- What can be anticipated for the healthcare industry of the future?
- What key issues will dominate the healthcare agenda?
- What are the primary opportunities for growth?
About the Podcast
We interviewed Chief Medical Officer at MedSolis, Dr. Jaan Sidorov, in order to gather the latest insights into the healthcare industry. Listen to our audio exclusive here.
About Dr. Jaan Sidorov
Dr. Sidorov is an executive experienced in health care and insurance, with expertise in health reform, medical technology, patient safety, population health and big data.
What can be anticipated for the healthcare industry of the future?
While the U.S. spends more than any other country of health care per capita, the rate of increase (trend) in all developed countries is remarkably the same. All countries will all be struggling with the same three things: scrutiny, accountability and what I call the omega point of the two tier health system:
1) a return to scrutiny over healthcare’s increasing take of every nation’s gross domestic product. That will be thanks to medical care cost inflation outstripping general inflation from a rising demand for medical services versus greater efficiencies in other economic sectors such as transportation and housing;
2) greater accountability, driven government and buyer demands for value and by rising consumer expectations for transparency and outcomes. By the way, this will be paired with a growing willingness among consumers to travel distances and even cross borders for health care;
3) continued evolution toward a two-tier system made up of 1) chronically underfunded public programs that serve as a safety net at one level, and 2) a parallel system that consumers can buy up to through insurance and/or the direct care . As a result, cost shifting by providers will continue.
In your opinion, what key issues will dominate the healthcare agenda?
In the short term, because healthcare is often financed through insurance mechanisms, for politicians and policymakers, it will be the government’s interest in transferring its insurance risk. While much of this can be thought of as cost shifting, I define cost shifting as a provider tool dealing with multiple contracts and revenue streams; risk transfer is an insurance tool that reconciles today’s premiums with mitigating downside exposure.
Risk transfer can go to either:
1) providers (in the form of capitation, bundled payments or global budgets) or to
2) consumers in the form of increased out of pocket costs, fixed cost premium support, vouchers, expenses, penalties and, ultimately, queues.
We should also be aware of three other near-term influencers of medical costs trends in 2016:
1) specialty drugs costs thanks to demand and unit price will continue to go up (examples include hepatitis C meds, oncologics and cholesterol medications),
2) health care institutions will invest in more both information technology personnel and infrastructure to blunt ongoing cyber security attacks;
3) we may get to a critical mass of remote “population health” or “virtual” care offerings outside the bricks and mortar of clinics delivering one-on-one in-person care; it will happen sooner or later, the only question is whether in happens in 2016. We may be getting to a “tipping point” of health advisers “or concierges” who steer consumers to networks as well as efficient or conservative care options.
What are the primary opportunities for growth?
The future is bright: Demography plus wealth combined with a lack of access to healthcare in many countries will overcome government wishes to the contrary. In the developing world, some pharmaceutical and medical technology companies will strive to meet rising demand by opening clinics or by entering the private insurance market.
In developed countries, going outside government programs by offering concierge options or through medical tourism, as well as offering prosthetic devices and medicines that are individualized the special needs of each consumer.
Drilling down a little bit, for health care delivery organizations, growth will mean being smart about risk transfers (minimizing what you don’t know or can’t assess) and by engaging the consumer, by helping them participate in their own care decision-making as well as by providing he right level of service at the right time. This has the additional benefit of creating “customer stickiness.”
Big data plus consumer engagement has the promise of mass customization that will underlie the availability of care outside traditional care: the sweet spot is the use of artificial intelligence-driven protocols paired with traditional care to individualize treatment plans for population-segments based on current patient need and tomorrow’s insurance risk.
Wellness and prevention remain a two-pronged area of interest 1) as efficiencies in other sectors of the economy grow, consumers will have more income to devote to their own well-being and 2) a hope among politicians, policy-makers and employers that investment in wellness will lead to dividends down the line.