Future of Healthcare

If there is anything that people should pay attention to before midterm elections, it’s healthcare. Politics aside, we are seeing major disruption beginning to happen. Amazon/Berkshire Hathaway/JP Morgan are coming up with a plan to provide easier access to their employees; Google is starting to get its footing in healthcare, Apple is doing the same, Uber/Lyft are trying to make it easier for their customers to get to the doctor. You also have Oscar Health, which is trying to disrupt the health insurance market, which needs to be improved soon. While I don’t know if these disruptions will be successful, I see a clear trend. Big companies are taking it into their hands to change healthcare because they are getting impatient with the government and its politics (also because healthcare is a $3 trillion business). When people rely on hospitals, insurers, and pharmaceuticals to change healthcare they are not going to see much change because these stakeholders don’t want to do anything that will hurt their income.

               I’m going to focus on each “sector” of healthcare and delve deep into what the problems these sectors are facing, and who can help. This is all tentative but based off of research.


  • One big problem that we are facing is the closure of hospitals in rural areas. The wage index is lower for these hospitals, and so it’s becoming harder to keep these hospitals open and serve people.

    • What happens is that the Medicare wage index reimburses hospitals based on market conditions, such as the local cost of living and hospital wage rates. Hospitals in rural areas tend to receive lower wages than those in urban and city-like neighborhoods. The fairness of this wage index has already lead to 82 closures of rural hospitals, although this statistic was taken back in January of this past year.

  • Billing is another huge problem facing hospitals. Hospitals are billing, billing, and billing patient’s outrageous amounts of money.

    • Kaiser Health News did an article a couple of months ago about a hospital asking patients to pay back their costs by signing a loan with a bank. Usually, what these patients pay with insurance is less than what the hospital is asking them to pay with the loan because the insurers are usually able to negotiate a lower price with hospitals. In this case, hospitals can have the power and charge patients the full price.

  • Lastly, the government is cutting Medicare payments to hospitals. 1.6 Billion Dollars to be exact.

    • Hospitals are the largest employers in the U.S. so cutting payments means less money for hospitals, so we are going to see hospitals kick patients to the curb sooner or start firing physicians in areas that are deemed “not profitable” (i.e., urology).

  • With all of the vertical mergers that are happening in healthcare, large hospital chains are beginning to swallow up smaller hospitals or other healthcare service centers (i.e., radiology centers).

    • What happens is that these chains have more power in these areas and can force the hospitals and centers that it swallows to charge its prices, which are often higher. Those places that are not swallowed by the chain often have a hard time staying afloat. Hospital consolidation has been happening since 2009, but the public has recently started to protest against this.

The Future of Hospitals

  • The American Hospital Association (AHA) has such a huge presence on The Hill that it will be very hard to pass a bill that prevents hospitals from overbilling.

  • However, CMS recently release its rural health strategy. It tries to increase access to telehealth and reduce regulatory burden but does not address the unequal wage index. I would not be surprised if we see more rural health closures à greater health disparities.

  • Speaking of telehealth, expect it to be a big part of healthcare in the next couple of years. Google and Apple are leaping into the healthcare market, and with their technology expertise, I wouldn’t be surprised to see them as leaders of telehealth. However, interoperability and security of telehealth will be two issues they need to tackle before we see telehealth take off.

  • Expect more consolidations. As long as mergers are happening, expect consolidations to grow and that hospitals will begin to cut off some departments.

  • If Dems take back Congress, then maybe we would see a slight reduction in the Medicare payment cuts. It’s hard to predict politics because you never know if/when something will change.


  • Physicians are getting a lot of heat right now. Patients are getting overcharged on so many items, that some even go into near bankruptcy after a major health scare.

  • Tech companies are experimenting with AI, but Google says that AI won’t replace with your doctor.

  • But you might not have a primary care physician in the future since primary care physicians are on the decline. Multiple factors play into this, such as income decline, the changing physician-patient relationship, and a decrease in graduates applying to primary care programs.

  • Be on the lookout for a decrease of physicians accepting Medicaid because the reimbursements are close to nothing. Even with Medicaid expansion, physicians aren’t obligated to accept those with Medicaid.

