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What’s Up for 2019

By January 2, 2019Commentary

I am avoiding the word prediction, and using the more euphemistic “observation” now.  Here are my reactions to my very untestable observations on 2018.  I said spending growth would be muted and it was.  I said there would be more consolidation and there was.  Congress did nothing about Medicare or Medicaid spending, but some states did move to put limits on Medicaid eligibility, especially by adding work requirements.  Gee, what a concept, you might have to act responsibly to get a government handout.  I thought high-deductible plans would continue to grow, but some employers appear to be rethinking them.  Must be cooking up some other way of transferring costs to employees.  I said digital health might begin to fall out of favor, but even though the research continues to show no real benefits at all, money keeps going to the hype.  And for once I said we wouldn’t see a recession and we didn’t, but the better economy and personal income growth doesn’t appear to have lessened consumer concern about health care costs.

Here are some “observations” about what might happen in health care in 2019.  I think there will be some more meaningful action on drug prices, which will be the industry’s own fault for failing to control its excesses.  This is not really a good thing, and may lead to even more regulatory control, which is never, never, never good–no one is smarter than the market.  I think the economy will be strong again, we likely will see trade deals that help remove a concern that has hindered growth (assuming the new House isn’t stupid enough to fail to ratify them, oh wait, forget the trade deals after all).  But voters will still be anxious about health costs.  The House, because it is now full of geniuses who don’t even know what the three branches of government are, will try to pass Medicare for All, but thank God for the Senate, and when people see the real price tag and other features, they will be a lot less fond of the idea.

Consolidation will be ongoing, but no huge deals, since those have pretty much all been done.  The real damage is at the local level, where choice among providers and health plans will continue to to diminish.  While there are no warning signs yet, at some point I think this consolidation will result in price increases that raise premiums and costs to consumers.  But I expect spending growth in the 3-4% range again next year.  No action to deal with the Medicare and Medicaid spending deluge, because we the people and our politicians are too gutless to get real about the problem.   Innovation in medical treatment will occur largely among cell and gene therapies, immuno-oncoloy and some device areas.  One potential hope for the system in the next five years is that there may be curative, non-chronic treatments for disease like diabetes and hypertension.  That would take a fair amount of repetitive spending out of the system.  Even better would be effective treatments for Alzheimer’s and other forms of dementia, which currently are leading therapeutic categories for spending.  But a lot of funding will keep going to “digital health” and other nice sounding concepts, which will continue to elude any proven benefit.

Have a great 2019 and be skeptical out there!!

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