美国医疗保险行业的竞争已趋于白热化，首先是强势的联合健保公司（United Healthcare），它以低管理成本和高利润著称；其次是有了PBM业务加持后利润更高的安泰和信诺等保险公司。在这些巨无霸的挤压下，业内的很多小玩家很难阻止全国居民账户的流失，也无力在Medicare Advantage和Medicaid这种公立医保市场上与专业玩家竞争。为扩大自身体量，家底还算雄厚的医保公司便会谋求并购。另外，美国已有数个州投票同意扩大Medicaid医保计划的参保范围，加之Medicare Advantage计划的火热，各大医保公司也会考虑通过并购来进入这些快速增长且利润越来越高的细分市场。
我们认为，我们已经接近保险技术的炒作周期的顶峰了，2019年将是很多公司踢到铁板的一年。其中，利用计算机编码骗保是一个值得关注的风险领域，事实已经证明，它是在Medicare Advantage项目中骗取保金最快的一种方式。由于利用计算机编码骗保的行为十分猖獗，“猫捉老鼠”的游戏时时都在上演，支付方总是在寻找还没被编码的疾病，美国医疗保险和医疗补助服务中心则对其进行审计，而且CMS几乎总能发现错误，并处以罚款。这种骗保方式之猖獗，以至于CMS每年都要进行“编码强度专项调整 ”，来砍掉Medicare Advantage的一部分报销金额。有些作为支付方的创业公司虽然在融资上获得了巨大的成功，但他们很快会发现，实际业务运营之复杂，以及规模化之艰难，要比他们在融资PPT中畅想的艰难得多。
It is soothsaying time again. Our annual plunge into the choppy waters of predicting the future, amid increasing economic and political uncertainty. Ever gluttons for punishment, we are ready to make 10 new predictions for 2019. But first, we should look back on how we did predicting what happened in 2018…
In 2018, five of our 10 predictions came true and two more seem on-track to become true in 2019. We correctly predicted another Theranos with the implosion of Outcome Health. We were correct that Amazon would not disrupt PBMs, rather they launched their Atul Gawande led collaboration with JPMorgan and Berkshire Hathaway.
Our successful exits prediction was validated by Flatiron, Landmark, and Pillpak. Also, Medicare Advantage gained in popularity with Centers for Medicare and Medicaid Services (CMS) issuing favorable rules and nearly 50% of new Medicare beneficiaries choosing a Medicare Advantage plan. Finally, we were correct that payers would aggressively acquire higher margin, less regulated businesses with Aetna merging with CVS, Cigna merging with ESI, and perhaps, soon, Humana merging with Walgreens.
We missed on our predictions that hospitals would slow hiring. In 2018, hospitals added about 250,000 jobs and were able to keep raising prices to offset rising labor costs. We were overly optimistic that AI would make a big impact. While AI has lots of potential and may eventually warrant “Intel Inside” status, we are yet to see meaningful commercial traction, outside of it being included in every innovative product description. We were also wrong about big pharma getting bigger (but next year…). We remain hopeful that our predictions about CRISPR commoditizing, as demonstrated by China’s gene editing of a baby in November, and the Affordable Care Act (ACA) being repaired, since we will soon have a Democratically controlled Congress that will no longer contemplate repeal, will both come true in 2019.
Now, onward with our 10 predictions for 2019.
1. More payer consolidation
There is stiff competition from not only stalwart United Healthcare, who boasts much lower administrative costs and higher margins, but also the rejuvenated higher margin PBM-enabled versions of Aetna and Cigna. As a result, many smaller payers will struggle to retain national accounts as well as compete against pure plays in the Medicare Advantage and Medicaid markets making them use their strong balance sheets to become acquirers. We also think the growth of Medicaid, with several states electing to expand, and Medicare Advantage will also trigger M&A in order to enter these growing and more profitable market segments.
2. Physician-led Accountable Care Organizations will grow rapidly
Medicare’s Accountable Care Organization (ACO) 2.0 regulations strongly favor doctor-led ACOs over hospital-led ACOs. Doctors will quickly realize that they can earn much higher wages independent from hospitals. Moreover, access to capital, managed care contracts, and low-cost analytical tools will make it easier to doctors to gain the benefits of scale while retaining independence. We anticipate the fracturing of some large health system’s employed groups, when the primary care doctors realize that they can do better if they break free. We also expect the performance gap between doctor-led ACOs versus hospital-led ACOs to become even more dramatic.
