After The Curve:
An Analysis of the Changing Face of Healthcare
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In the same way that the events of September 11, 2001, suddenly and permanently changed the way we travel, the current Coronavirus (COVID-19) pandemic is suddenly and permanently changing the way we deliver, consume and pay for healthcare services in the United States.
Over the last few decades, we have struggled to find policy or market-based solutions to increase clinical quality while also reducing overall costs. Now, the COVID-19 pandemic has exposed additional systemic weaknesses in our fragmented, episodic approach to healthcare delivery and historical undervaluing of preventative and public health measures.
The pandemic has also opened doors to innovation, however, as industry participants mobilize crisis resources;
adjust operations for enhanced screening, sanitization and social distancing measures; and harness telehealth capabilities to deliver healthcare remotely.
For as much talk as there has been about “innovative disruption” in recent years, Mother Nature has proven to be a more effective disruptor and agent of change.
As communities begin to reopen, COVID-19 remains a virulent threat. While scientists race to develop a vaccine, most acknowledge that a “return to normalcy” will be a long process. Indeed, some things will never again be the way they once were. In the following pages, we highlight the challenges and opportunities that healthcare operators and investors should consider as the industry finds its way to a new normal.
Current regulatory changes have spurred additional innovation, including the integration of artificial intelligence systems into telehealth services, greater use of telehealth services in certain care settings, and more support overall from legislators and their constituents clearly seeing the benefits.
New tools will include methodologies to aggregate data, make that data smarter and adaptive to particular patients and patent conditions, then place it in the hands of both clinicians and patients to form a partnership for care delivery and management.
The future for data standardization is now; building fluid pathways for health information will reduce duplicative testing and enable enhanced data analytics for use in treatment, population health and research.
Telehealth offers several potential benefits for insurers, often moving care to a more cost-effective setting and improving geographic access to specialist services, but the evolving regulatory landscape will continue to shape coverage policies and contractual relationships.
Regulatory and Enforcement
Despite global economic uncertainty, the health, technology and life sciences sectors have converged with the investment community to innovate, collaborate and respond to unmet needs caused by the pandemic, like those for successful tests, treatments and vaccines.
The life sciences sector has been economically resilient during the turbulence of the pandemic, with biotech companies awash in more cash than ever before, record numbers of strategic collaborations and partnerships, and continued strong IPO activity.
As the world recognized the dominance China plays in the global supply of active pharmaceutical ingredients and their chemical raw material, the US has launched efforts to rebalance the supply chain. Similarly, exponential growth in the use of artificial intelligence to further speed drug discovery and development can be expected.
However, robust investor appetite persists, particularly among private equity funds sitting on considerable dry powder for new investment even prior to the pandemic. Credit markets also remain favorable for leveraged buy-outs, with current monetary policy promising low interest rates for debt financing in the near term.