Each year I dust off my crystal ball and attempt to divine what lies ahead for the healthcare industry. With an eye toward assessing the state of the industry and fine-tuning my crystal ball, I've decided to revisit my predictions about what we could expect in 2024. What I've discovered is that I'm sometimes wrong, sometimes right, and always surprised by the rate of change in what is undoubtedly one of America's most dynamic industries.
So, without further ado, let's see which of my bold predictions hit the mark and which ones were as off-target as a broken stethoscope.
In late 2023, I had little reason to believe that healthcare might become a focus of the upcoming presidential campaign. Unfortunately, I was correct. The subject, which affects all Americans, was hardly broached, must less addressed in any sort of substantive way.
Going forward, I think healthcare will become a topic of politics, but we're likely to see the discussions built around what I call "The RFK Jr. Effect." Fringe ideas about wellness, disease causation and medications will go mainstream. Skepticism about the work of health professionals will balloon. Until, of course, people develop a genuine healthcare need. Then they'll be thankful for the science-based healers who make up the backbone of our healthcare industry and, perhaps, wonder why we don't discuss it more when choosing our leaders.
Looking back on my original prediction, I'd say that I was slightly off in foreseeing a rise in "mega-mergers." As expected, in 2024 Cigna did indeed unload its Medicare business, selling it for $3.7 billion to Health Care Service Corporation. Other than that, I'd describe what we saw in 2024 as a healthy number of mergers, although deal volume was slightly down from 2023.
I am not entirely backing away from this prediction, however. In 2024, hospital mergers were up, Ohio's Summa Health went to Health Assurance Transformation for $485M, Adventist scooped up Sierra Vista and Twin Cities Community for $550M, and Risant grabbed Cone Health, to name a few notable acquisitions. These may not be mega, but they're mergers, and they continue to portend increased consolidation in the healthcare industry.
In 2024, MA enrollment grew by about the same rate as it did in 2023. My sense that criticism of the program would lead people to abandon it simply hasn't come true. I suspect that's because beneficiaries have discovered that MA plans provide rich benefits and limit out-of-pocket expenses, things you simply can't get from traditional Medicare. (Disclosure: I lead SCAN Health Plan, a California-headquartered Medicare Advantage Plan with >297,000 members.)
Going forward, critics of MA are likely to find their arguments less persuasive than ever. Last week, the Biden administration proposed an increase in payments to MA plans in 2026. Also, Dr. Mehmet Oz, the likely new administrator of the Centers for Medicare and Medicaid Services (CMS), has been unabashedly supportive of Medicare Advantage. Look for the program to continue to grow over the next four years and beyond.
True to my prediction, venture funding for the digital health sector dropped in 2024. That doesn't mean anyone should write off digital health. Its fundamental problem has long been its failure to meaningfully connect to the analog healthcare system. But no one should doubt that new startups with realistic valuations and a plan to seamlessly connect with the traditional healthcare system will pop up and succeed. That's even more likely as artificial intelligence comes on the scene. It promises to solve some of the industry's vexing and most intractable problems and could start to impact patient care -- albeit in small ways at first -- sooner than we expect.
Unfortunately, I hit the nail on the head with this one. According to recent data, the demand for chief diversity officers waned in 2024, which many people attribute to backlash from conservative state legislatures. Support for DEI initiatives isn't likely to come from the federal government either. A few days after the creation of the Department of Government Efficiency (DOGE) was announced, Vivek Ramaswamy posted on X, "An efficient government has no place for DEI bloat. Time to DOGE It."
Equity boosters shouldn't despair, however. Whether companies choose to hire diversity officers, many healthcare organizations continue to view health equity as a worthwhile goal, and we should expect these efforts to bear fruit despite whatever headwinds they may face at the government level.
I'm glad to say that the number of physicians who say they're burned out ticked down in 2024. Nevertheless, the number remains stubbornly high -- and may have dropped as a result of the exodus from the profession we saw following the COVID pandemic.
The fact is, to fully confront the problem, we need a revolution in the management and leadership of most healthcare organizations. But too many organizations are getting by just fine with business as usual, so they delay making fundamental and necessary changes to their strategies and operations even as their front-line staffs continue to suffer.
No doubt about it: the popularity of these drugs is on the rise. Their presence has literally changed how the medical profession thinks of obesity as a health problem. What's more, these drugs are being prescribed for a host of new conditions. Last April, the FDA approved Wegovy for people with cardiovascular disease. In an era of misinformation, where a whole swath of American society has de-credentialed the medical profession, we should expect to see faith in, and the use of these medications continue to grow.
New diagnostic tools and medications seem to come online every day. We hear about them and celebrate their lifesaving prospects. Less discussion is devoted to the cost of these breakthroughs. I believed that the implementation of the Inflation Reduction Act's Medicare drug negotiation provisions would lead to more intensive conversations about cost. I can't honestly say that's come true. No one should despair just yet: diseases that were once considered death-sentences are turning into chronic diseases, a fact we should always celebrate even as many of us look for new ways to finance these life-saving treatments.
In 2024, Mount Sinai Medical Center's longstanding CEO, Ken Davis, will make way for ER Chief Brendan Carr. Humana's Bruce Broussard will be succeeded by industry veteran James Rechtin. Amid increasing industry headwinds -- regulatory pressures, declining reimbursement rates, and persistent inflation -- we will see many long-tenured healthcare leaders depart their roles. New approaches will be needed to guide organizations through a changing environment and many long-tenured leaders won't stick around to make the hard decisions needed to work through the impending changes. Such turnover will create significant opportunities for organizations to align on new directions -- but they will also create instability in what will ultimately be a year of transition across the healthcare sector. Look for many household industry names to be sporting new business cards in 2025.
Big tech is always nibbling around the edges of healthcare. For good reason. At almost 20% of GDP, healthcare represents a potential growth vector. The year 2023 was the year of Amazon. It launched Amazon Clinic, completed its acquisition of One Medical, and finished shutting down Amazon Care.
Meanwhile, other big tech companies continue to define their own meaningful healthcare strategies. Look for at least one branded tech company to announce a major shift of its strategy and/or personnel. Some critics (reasonably) tag big tech for failing to contain misinformation and creating even greater mistrust in the healthcare industry. Look for select players in big tech -- led by people like Google's Karen DeSalvo and Michael Howell and YouTube's Garth Graham -- to continue to advance solutions that improve the accuracy of health information.
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I'd say that overall, my powers of prediction were not far off. For a guy more practiced in the healing arts than the dark arts, I'm feeling pretty good about my track record.
How about 2025? I'll tell you in a year. In the meantime, where did I put those tarot cards?