January 2017 isn't just the beginning of a new year, it's also the beginning of a new presidential administration, one which will represent a radical shift from the last eight years. I talked to some experts and combined their ideas with some thoughts of my own to make some predictions about what we can expect from the coming year.
1. Trump’s presidency will slow down some IT adoption
Most things related to Donald Trump’s presidency are still in a state of some uncertainty, and Chilmark Founder and Managing Partner John Moore thinks that uncertainty itself will lead many to put the breaks on big health IT projects.
“Because of that indecision [about what a repeal of the ACA will look like], I believe healthcare and healthcare executives are going to take a very cautious approach going forward,” Moore told MobiHealthNews. “Therefore I think the healthcare IT market is going to be soft in 2017 for any big initiatives. If they’ve already signed a contract, and they’re dong a big EHR replacement process or program, they will likely continue with that, but I think some may shelve it and see what happens and not move as quickly on that replacement.”
Moore thinks value-based care is a trend that will continue no matter what happens with Trump, though a loss of funding to Medicaid could certainly slow down the development of value-based business models in healthcare.
The NIH-funded Precision Medicine Initiative and the Cancer Moonshot could go either way — they have momentum and there are reports that Trump and Vice President-Elect Mike Pence support the projects, but Trump needs to make cuts in spending to make his plans work, and science spending is in a precarious position. Dr. Eric Topol, who leads the Scripps Translational Science Institute, a recipient of $207 million in grants for the PMI, told Buzzfeed shortly after the election that he was "extremely worried" about the results of the election and that NIH and biomedical research funding would "almost certainly be at risk".
2. We could see a boom in M&A and IPOs
Union Square Ventures cofounder Fred Wilson wrote on his blog that Trump’s tax plans could lead to a windfall of newly available cash for companies, which could translate to an M&A boom. In digital health, M&A has already been increasing the last few years and funding continues to flow pretty strongly, so it wouldn’t be out of line to see even more movement.
Snapchat’s predicted IPO could also set off a fervor for technology IPOs, one that some digital health companies could get swept up into too. As for who's likely to go public next year, I'd like to throw that one out to you all. Email or let me know on Twitter who you think is ripe for IPO.
3. Pharma’s investment in digital health will grow slowly and steadily
Every year, pharma makes bigger and more serious investments in digital health, whether it’s Eli Lilly investing in smart injectables, AstraZeneca and Novartis launching more consumer-facing apps, or companies like Johnson & Johnson and Roche continuing to invest in mobile devices and apps for the management of diabetes. There’s no reason this shouldn’t continue into 2017.
Moore says that pharma is slowly gearing up, but it will be a few more years before they really settle into the digital health space.
“If you look five years out, pharma will be much more heavily involved because increasingly how they price their drugs is going to be based on outcomes,” he said. “And they’re going to have to be able to effectively and officially collect what are the real outcomes of a patient on a medication because there’s going to be some kind of pricing bonus associated with that if they can clearly demonstrate good outcomes with the treatment protocols they propose in using their medication.”
4. No big moves from payers, but hospital price transparency may increase
For the most part, health insurers haven’t shown any signs of making serious investments in digital health. This year has seen some improved apps, adoptions of video visits, and use of wearables and wellness programs tied to incentives in payments, but these changes tend to be small or incremental. Even Oscar Health, the small startup insurer that hangs its hat on its digital health and telemedicine offerings, stumbled a bit this year when it cancelled its expansion into two planned markets.
The fact is, the Affordable Care Act, and any turmoil associated with repealing and replacing it, is going to take all the focus of the major health insurance companies, leaving scant bandwidth and funding for major digital innovation.
High deductible plans are here to stay, though, and any repeal of the ACA is unlikely to change the trend of consumers being responsible for more and more of their own cost of care. Ralph Derrickson, the CEO of Carena, thinks that this trend will lead to hospitals reaching out more to customers to help them understand costs and treatments.
“We’ve focused on rising consumerism,” he told MobiHealthNews. “That’s absolutely true, but how is it going to manifest itself? They’re not going to ration care, they’re going to get care, then get the bill, then they’re going to ration their payment, not their care. That’s going to force health systems to want to help patients understand what’s going on so they have a much better chance of getting paid.”
