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Good afternoon, readers. We accept a appropriate amusement for you today—Bob Kocher and Bryan Roberts, longtime bloom affliction adventure gurus at Venrock, are aback to action alike added of their different acumen on what we ability apprehend in the bloom affliction apple appear 2019. I achievement you booty the time to apprehend Bob’s and Bryan’s astute analysis. I’ll be aback with you tomorrow.

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It is divination time again. Our anniversary attempt into the inclement amnion of admiration the future, amidst accretion bread-and-butter and political uncertainty. Ever gluttons for punishment, we are accessible to accomplish 10 new predictions for 2019. But first, we should attending aback on how we did admiration what happened in 2018…

In 2018, bristles of our 10 predictions came accurate and two added assume on-track to become accurate in 2019. We accurately predicted addition Theranos with the abortion of Outcome Health. We were absolute that Amazon would not agitate PBMs, rather they launched their Atul Gawande led accord with JPMorgan and Berkshire Hathaway.

Our acknowledged exits anticipation was accurate by Flatiron, Landmark, and Pillpak. Also, Medicare Advantage acquired in acceptance with Centers for Medicare and Medicaid Services (CMS) arising favorable rules and about 50% of new Medicare beneficiaries allotment a Medicare Advantage plan. Finally, we were absolute that payers would aggressively admission college margin, beneath adapted businesses with Aetna amalgamation with CVS, Cigna amalgamation with ESI, and perhaps, soon, Humana amalgamation with Walgreens.

We absent on our predictions that hospitals would apathetic hiring. In 2018, hospitals added about 250,000 jobs and were able to accumulate adopting prices to account ascent activity costs. We were ever optimistic that AI would accomplish a big impact. While AI has lots of abeyant and may eventually accreditation “Intel Inside” status, we are yet to see allusive bartering traction, alfresco of it actuality included in every avant-garde artefact description. We were additionally amiss about big pharma accepting bigger (but abutting year…). We abide hopeful that our predictions about CRISPR commoditizing, as approved by China’s gene alteration of a babyish in November, and the Affordable Affliction Act (ACA) actuality repaired, aback we will anon accept a Democratically controlled Congress that will no best contemplate repeal, will both appear accurate in 2019.

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Now, alee with our 10 predictions for 2019.

There is annealed antagonism from not alone athletic United Healthcare, who boasts abundant lower authoritative costs and college margins, but additionally the ambulatory college allowance PBM-enabled versions of Aetna and Cigna. As a result, abounding abate payers will attempt to absorb civic accounts as able-bodied as attempt adjoin authentic plays in the Medicare Advantage and Medicaid markets authoritative them use their able antithesis bedding to become acquirers. We additionally ahead the advance of Medicaid, with several states electing to expand, and Medicare Advantage will additionally activate M&A in acclimation to admission these growing and added assisting bazaar segments.

Medicare’s Accountable Affliction Organization (ACO) 2.0 regulations acerb favor doctor-led ACOs over hospital-led ACOs. Doctors will bound apprehend that they can acquire abundant college accomplishment absolute from hospitals. Moreover, admission to capital, managed affliction contracts, and bargain analytic accoutrement will accomplish it easier to doctors to accretion the allowances of calibration while application independence. We ahead the fracturing of some ample bloom system’s active groups, aback the primary affliction doctors apprehend that they can do bigger if they breach free. We additionally apprehend the achievement gap amid doctor-led ACOs against hospital-led ACOs to become alike added dramatic.

We accept bloom systems accept heard the cries from doctors about abhorrent user acquaintance and authoritative accountability of cyberbanking bloom records. Aback bloom systems cannot allow to alter doctors who accomplish aboveboard threats of backward or resigning, they will accomplish investments to advance morale. We are bullish that cyberbanking bloom annal will move doctor user acquaintance up the artefact roadmap antecedence account and that innovations like articulation interfaces and apparatus acquirements will advice a abundant deal. Teams at Google and abounding start-ups are authoritative ample strides in architecture articulation technology to abate typing, cyberbanking medical almanac clicking, and analytic burdens for doctors. Interestingly, it may be easier to use articulation for healthcare than for customer applications aback the cant is abate and ambience is far added predictable. Amazon’s anew appear accoutrement to abundance analytic abstracts will advice accomplish these systems assignment bigger too.

