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As Tyler Durden (Brad Pitt) said in Fight Club… ‘you wanna make and omelet, you gotta break some eggs’.

In healthcare, circa 2018, this may be the year we make omelets and usher in a new epoch for the industry. Leading indicators that massive change has arrived are coming into focus. But, let’s take a step back and review the recent history that got us here:

The modern epochs of healthcare can be broken down into the following:

  • 1940’s/1950’s — emergence of modern health care systems and financing

  • 1960’s/1970’s — massive expansion, coupled with infatuation-like infusion of money from Medicare, Medicaid, NIH, employer sponsored health insurance and the like.

  • 1980’s/1990’s — the rise of organized medical practice, larger health systems and dominance of corporate healthcare.

  • 2000’s/2010’s — market failure to reign in the beast via curbs on funding and failure of managed care to manage or care,

  • Maybe 2010+’s — disruption and reinvention of the healthcare sector driven by necessity and a whole lot of upside potential.

What are the trends to watch in 2018+?

A. Market consolidation among traditional players — hospitals, health systems, medical groups and integrated health systems. And, by consolidation, we mean in all forms: mergers, acquisitions, and outright closures.

B. New players in the market that were previously unheard — lured by big money:

  • Foreign money tracking into US based healthcare providers and technology (Chen and CHS; FDI in US biotech),

  • Amazon buying state pharmacy access and entering the InsurTech sector,

  • Apple goes Medical.

C. POTUS is a healthcare wildcard if there ever was one — the shift in federal policy under Trump is swift and persistent — driven primarily (at this point) by executive order:

  • Cutting funding for CSR payments and limiting enrollment time and funds for ACA IFP,

  • Terminating/reversing long-establish directions for CMS — Medicare & Medicaid,

  • Swelling the ranks of Medicare Advantage and Value-based MSSP-like programs by lowering burdens to entry and rewarding players that come to play.

D. Reform efforts — currently stymied at the national level — moves to the States

  • Insurance market innovations (e.g. 1332 waivers, Vermont OneCare, etc.,) will take center stage as the petri dish of meaningful health care reform

  • Medical Practice, Technology and other market-light tweaks are all moving forward with grassroots enthusiasm at the state level while Federal efforts stall out: Telemedicine, community para-medicine, Direct Primary Care, Price Transparency

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