is often viewed as a negative transition for the consumer, who in this case is also the patient. Indeed, large, distant healthcare conglomerates seem more removed from patient care, compared to a close family doctor who has developed a personal relationship with the patient and, in some cases, has been providing care since their childhood.
The extent to which this type of patient-doctor dynamic still exists today is a matter of debate. In fact, it can be argued that the wave of mergers and acquisitions was actually driven by patient demands for care that is higher-quality, lower-cost, and closer to home. Many patients today are satisfied with the care they receive from their family doctor; however, are inconvenienced by having to drive into a major city for services such as childbirth or major surgery.
The economies of scale offered by large healthcare consortia have addressed (at least in part) certain long-standing problems in healthcare, including fragmentation of care (more than one doctor managing the same healthcare problem), and the interoperability problem (electronic medical record systems that cannot communicate with one another).
The Forest: From Provider to Platform
This consolidation among healthcare providers has facilitated the emergence of the second major hidden trend in healthcare in 2019: the transformation of healthcare delivery from a series of providers to a platform for delivering a variety of services to patients.
Such transformations from provider to platform have already occurred many times. It is useful to recall that Amazon appeared in 1994 as an online book seller. Today, Amazon is a platform that provides web-based services in a variety of markets from e-commerce to artificial intelligence. The company has done as well as it has not least because this transformation to an e-commerce platform has provided enormous value to customers.
Among Amazon’s assets is their world-class logistics operation that aims to deliver products to every consumer within 24 hours of an order, in some cases on the same day. Americans like having services delivered at home, and the same is true of healthcare. Recent updates to Medicare Advantage plans are now allowing patients, particularly the elderly and those with chronic diseases, to receive the care they need at home.
The healthcare industry is poised to further diversify to provide consumer/patients with a similarly high level of products and services, conveniently and relatively inexpensively. CVS, which began as a chain of pharmacies in Rhode Island, has since branched out, now offering urgent care clinics, and soon, outpatient dialysis units as well. Walmart, the biggest of the big box retailers, announced a major move into healthcare in 2019 and opened its first big health center in Georgia.
2020 is Hindsight
What will the healthcare landscape look like going forward? Regarding Medicare-for-All, the political climate in the US does not appear poised for a major upheaval. The future of the debate is likely to resemble past debates: third-party payors and Medicare will continue to expand coverage and the programs will continue to grow in size and expense.
The trends toward personalized healthcare delivery, increasingly “on-site and near-site”, is likely to continue, not least because the economies of scale available to large healthcare platforms facilitate this type of personalized, patient-centered care.