Paul H. Keckley, Ph.D., Managing Editor, The Keckley Report (www.paulkeckley.com)
As Yogi Berra famously said “it’s hard to make predictions about the future.” Applied to the U.S. health system, it’s not so hard in the near term but daunting in the long-term.
The near-term for the industry a.k.a. the next 3-5 years is predictable: Health care marketing and planning professionals in our $4.3 trillion industry can operate with confidence because the industry’s regulatory constraints, financial models and structural restrictions make radical change difficult.
These are the safe bets for the near-term:
· Affordability, price transparency and business practices will be dominant targets of media attention.
· Applied research and treatment processes will follow expansion of artificial intelligence and machine learning applications into personalized therapeutics and technology-enabled self-care advance.
· Federal regulatory policy changes will be the result of executive orders, administrative actions by departments (HHS, VHA, FTC et al) rather than through legislation. States regulations will have increased significance in compliance activities for every health care organization.
· CMS will revamp terms and conditions of its alternative payment programs requiring wider participation and downside financial risk.
· Capital necessary to growth from investors and debt will be more expensive and less accessible. Private investment will play a larger role.
· Demand will shift from hospitals to clinics and home.
· Competitive differentiation will be based on total costs of care, process improvements and user experiences.
· Large employers will expand direct contracting and employee health programs to reduce employee health costs.
Essentially, the near-term for health care is fairly predictable. The partisan stalemate in DC coupled with economic conditions mean changes will be incremental, not transformative. Only a Black Swan event (i.e., pandemic) or surprise election result in 2024 would alter its course.
But in the long-term—8-10 years out—the industry’s future is less predictable for two reasons:
· Competition is expanding bringing outside players with new models and value propositions to untapped or discontented consumers and employers. Some are well-known, some not and all are focused on disruption of the status quo.
· Traditional lag indictors used to forecast supply and demand for health services will have lower predictive value. Lag indicators have failed to adequately capture the impacts of technology-enabled self-care, scope of practice expansion in pharmacies and nursing, inclusion of over-the counter therapies and social determinants in diagnostics and therapeutics, wider acceptance of non-allopathic treatments, the integration of behavioral health and physical medicine in primary
care, changes in health insurance adoption and benefits in the working age population and others.
Thus, long-term strategic plans—partnerships, programs, people, processes and capital requirements et al.—must be built on educated bets about several future state scenarios.
Key questions worth consideration in building strategies for 2021 -2033:
· Will Is the U.S. system to be more government-run or less?
· Will the system’ become a B2C system?
· Will employers create alternatives to the health benefits offered their employees, or exit altogether?
· Will anti-trust and anti-consolidation constraints on health insurers, hospitals and medical groups be relaxed or strengthened?
· Will public health programs be fully integrated with local health delivery systems to enhance accessible preventive and primary care services?
· Will price controls be imposed on hospitals, insurers and drug companies?
· Will consumers bear more financial risk or less?
· Will health policy impose limits on clinical autonomy limitations in the clinical workforce?
· Will for-profit and not-for-profit status matter?
· Will health care spending increases be capped at/near inflation?
· And many others.
For health care marketing and planning professionals, near-term attention must be accompanied by longer-term market surveillance and scenario planning. Old market assumptions are less useful. New assumptions enlightened by lessons from other industries are needed. A good start is Board and C suite discussion about the questions above.
In 1937,social commentators Laura Riding, and Robert Graves opined “The Future ain’t what it used to be!” It’s a timely reminder to U.S. health care.
For continued learning, see the Futurescan and Environment Scan on the SHSMD website.