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Sana 2022 Predictions: Healthcare in 2022 - Transparency, virtual care, and consolidation among trends to watch

vmblog predictions 2022 

Industry executives and experts share their predictions for 2022.  Read them in this 14th annual series exclusive.

Healthcare in 2022: Transparency, virtual care, and consolidation among trends to watch

By Jaime Moran, Chief Product Officer at Sana

The 3 biggest trends to watch in the healthcare industry in 2022

Growth of virtual healthcare delivery - Covid has changed the trajectory of telehealth adoption.  And while it may recede a bit in 2022 as some patients feel safer returning to doctor's offices, the long term trend is clear.   We are not only seeing increased adoption of digital primary care through an increasingly crowded field of apps like PlushCare, MDLive, Teladoc, SteadyMD  and Amwell, but also a real maturation of the product offering evidenced  by solutions marketed along different demographic axes, such as racial identity (Spora), sexual orientation (Folx), and specific health conditions (Thirty Madison) among others.

M&A has continued at record levels amongst not just established players but very early stage companies as well, and we see no end in sight given the capital in the market. In fact, with the differential in valuations between new entrants and legacy companies, there are arbitrage opportunities for new entrants to acquire legacy companies that dwarf them in customer base, revenue, profits and expertise. A challenge is that a lot of this M&A activity is not value-creation, it's defensive or it's arbitrage in valuation, and thus can be a distraction from the work of creating and commercializing disruptive innovation that addresses the outsized pain points and unmet needs otherwise known as the US healthcare system.

Rise of transparency - From the passing of the Hospital Price Transparency Rule to the growth of transparent pharmacy benefits managers, the industry is finally getting pushback on the opacity that has allowed multiple players to extract huge profits from the system despite adding little value.

The innovations that are poised for a breakthrough in 2022

Virtual mental health and substance use treatment will be an early segment to hit mainstream coming out of the Covid acceleration, because of the sensitive, confidential nature of treatment, the shortages of local care providers, and the need for more continuous, real-time support to successfully manage these healthcare conditions.

Hospital price transparency regulations just went into effect and even more recently penalties increased, prompting more health systems to comply. The controversies around health systems subverting the regulations and hiding their prices is a harbinger for how transformative this regulation will be. This is an area where we'll see rapid adoption of this newly public information to reduce irrational price variation and level the playing field. Regulation on surprise billing pairs with this to really enable a breakthrough - though it'll likely take more than just 2022 to play out.  Sana has been an early adopter of Reference-based Pricing, and these regulations and innovations around transparency and reducing predatory surprise billing will translate to more health systems cooperating with innovative models like ours.

Payviders.  The phenomenon of tight payer-provider business relationships (such as  payers  entering joint ventures with healthcare providers or building out their own provider functions) is not new - its been foundational to the model that Kaiser Permanente has used to control costs for decades - but the financial stresses Covid put on payers will likely accelerate its adoption. In order to control healthcare costs, payers are finding it increasingly necessary to move into other layers of the value chain, and none are so important as primary care, which serves as the canary in the coal mine/quarterback/tip of the spear/pick your metaphor for high quality/low cost healthcare.  Look to see even more deals like Aetna's joint venture with Alina Health and Sana's own partnership with Proactive MD on Sana MD primary care.

Where investors are looking for opportunities in the healthcare industry  

Healthcare delivery and regulation has always been local, and if you look at ability to grow - and how new entrants grow - it's challenging. For Kaiser, Intermountain, and Geisinger, as well as new entrants like Oak Street Health, and even health insurance startups like Oscar and Devoted Health - growth is zip code by zip code. Businesses that upend this paradigm, leveraging mobile and virtual across the entire value chain, have an entirely different growth paradigm. 

The other key area where Investors will look for opportunities is automation of care delivery, an area where the US may learn a lot from international care delivery.. American care delivery, even where it's a large health system like HCA, is essentially a highly variable cottage industry of humans leveraging their training and knowledge. In places like China where they have healthcare provider shortages and highly rural population pools, they've had to innovate by leveraging technology to pair mass automation  with mass personalization. US companies like Babylon, K Health, and Lark have begun to show the immense value to be gained by applying those strategies in the US.

