2020 Healthcare Prognosis

As we all entered January 2020, many years into a historic bull run along (too?) many dimensions, few of us (well, maybe Stephon Marbury) had any idea what the next 4 months would bring. We have all had to adapt, finding resiliency and grace in the face of uncertainty and adversity. We have had to throw out the old playbook.

That includes our annual survey on the biggest news, trends and challenges facing the healthcare industry. We issued our survey on February 24, 2020, and over the course of the 2 week response period, the world began internalizing that COVID-19 would become a global pandemic, forever changing our everyday lives and dramatically altering the economy.

A bunch of the survey responses were “same old, same old”: Haven would not do much (who knew how right that would be); there would be more talk than action on drug prices; people are enamored of Farzad’s bow tie and epidemiology prowess… There was, however, a dramatic change in sentiment regarding COVID-19 and the economy over the course of the survey. As a result, we broke with tradition and issued two follow-up surveys in late March and April in order to track the rapidly changing sentiment elicited by COVID-19. These include timelines for a vaccine and drug treatment, stark economic predictions and questions about the virus’s impact on the upcoming presidential election and returning to work.

Our commentary on the most interesting findings is presented below, followed by the full results from all three surveys. Many thanks to the hundreds of people who took the time to share their views and opinions.

I. REALITY SETTLES IN

The grim reality of COVID-19 set in over the course of our surveys as deaths quickly and materially surpassed initial predictions.

THE ONLY PROBLEM?

In the first survey, coronavirus barely outpaced opioids and hospital pricing as the #1 or #2 problem to address, while a full one-quarter of respondents cited it as the least urgent problem.

* For this question, we combined respondents’ most urgent and second most urgent responses.

GRIM PREDICTIONS

We all have been behind the curve on COVID and as a result keep revising the projected 2020 death toll upward. In our initial inquiry, only 8% of us felt there would be greater than 10,000 deaths... WOW... Super wrong… By survey 3, 84% of respondents predicted 100K-1MM deaths from COVID-19 in the U.S.

FUTURE OF HEALTHCARE IT

Economic uncertainty doubled (though we would argue it got a lot more certain... and a lot worse…) while talent concerns dropped by half. With the steepest job losses since the Great Depression, the war for talent is history. Now it’s the battle to get hired, even in healthcare — the layoffs in March marked only the fifth month in 30 years that the industry has shed any jobs at all.

Not surprisingly, when asked to predict the number of healthcare IT IPOs in 2020, 92% expect fewer IPOs in 2020 in survey 2, compared to 64% in survey 1. The stock market apparently has not yet gotten the memo...

HOPES FADE FOR A NEAR-TERM TREATMENT

With so much talk about treatments (please don’t drink bleach) and vaccines for COVID-19, we asked our respondents to weigh in on when these dreams would become a reality. The world is learning what it means for a vaccine to be not only effective, but also broadly available, leading our respondents to hedge their predictions a bit over the course of our inquiries. Some of the most encouraging treatments involve plasma transfusions from recovered patients, yet confidence that an effective drug treatment will be available soon waned.

II. ECONOMICS CRASH COURSE

With skyrocketing unemployment numbers, shuttered businesses and for a time, negatively priced oil, the pandemic has ushered in new economic realities.

GDP WOES

In survey 2, only 47% of our respondents think U.S. GDP growth will decrease by more than 2% in 2020, while the actual GDP in Q1 2020 decreased 4.8% and consensus estimates for FY 2020 are currently negative 4-5%, showing either a difference of opinion on second-half economic strength or a reflection of more optimistic times a mere eight weeks ago.

STOCK MARKET RALLIES

The stock market has been volatile, but when asked how many years of Dow Jones growth will be erased by this crisis, our respondents in survey 2 have yet to be proven right as the equity markets have proven surprisingly robust. We feel pretty good about this one, but will ask again next year to close the loop.

HEALTHCARE IMMUNITY?

Nearly half of our respondents (47%) in survey 3 think their business will be unaffected by the pandemic. Is there a selection bias in healthcare or are people’s heads in the sand?

III. A NEW NORMAL

As many states begin a phased approach to reopening, we asked our respondents about the future, post-pandemic.

HEALTHCARE SHORTAGE?

While we’ve heard the jokes about more babies and divorces, our respondents caution that the pandemic will lead to a shortage of healthcare workers. Ironic, because healthcare saw steep job losses (1.4 million) in April due to lost revenue from fewer elective and routine procedures.

TELEMEDICINE’S SHINING MOMENT

Telemedicine was a consensus bet before the pandemic… though one-quarter of respondents think the telemedicine surge is a 12 week fad. The majority also believes that telemedicine will become a permanent part of healthcare thanks to loosened restrictions for Medicare and Medicaid populations.

PRESIDENTIAL RESPONSE?

The majority of our respondents think the pandemic will help swing voters to Biden, but there’s a long time before November. Many also predict a results delay from mail-in ballots and more voter no-shows thanks to heightened anxiety around going to the polls.

GROUNDHOG DAY... AGAIN

Grab your sweatpants, sourdough starters and toilet paper rolls, the majority of our pundits think this is a 2-3 wave problem, perhaps modeling the 1918 Spanish flu with a tail into 2021.

OUT OF OFFICE

Our respondents predict that many companies will continue working remotely until a vaccine is available (or longer), but for others, staggered days in the office and temperature checks at the door will become the norm. Only 11% predict that employers will require antibody testing, yet Amazon is working to build a testing lab on campus for employees and other large employers are discussing testing strategies to ensure the safety of their workers.