The Future of Physicians

  • Most likely will see a decrease in primary care physicians.

  • Keep an eye out on Google and Apple to see what they can do with AI.

  • Telehealth will be huge for physicians, especially for communities in rural areas. But don’t expect an immediate impact.

  • Physicians themselves are often clueless about the real costs of their examinations, but sometimes they do know.

  • What medical schools should focus on is educating physicians to be advocates for their patients. Patients and physicians can work together in the future to decrease costs

  • Expect the physician-patient relationship to change.

  • Telehealth will influence it as well, and patients will become more empowered with the use of the Internet (i.e., googling their symptoms). Patients will also expect more out of their doctors, and educated patients may also question their doctors’ choices


  • Because the individual mandate was repealed, we are going to see ACA premiums increase.

    • CBO predicts that premiums will increase by about 10 percent in 2019.

  • Protection for pre-existing conditions is not a partisan issue, and it is the number one aspect of the ACA that Congress still wants to keep.

  • Unless you live in Minnesota, Alaska, or Oregon, expect your health insurance premiums/deductibles to grow because these three states have federally approved reinsurance programs.

    • These programs protect insurers by offsetting the high costs of some individuals.

  • Association health care plans are also a go. That means that small businesses can get together and enroll in a plan together, with the hope of lower costs.

    • However, the concern is that these plans did happen before and there were massive fraud and regulatory issues. Additionally, healthy young people are most likely to enroll in these plans, so that means the sicker and older are going to stay in the ACA marketplace a higher costs for these folks because they are going to cost more.

  • Insurers are the middlemen, and many stakeholders dislike middlemen these days. There’s a lack of choice and high cost when it comes to insurance.

  • There have been some huge vertical mergers happening. CVS-Humana, CVS Health-Aetna, and Cigna-Express Scripts. All are trying to make healthcare easier to navigate and decrease costs.

    • When these mergers are approved, then the smaller insurance companies are going to have a hard time negotiating costs since these mergers will have a huge influence.

The Future of Insurers

  • Keep an eye out for Oscar Health. It’s disrupting the health insurance company by utilizing technology and transparency to get customers.

  • Oscar is expanding to Florida, Michigan, and Arizona in addition to the six other states it currently is in. It’s received mixed reviews, but it’s a step in the right direction for health insurance companies.

  • Lowe’s, Boeing, and Walmart are directly negotiating prices with hospitals for care for their employees.

    • They are skipping the middlemen, which are insurance companies in this case, and going straight to the source. I wouldn’t be surprised if more companies follow them.

  • Follow the mergers!! I think they should all be approved since they are vertical mergers, but it’ll be interesting to see how they affect the industry. Will they work, or won’t they? Only time will tell.

  • Atul Gawande, the newly-appointed CEO of the Amazon/JP Morgan/Berkshire Hathaway merger, says that he wants to get rid of the middlemen. If this merger works and they do end up sharing their knowledge, then insurance companies are going to be in big trouble because they thrive off of no knowledge.

  • Keep an eye to see whether insurers will continue to stay in the ACA exchange. I’m not sure how many more parts of the ACA are going to be repealed, but I’m sure that insurance companies are keeping a close eye on the exchanges and how participating in them will affect their prices.


  • If there is one item that everybody can agree on it is that people want transparency from the pharmaceutical sector.

    • They want to know how much profit these companies are pocketing while charging extremely high prices and jacking up old ones (i.e., the whole EpiPen fiasco).

  • Secretary Azar just recently released a plan to revamp Medicare Part B drugs that the pharma industry hates because now we will only be paying 126 percent of what countries are pay for drugs as compared to 180 percent.

  • Drug reimportation is getting traction again. High drug costs mean that people are often turning to Canada and Europe to get their drugs at a lower price.

    • Politics says that this legislation will not get passed anytime soon.

  • Pharmacy benefit managers (PBM) are getting a lot of heat these days. They are the middlemen between insurers and pharmaceutical companies.

    • People don't like them because they believe that they raise the price so that they can keep the profits. There’s also been a lack of transparency with these group of individuals.