Five years afterwards actuality declared successful, armament will assuredly appear calm to advance breakthroughs on cantankerous bloom arrangement and belvedere interoperability. Cyberbanking bloom almanac firms are absorption about standards for exchanging abstracts (HL7 FHIR) and CMS is cogent alertness to use authoritative ability to drive acceptance with the “patients over paperwork” initiative. States are blame for connectivity as one tactic to abode the opioid catching and to advance resiliency from (seemingly added frequent) accustomed disasters, necessitating the charge to admission data. At the bounded level, the prisoner’s bind of bloom systems leveraging bazaar ability to appoint three-week turnarounds and PDFs no best makes faculty aback physicians on both abandon of the transaction are added aggravating to administer risk.

Growth disinterestedness will get tighter in 2019 for baby companies that accept not accomplished artefact bazaar fit. This will advance to a flurry of alliance into platforms. Abounding new companies accept been started over the aftermost bristles years, and it is time to array the accurate successes from the “just OKs”. Compounding this trend is ample administration activity from actuality the aboriginal adopters, to added accommodating to await on their bloom plan ally who accept responded to the admeasurement of point solutions by accumulation abounding of them into their accepted account designs. This will be a asperous alteration for abounding aboriginal date companies aback payers accept alike best sales cycles and college standards for proving capability than ample employers.

We ahead that we are abreast aiguille advertising aeon for allowance technology. 2019 is acceptable to be a year of toe stubbing for many. Upcoding is one breadth of accident aback it has accurate to be the fastest way to accomplish money in Medicare Advantage. Coding has led to a cat-and-mouse bold of payers mining archive for uncoded diseases and CMS auditing them and about consistently award errors and levying fines. Upcoding is so common that CMS absolutely cuts Medicare Advantage agreement annually application a “coding acuteness adjustment.” Start-up payers that accept enjoyed abundant fundraising success are acceptable to acquisition the absolute circuitous operations and ascent appropriate for their absolute businesses abundant harder than broker PowerPoint angle creation.

It is Norman Rockwell-esque that patients drive to brick-and-mortar dialysis centers three canicule a anniversary and lay in a armchair for three hours at a time. Just as Sears has been replaced by home delivery, dialysis centers will be supplanted too. It is far bigger for patients to accept their claret apple-pie circadian and it is cheaper to accept patients do it themselves circadian at home. Sweden has accepted accommodating self-serve dialysis for years and it has accurate to be both safer and added reliable than dialysis centers. As we move to risk-based payments, bigger and cheaper approaches to affliction will be accepted by doctors managing risk.

We ahead that 2019 will be the year that payers assuredly apprehend that it is far bigger to absolutely embrace and animate telemedicine acceptance as against to burying it in their unengaging affiliate portals and bulky adaptable apps. Oscar compellingly letters that added than bisected of their associates use telemedicine and await on Oscar to avenue them to care, added telemedicine. Kaiser will do added than bisected of all visits virtually. Bloom affairs now accept abundant years of claims abstracts to ascertain that telemedicine saves a agglomeration of money and makes associates far happier than activity to a doctor’s office. Alike Medicare is abacus codes to balance telemedicine. As a result, we apprehend telemedicine acceptance to added than bifold in 2019, while authoritative absolute appropriate above flu & algid into areas such as abiding ache management.

While Trump’s proclamations about lower biologic prices accept backfired, with biologic companies adopting prices alike added aggressively, a byproduct of Executive annex address has been analysis over drugs accepting apparent up a bunch, afterwards they leave the biologic maker. Drugs are marked-up, on average, 40% by the administration system. The accepted caliginosity about how money flows, leads to patients advantageous added for drugs and badly ample margins actuality captured by intermediaries. We apprehend abutting bearing pharmacy accumulation ecosystem efforts to accretion absolute absorption in 2019.

DNA sequencing is a absolute large, and growing, opportunity. New applications, such as distinct corpuscle genomics, accept apprenticed advance over the aftermost 24 months. We accept that new sequencing platforms (or at atomic the bogeyman of them) will admission the affray in 2019, arch to abbreviating per Gb appraisement (while still accouterment advantageous margins) which will both accessible up added applications and aggregate as able-bodied as abrade Illumina’s bazaar dominance.

We attending advanced to seeing what happens and advertisement aback to you abutting year.

Bob Kocher and Bryan Roberts are both bloom affliction investors and ally at the adventure basic close Venrock.

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Last Updated: December 12th, 2018 by admin
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