In October, AllianceBernstein signed a lease for its new Nashville headquarters; the asset-management and research firm plans to bring 1,000 new jobs to Music City. To help welcome AllianceBernstein to the area, Vanderbilt Business hosted an invitation-only breakfast featuring Lance Wilkes, Senior Healthcare Research Analyst for Bernstein. The talk was moderated by Larry Van Horn, Executive Director of Health Affairs and Associate Professor of Management (Economics).
During the breakfast, Wilkes focused on the three main trends that he sees happening in the healthcare industry right now. He says that more immediately, cost will become the most important consideration and Medicaid and Medicare will drive most of industry growth. Looking further into the future, Wilkes predicts that big disruptions, such as online pharmacies, will transform the way people receive care. Here’s how he foresees these trends changing healthcare in greater depth:
Of course, cost has always been an important factor in healthcare, especially to the people and organizations who were ultimately paying the bills. However, Wilkes says that cost wasn’t the most important consideration — but this state of affairs is primed to change. “Today with the growth of government programs, you’re seeing government as a price maker. And when they establish 1% price increases for premiums in a given year or what not, that’s causing pressures throughout the system,” he said. However, with these pressures come opportunities to change how care is delivered and to reduce costs.
Currently, just over half the U.S. population, or about 150+ million people, gets their insurance through an employer, a number that has been holding steady. While employer-provided health insurance will remain an important part of the health insurance picture, it’s unlikely that it will contribute major growth — which is where Medicare and Medicaid come in as the population ages. “The (people) looking for growth in the space, or the ones looking at impacts to (their) business, it’s really going to be growth in the Medicare programs and the Medicaid programs,” Wilkes said. “Those programs are really getting outsourced or privatized. A decade ago, maybe 20% of the spending in those programs was in managed care…You forecast this out to 2030 and we’d say that those numbers get to be more like 50 to 60% and we think the decade after that it will continue to grow.”
As a senior analyst, Wilkes spends a lot of his time researching potential disruptions to the healthcare space. Some of these events may be further off, such as moving from physical to online pharmacies, but he says companies such as Amazon are already working to make it happen. Other trends are currently in process, such as the shift to value-based reimbursement. “The concept of shifting the alignment of interest of primary care physicians in order to try to drive down costs through the system is going to become a pervasive trend,” he said. “We (predict this will happen) throughout the 2020s, but especially as you get to the latter portion of that decade.”