2014 in Review

Like most people, I am a terrible prognosticator.  Our predictions are too influenced by our desires.  2014’s health care developments were no exception.  Perhaps the most-watched event in 2014 was the roll-out of the exchange plans.  While not smooth, it was not a complete disaster.  The number of uninsured did decline, although this was more due to Medicaid enrollment growth, and a surprising number of Americans have apparently decided to ignore the individual mandate and not get coverage.  Health spending growth has remained subdued, coming close to GDP growth rates, which is a very important comparator, but staying above personal income growth, which is even more important to consumers.  The lower rate of spending growth appears largely due to higher cost-sharing imposed on patients, and it is as yet unclear whether this is a good or bad occurrence.

Other important developments in 2014 include the continued easy access to capital for startup and growth companies, especially if their business plan has the words mobile, app or wearable in the name.  We will see if this continues when investors realize the likely lack of returns from products and services that have little real value.  Exit markets were also strong, both in IPOs and acquisitions, so investors did well and have significant funds to re-invest, although again, the valuations for new investments appear high.  New pharmaceutical products, notably the Hepatitis C and some cancer treatments, continue to push the edge of tolerable pricing, but there really hasn’t been a significant revolt or regulatory response, leading to phenomenal profits for these companies.  Tomorrow we will talk a little about what we might anticipate for 2015.