5. As video visits become table stakes, connected health and telemedicine will converge
Predicting that telemedicine will continue to grow seems safe, but too easy. Companies like Teladoc keep setting new records of number of remote visits per month, the addressable market is huge, and the forces that drive people to telemedicine — a healthcare cost burden that’s shifting more and more to the consumer and a desire for healthcare to be as convenient as other consumer-facing industries like banking and travel — aren’t going anywhere.
But as the big telemedicine companies compete, they are going to be looking for new ways to differentiate from each other. This year, that drove both Teladoc and American Well to branch off into new specialties like behavioral health and dermatology, and that trend will likely continue next year. In addition, we’ve started to see American Well partner with connected device companies like Tytocare and EarlySense, and before that Doctor on Demand partnered with CliniCloud. Telehealth presents a strong use case for consumer-facing connected health devices that are looking to increase their market presence, and connected devices present another way for video visits companies to differentiate themselves from their competitors.
6. The licensure and regulatory barriers to telemedicine will continue to soften
The other thing paving the way for telemedicine to have a good year in 2017 is that many of the regulatory barriers are showing signs of softening. The Federation of State Medical Boards has now gotten 18 out of 50 states to enact legislation that lets them participate in an Interstate Licensure Compact, with Michigan on track to join in February. Signs are pointing to a settlement in the protracted legal battle between Teladoc and the Texas Medical Board.
Once legislative barriers are lifted, the biggest remaining barrier to telemedicine will be reimbursement, which could break the market wide open, Moore told MobiHealthNews.
“The big question has always been what’s the reimbursement model. How will self-insured employers pay for it? What are the rates? It’s always follow-the-money and I think we’re still unclear about what a lot of those reimbursement models look like today. There’s still a lot of experimentation around that,” he said. “Companies like Teladoc have done a really good job but when you think about how many visits occur in a given day across the country and what percentage of those visits could be telehealth visits, they’ve just scratched the surface.”
7. Wearables will turn a new corner — or die trying
2016 was a rough year for wearables. It was the end of the line for Pebble, for Basis, for the Microsoft Band, and, while Jawbone seems to be hanging on by a thread, there’s no question that 2016 wasn’t kind to them. Fitness wearables have lost their luster as a hot new gadget and at the same time haven’t really proved their worth as a health device. So what happens next for the category?
Dan Ledger, the founder of Path Collaborative, which consults with wearable companies, thinks wearables need a big re-invention to grow beyond a niche category for athletes and health nuts. That could mean unlocking one of the areas of wearable tracking that no one has managed to produce really high quality data in yet — namely stress and sleep. A wearable company that can usefully and accurately track stress and help users reduce stress, or help their users to improve the quality of their sleep, could open up a larger market. But ultimately, he said, the next step for wearables might involve a more radical reinvention.
“I think if Apple and Fitbit haven’t cracked this, if the brute force approach with today’s technologies hasn’t produced anything, we have to be looking at other companies who are taking these more radical approaches and saying ‘You know what? Maybe this doesn’t have to be a wearable at all. Maybe we just need to question everything. Maybe this isn’t on someone’s person 24/7, maybe it’s something someone uses for five minutes a day.’” Ledger said. “I think the people who aren’t afraid to ask questions about form factor and modality will be the ones who open up the next wave of innovation here.”
8. Apple will ramp up its healthcare ambitions, Verily may not
Even before MobiHealthNews’s investigative report this year uncovered Apple discussions with the FDA around a Parkinson’s diagnostic app and two cardiac devices, there were rumors that Apple is working on a major device in healthcare. And it’s not that surprising — since the launch of HealthKit in 2014, Apple has upped the ante on its digital health offerings every year at WWDC, with ResearchKit in 2015 and CareKit in 2016. Whatever they’re working on now, there’s a good chance a new health product or service is announced in June.
On the other hand, Alphabet has been pulling away from many of its moonshots, which makes the future of Verily uncertain. The company hasn’t announced a new partnership in a while and Verily and Novartis recently pulled back on the planned release date for the smart contact lens. We might well see the company playing it safer in 2017, focusing on things like Liftware, the company’s silverware for people with essential tremor.