3. Doctors get less dissatisfied
We believe health systems have heard the cries from doctors about terrible user experience and administrative burden of electronic health records. Since health systems cannot afford to replace doctors who make credible threats of retiring or resigning, they will make investments to improve morale. We are bullish that electronic health records will move doctor user experience up the product roadmap priority list and that innovations like voice interfaces and machine learning will help a great deal. Teams at Google and many start-ups are making large strides in building voice technology to reduce typing, electronic medical record clicking, and searching burdens for doctors. Interestingly, it may be easier to use voice for healthcare than for consumer applications since the vocabulary is smaller and context is far more predictable. Amazon’s newly released tools to mine clinical data will help make these systems work better too.
4. Interoperability becomes interoperable
Five years after being declared successful, forces will finally come together to lead breakthroughs on cross health system and platform interoperability. Electronic health record firms are coalescing around standards for exchanging data (HL7 FHIR) and CMS is expressing willingness to use regulatory power to drive adoption with the “patients over paperwork” initiative. States are pushing for connectivity as one tactic to address the opioid epidemic and to improve resiliency from (seemingly more frequent) natural disasters, necessitating the need to access data. At the local level, the prisoner’s dilemma of health systems leveraging market power to impose three-week turnarounds and PDFs no longer makes sense when physicians on both sides of the transaction are increasingly trying to manage risk.
5. Consolidation in digital health
Growth equity will get tighter in 2019 for small companies that have not achieved product market fit. This will lead to a flurry of consolidation into platforms. Many new companies have been started over the last five years, and it is time to sort the true successes from the “just OKs”. Compounding this trend is large employers going from being the early adopters, to more willing to rely on their health plan partners who have responded to the proliferation of point solutions by incorporating many of them into their standard benefit designs. This will be a rough transition for many early stage companies since payers have even longer sales cycles and higher standards for proving effectiveness than large employers.
6. InsureTech takes a lump or two
We think that we are near peak hype cycle for insurance technology. 2019 is likely to be a year of toe stubbing for many. Upcoding is one area of risk since it has proven to be the fastest way to make money in Medicare Advantage. Coding has led to a cat-and-mouse game of payers mining charts for uncoded diseases and CMS auditing them and nearly always finding errors and levying fines. Upcoding is so pervasive that CMS actually cuts Medicare Advantage reimbursement annually using a “coding intensity adjustment.” Start-up payers that have enjoyed great fundraising success are likely to find the very complex operations and scaling required for their actual businesses much harder than investor PowerPoint pitch creation.
7. Dialysis disrupted
It is Norman Rockwell-esque that patients drive to brick-and-mortar dialysis centers three days a week and lay in a chair for three hours at a time. Just as Sears has been replaced by home delivery, dialysis centers will be supplanted too. It is far better for patients to have their blood cleansed daily and it is cheaper to have patients do it themselves daily at home. Sweden has embraced patient self-serve dialysis for years and it has proven to be both safer and more reliable than dialysis centers. As we move to risk-based payments, better and cheaper approaches to care will be embraced by doctors managing risk.
8. Telemedicine takes off
We think that 2019 will be the year that payers finally realize that it is far better to fully embrace and encourage telemedicine usage as opposed to burying it in their unengaging member portals and clunky mobile apps. Oscar compellingly reports that more than half of their members use telemedicine and rely on Oscar to route them to care, increasingly telemedicine. Kaiser will do more than half of all visits virtually. Health plans now have enough years of claims data to discover that telemedicine saves a bunch of money and makes members far happier than going to a doctor’s office. Even Medicare is adding codes to reimburse telemedicine. As a result, we expect telemedicine usage to more than double in 2019, while making substantive inroads beyond flu & cold into areas such as chronic disease management.
9. PBM disruption talk becomes reality
While Trump’s proclamations about lower drug prices have backfired, with drug companies raising prices even more aggressively, a byproduct of Executive branch rhetoric has been scrutiny over drugs getting marked up a bunch, after they leave the drug maker. Drugs are marked-up, on average, 40% by the distribution system. The current opacity about how money flows, leads to patients paying more for drugs and excessively large margins being captured by intermediaries. We expect next generation pharmacy supply ecosystem efforts to gain real traction in 2019.
10. Real progress with new DNA sequencing platforms
DNA sequencing is a very large, and growing, opportunity. New applications, such as single cell genomics, have driven growth over the last 24 months. We believe that new sequencing platforms (or at least the specter of them) will enter the fray in 2019, leading to decreasing per Gb pricing (while still providing healthy margins) which will both open up additional applications and volume as well as erode Illumina’s market dominance.
We look forward to seeing what happens and reporting back to you next year.
Bob Kocher and Bryan Roberts are both health care investors and partners at the venture capital firm Venrock.