  • The 340B Program has been quite controversial this past year with no sight of a resolution.

    • The 340B Program was supposed to help rural, small hospitals get drugs at a lower cost but because of its loose restrictions, its become a profit-making machine. Hospitals can purchase these drugs at a low cost and then make patients pay high costs for them.

The Future of Pharmaceuticals

  • Expect there to be more noise about the high costs of pharmaceutical drugs.

  • It’ll be hard to pass any legislation that will demand transparency from pharma companies because of the heavy influence of PhRMA on the Hill.

  • The Right to Try legislation is the beginning of an era where patients are getting more power in their care.

  • This changes the patient-physician relationship dramatically but also undermines the importance and authority of the FDA.

  • The 340B Program will continue to be a battle between hospitals and pharma companies. Whether hearings will help alleviate this tension will be unknow, but for now, both sides refuse to accept fault.

  • With the CVS-Aetna merger, retail clinics will become the next big thing when it comes to buying drugs and accessing care.

  • The Cigna-Express Scripts merger hopefully will hopefully try to remedy the problem about pharmacy benefit mergers, but only time with tell.


  • It may not seem like it, but patients can have the biggest impact on healthcare.

    • Patients are becoming more knowledgeable and active in healthcare, especially since it is one of the focus issues for the upcoming midterm election.

  • Patients recognize that the system is rigged against them, and so they’re changing their relationships with their physicians and trying to have the best care possible at the lowest cost.

  • All of the mergers are focused on helping patients, so it will be interesting to see if these mergers end up making the system be for the patients and whether patients are receptive to this.

  • For those who have iPhones, patients are now able to see their health records if they go to certain hospitals. MedStar and Johns Hopkins are two hospital systems that allow their patients to access their records on their iPhones.

  • We’re beginning to see a transition into chronic diseases, where patients are more likely to live longer but with a disease or two.

    • Diabetes, arthritis, asthma, and heart disease are just a couple of the most common diseases.

  • The 65+ population is going to increase dramatically over the next 15 to 20 years, which means more people are going to be enrolled in Medicare.

    • Whether Medicare can handle this drastic increase is another debate, but the demographics of our population is changing.

    • This new 65+ population will want care that is patient-centered and does not want unnecessary testing.

    • Companies and stakeholders in healthcare need to be ready for this transition and start preparing for this aging population.

The Future of Patients

  • Patients will continue to empower themselves when it comes to getting their healthcare.

  • They will want more choices but at a lesser cost.

  • Patients will want things to be mobile and make it easier for them to find in-network physicians and care.

  • The 65+ population will have a huge impact on healthcare, so the delivery of healthcare and the affordability of healthcare will be hot topics.

  • Technology will be of a great aide for patients, but not all patients will benefit from these technology advances.

    • An example is the Fit Bit. Yes, it’s helpful for those who are trying to lose weight or are fitness professionals, but for those who are healthy and exercise it may not be of use to them.

  • With new technologies that help patients monitor their lifestyles, we will start seeing patients pay more attention to their wellness and lifestyle.

  • The hope is that patients will realize that they don’t need medication, but rather a change in lifestyle may be all they need.

    • However, social determinants of health can affect whether a patient can change his/her lifestyle. Your living community and finances can influence your ability to lead a healthy lifestyle.

  • Clover Health is a new tech startup that is focused on providing care to seniors in the Medicare Advantage PPO program. In other words, it’s a company that provides care for seniors who have an additional insurance plan to Medicare.

Simply put, the future of healthcare can go in any direction. There are so many tech startups that are entering in healthcare, and they have the potential to disrupt the industry. However, when you are competing against companies that have been in the industry for a long time, you will inevitably start with some losses. Both Oscar Health and Clover Health put up losses before making some progress.

But the bright side is that companies realize that the current system is not working. Insurance companies are merging with pharmacies to create a smoother process for patients, while Amazon is aiming to overhaul the entire system. Google and Apple are continuing to apply for patents to use their technology to make it easier for people to live their lives. Ultimately, all of the healthcare reform is centered on increasing access and decreasing cost.