How regulation will impact the healthcare industry

The ONC Cures Act Final Rule went into effect in April 2021. It's meant to spur the creation of apps that will provide patients (and their chosen providers) with all of the patient's electronic health information and to require providers to share our health information in a standardized format with such apps at our request.  This should accelerate the time to value of services that seek to leverage personal medical histories to improve quality of care and care navigation.

Hospital price transparency regulations will lead to consumers/payers having a greater ability to price shop and eventually to lower prices.

In July, 2021, the BIden administration issued an "Executive Order on Promoting Competition in the American Economy," comprising 72 different initiatives aimed at increasing antitrust enforcement.. One of those directives specifically asked  the FTC to reformulate merger guidelines to stop hospital mergers found to be harmful to patients. Any resistance to the consolidation of the already small number of firms that control hospital facilities in most population centers is bound to be a win for patients.

The lingering effects the pandemic will have for companies in the healthcare space

Unfortunately, deferred care will likely mean some of our patients - and this applies globally not even just within the US - will be diagnosed later or have more serious health needs due to delayed preventive and maintenance care.  So while 2020's cost of claims were famously lower than expected, we anticipate 2022 to be higher than anyone would have projected 2 years ago.  You can think of it as being driven by at least four discreet buckets of cost: (a) deferred care, (b) conditions created or made worse by deferred care, (c) the lasting mental health and substance use treatment effects of Covid, and (d) just the lingering cost of Covid care itself.

Additionally, healthcare provider burnout will have long-standing ramifications. This means shortages of care providers and thus access to care will worsen. The cost of labor at all levels of care delivery have skyrocketed and we don't see that improving in 2022. This will help spur adoption of automation and digitization of care delivery, and perhaps even globalization as telephonic and virtual services can be provided by teams offshore.  But in the interim, health systems will likely push for much higher prices, even though healthcare prices in the US already far exceed prices basically everywhere else in the world. 

Provider burnout just adds to other ways in which Covid-19 has exacerbated hardships for underserved communities.  Data collected in October 2020, showed 81MM adults, roughly 1 in 3, found it very difficult to cover usual expenses, which included food, rent and medical expenses. Additionally, the pandemic imposed new constraints to accessing healthcare providers in at-risk communities. The reduction of in-person visits and the perceived danger of commuting to a physician left underserved individuals little to no access to primary or preventative care. Even though telehealth has emerged as a service to extend quality healthcare access to those high-risk individuals living in low-income communities, access to it requires reliable internet services, which presents another barrier for these communities.  These effects are likely to linger into 2022 and beyond and the economic recovery has been uneven.

How digital transformation is impacting the healthcare industry

The move to all things digital is democratizing access to better health plans for small businesses, a traditionally underserved market segment. Whereas the only practical entry point to getting group coverage used to be going through a broker, new age providers are building their own marketing and sales team, and leveraging digital marketing platforms to get in front of the right small groups at scale, anywhere they are licensed to sell (no more needing to be in the same room or even city as the customer).  On the backend, implementation of smarter digital processes in quoting are also greatly decreasing the cost to sell to small groups.  The result of those two trends is that whereas small group's only options used to be begging brokers for a quote, they've become more empowered as buyers. It's kind of like the transition to being able to buy airline tickets directly from the airlines online instead of through a travel broker.

The future of work in 2022

An increase in globalization of the talent pool particularly for engineering talent. The advantages in both acquiring talent (being able to select from many or all time zones) and retaining it (boost in employee happiness from work location flexibility) are vast for firms willing to go remote.  And the largest advantages will be realized by those companies founded and aligned to virtual-first work - teams that have built their culture, professional development, collaboration from the ground up for a virtual world. 



Jamie Moran 

Jaime Moran is dedicated to identifying, commercializing and scaling solutions that empower individuals to live healthier, happier, more productive lives -- while reducing healthcare costs. She focuses on the intersection of clinical and technology innovation with human-centered, personalized approaches to healthcare.

She brings a decade of operating company experience driving results across complex, multi-stakeholder ecosystems with an array of partners including health insurers, healthcare provider systems, health technology, analytics, retail and digital health companies.

Jaime earned her MBA as an Arjay Miller Scholar at Stanford Graduate School of Business. She received an MSc in Chemical Research as a Fulbright Scholar at University College London, where she published research on computer simulations of molecular interactions.
Published Thursday, November 04, 2021 7:34 AM by David Marshall
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