Healthcare Services Futures by 2030
Whether we know it or not, we’re all working towards certain “Healthcare Futures” — these are potential scenarios by 2030, for which the seedlings are in place today. Ultimately several of these can come to fruition in some way.
If you had to prioritize one or two over the others, which would you pick and why?
Future #1: “Retail healthcare becomes consumer’s first and easiest option for Gen Millennials and Below”
With deductibles and healthcare costs continuing to rise, the demand for cheaper/easier healthcare grows. Powered by the need to diversifying their growth (e.g., CVS, Walgreens) and The New Tech Stack for Virtual Care (credit @julesyoo), consumer-driven healthcare loses the Pill Mill reputation and becomes a real outlet for high-quality care delivery. The line between traditional healthcare and consumer, blurs (e.g., Ro goes public and buys a regional hospital this decade).
Future #2: “The ACA Exchanges become a source of innovation/experimentation”
The ~25% banner year OEP growth in ’21-’22 was not a blip — it represents broader forces at hand of a new more fluid, independently employed economy. SMBs will find options on the Exchanges (e.g., through ICHRAs), Plans will be designed for specific cohorts of the population (e.g., Gig Workers). Legislation that was once so maligned ends up becoming a bedrock for true competition in the industry. By 2030 the ACA Exchange enrollment triples as a percentage of the current overall individual health insurance market.
Future #3: “EMRs are just data storage — CRMs sit atop and rule, creating a new booming data ecosystem”
With increased transparency and growing healthcare infrastructure options, EMRs lose their stranglehold on power and remain useful as data storage and billing mechanisms. The dual forces of (1) Large hospital systems looking for a new edge/customer relationship, and (2) Big Tech (e.g., Salesforce, Google) looking for an entry into healthcare turn CRMs into the must-have infrastructure piece of this decade. A new era of customer relationships is born.
Future #4: “If it’s possible to do at home, it gets done there, including many procedures”
The Covid-induced boom of healthcare at home was just the beginning — as technology advances, staffing models shift and the reimbursement landscape evolves; the total percent of care delivered in the home rises dramatically. Due to scale challenges of at-home companies, healthcare moats inherently become defined by regional dominance and exclusivity, as companies/systems race to cover a geographic area then grow in share of wallet over time. It becomes common for >50% of Boomers aging in place to choose convenience of the home over branded institutions/facilities.
Future #5: “There’s an App for that! And it’s ok because consumers find it easy to use, not cumbersome”
Underlying healthcare infrastructure changes either due to legislation (e.g., FHIR adoption accelerates to becomes the lingua franca) and/or due to technology (e.g., Apple creates a universal chassis for health IDs and information exchange that actually gets used) — creating a world where the use of point-solutions become seamless for consumers. After passing through the trough of disillusionment, healthcare point solutions finally hit the plateau of productivity. Consumers welcome using 2–3 different apps per year depending on their diagnosis/condition/ailment at the time.
Future #6: “MA becomes 60% of the Medicare enrollment, regardless of the Trust Fund issues”
The debate over risk-adjustment and MA’s staying power comes to a quick close in the early 2020s, and the US Government prints money to stave off impacts of Trust Fund depletion. The fierce competition in MA creates a continued race-to-the-bottom in pricing which ultimately increases value for consumers. SNP plans gain prominence as the new frontier for innovation, and MA plans with long histories in a market become comfortable taking on that kind of SNP risk, as does Wall Street. MA enrollment was ~23% in 2011, ~40% in 2021, and jumps to ~60% by 2030.
Future #7: “Web3 finds its first hooks in healthcare, in a meaningful way”
Healthcare, typically at least 10 years behind modern industry, advances its own infrastructure to support Web3 applications; or else Web3 applications skip past healthcare infrastructure to create their own sub-industry and activity. Web3 finds a home first in financial transactions, then perhaps in limited data use cases, but eventually broadens out to help underpin the complex web of contractual infrastructure that has forever plagued our industry. By the end of the decade, we have our first Health Insurance DAO used by over 1 million people.
Future #8: “The Employer Cost Bubble ‘bursts’ as Employers are willing to make new tradeoffs to reduce cost”
Employers can no longer bear the burden of healthcare costs outweighing key operational ones (e.g., SBUX spending more on healthcare than coffee beans) and as such they make dramatic decisions to change their future: (1) increase in the shift to self-funded at all sizes, (2) decreased willingness-to-pay for wide networks, (3) increase in partnerships for cost-reduction (e.g., Walmart/Cleveland Clinic), (4) rise of “New Payers” (e.g., Transcarent (TBD), Firefly). By 2030, BUCAs share of Employer market drops by 20% as new entrants/solutions take hold.
Future #9: “Fintech x Healthtech become synonymous”
Healthcare, now at ~20%, rises to 25% of US GDP by 2030 and the financial world cannot help but seize this as the ultimate frontier — not just as a core use case but as a core need to help the people. Credit, BNPL and new solutions we haven’t even thought of become much more commonplace at the point-of-sale (e.g., provider, retail, other) or baked into insurance plans. Popular fintech companies today (e.g., Venmo) make strong forays into healthcare. By 2030, a healthcare company we know (e.g., Cedar or Major Hospital system) becomes a bank.
Future #10: “Hospital systems become more massive and also much more distributed”
ASCs procedures increased 47% in 2021 — it turns out this was not a blip. Other than ER as well as some major surgeries and treatments, most hospitals (besides largest AMCs) shift their investments and assets to be outside of the traditional walls. Massive consolidation continues, including the gobbling up of rural hospitals, many of which close and enter bankruptcy; more hospitals go public to fuel this cycle and take advantage of the tax statuses afforded to them. By 2030, HCA’s In Patient revenue decreases by 50%, yet earnings and profit continue to rise.
Future #11: “Value-based care contracts gain teeth, including in specialty”
Roughly 35% of US healthcare dollars flow through a value-based arrangement today, but most of those have little downside. This changes over the course of the decade as data/infrastructure capabilities advance and CMS heavily incentivizes/accelerates it; therefore, the Commercial side finally starts to see VBC adoption. Ultimately, the desperate need to create a profit wedge (for Payers and Providers) drives the necessity of taking downside risk to capture more of the pie. By 2030, 50% of US healthcare dollars flow through VBC with 50% of those having downside risk — 20% of specialty dollars are flowing through VBC contracts.
Future #12: “Startups successfully tackle aging and/or AI breakthroughs occur to vault quality of life forward”
Billions of dollars have been and are being poured into several categories, which begin to come to bear fruit in the back half of the decade: (1) Research to delay aging, (2) Medical and/or generalizable AI to analyze images, make diagnosis or prognosticate health, and (3) Computational biology. Like other entrenched industries, the players remain the same and science saves us from ourselves. By 2030, we make a stepwise function jump in average expected lifespan of a US adult by 3+ years, due to advances in science and technology.
“Future X” > What other futures are there, and how are you working towards them today?
E.g., “Medicaid becomes a source of innovation”, “The Rise of the Independent Practitioner and Business Owner”, “Major Healthcare Legislation Passes on X topic”
FYI, this is simply a copy and paste of content that I put on my Twitter account ( 👇). Check me out there @Rsiddhanti > would always value your feedback!