Full Survey Results

Respondents from health IT startups, large employers, insurance companies, healthcare providers, academics, the government, investors and professional service providers conducted the three surveys during the timeframes listed below:

Survey 1: February 24 – March 6, 2020
269 respondents

Survey 2: March 22 – April 3, 2020
294 respondents

Survey 3: April 28 – May 6, 2020
320 respondents

If you would like to view the results of our previous surveys, you can find them here:

2019 Healthcare Prognosis

2018 Healthcare Prognosis

2017 Healthcare Prognosis

SURVEY 1 February 24 - March 6, 2020

1
How will the results of the 2020 Presidential election impact the future of the U.S. healthcare system?

31% Positive changes are coming
54% It won't matter
15% We will travel to Canada for healthcare

2
Which of the following are the largest challenges to healthcare IT innovation in the next 12 months?

37% Talent/hiring
40% Regulatory changes
43% Economic uncertainty
20% Competition
21% Funding

3
Will prescription drug prices be curtailed in the next four years?

11% Yes, meaningfully
75% Only a little, with WAY more talk than action
4% Yes, voluntarily by pharma
10% No, nothing will happen

4
The industry is about to face a backlash for violating patient trust and privacy by harvesting and reselling client data:

47% Agree, there will be consequences
53% Disagree, nothing will happen

5
Do you like the below HCIT segment more or less than in 2019:

  Accountable Care Organizations
54% More
46% Less
  Wearables / Consumer Sensors
47% More
53% Less
  Insurance
49% More
51% Less
  Telemedicine
75% More
25% Less
  EHRs
30% More
70% Less
  Digital preventative care programs / wellness
59% More
41% Less
  Analytics and big data
80% More
20% Less

6
There will be ______ HCIT IPOs in 2020 (1 to date) than in 2019 (5 total)

36% More
64% Fewer

7
Which of these companies will go public in 2020? Select all that apply.

43% Accolade
12% Agilon
28% American Well
25% Bright Health
18% Clover
42% GoodRx
23% Grand Rounds
12% MDLive
26% Oscar
8% Other (please specify)

8
If you had $250 to short these public companies at their current valuations, how would you allocate it?

  Castlight
17% $0
40% $50
26% $100
7% $150
0% $200
10% $250
  Livongo
8% $0
37% $50
33% $100
13% $150
6% $200
3% $250
  One Medical
14% $0
33% $50
27% $100
16% $150
2% $200
8% $250
  Phreesia
27% $0
49% $50
19% $100
3% $150
3% $200
0% $250
  Progyny
16% $0
56% $50
20% $100
7% $150
0% $200
1% $250
  Teladoc
17% $0
46% $50
23% $100
9% $150
1% $200
4% $250

9
Will there be a crackdown in direct-to-consumer prescription companies such as Hims, Roman, Nurx and Lemonade?

38% Yes
62% No

10
What effect will the travails of Softbank have on the healthcare IT ecosystem?

34% Put downward pressure on valuations
15% Squeeze late stage funding
4% Increase the number of startups going public or getting acquired
47% Nothing, there is so much capital available that it won't matter

11
In 2020, Juul will end the year:

3% With all flavored products banned
31% With new regulatory constraints on marketing
55% Both A and B
11% Growing faster than ever

12
In 2020, Amazon will (select all that apply):

53% Launch a PBM and a rapidly growing pharmacy business
31% Launch an Alexa-style diagnosis chat bot
38% Buy healthcare services businesses (e.g., primary care, tech-enabled disease management companies)
59% Primarily focus on selling AWS to health systems and payors

13
Haven’s post-rookie / junior season results will be:

58% A few small and little-noticed pilots
5% A big bang of actions that are surprisingly innovative and ambitious
37% Marred by delays and founding partner politics

14
Which of these problems is the most urgent to address?
1 = Most urgent
4 = Least urgent

  Coronavirus outbreak
53% 1
13% 2
10% 3
24% 4
  Opioid epidemic
18% 1
40% 2
26% 3
16% 4
  Prescription drug prices
11% 1
25% 2
33% 3
31% 4
  Hospital prices
20% 1
22% 2
30% 3
28% 4

15
Total U.S. deaths in 2020 from the novel coronavirus will be:

8% 10
24% 100
43% 1,000
16% 10,000
8% Greater than 10,000

16
What, if anything, will quell the opioid epidemic in 2020?

7% Digital treatment solutions
35% Policy change
21% Better integration between EHRs and prescription drug monitoring programs (PDMP)
37% New and effective non-addictive pain medications

17
Who is the best Founder CEO in the HCIT ecosystem?

8% Farzad Mostashari
8% Todd Park
7% Ed Park
6% Jonathan Bush
6% Sami Inkinen
5% Judy Faulkner
4% Owen Tripp

18
Which category best describes your employer?

21% Healthcare IT provider
6% Large employer
8% Insurance
10% Healthcare provider
2% Academia
1% Government
26% Investor
12% Professional services
14% Other (please specify)

SURVEY 2 March 22 - April 3, 2020

1
When will there be an effective (largely solves mortality) drug to treat COVID-19?

53% 2020-21
40% 2022-23
7% More than 5 years

2
When will there be a broadly available and effective (prevents infection) vaccine for COVID-19?

44% 2020-21
52% 2022-23
4% More than 5 years

3
How many years of Dow Jones growth will be erased by the end of this crisis [high was 29,551.42; we are hovering around 18,800 now]?

32% 3 years [17,927.11 in 2016]
50% 5 years [16,777.69 in 2014]
16% 7 years [12,966.44 in 2012]
2% 10+ years [below 10,668.58]

4
For the full year 2020, the U.S. GDP will be…

14% >0%
39% 0 to -2%
47% Below -2%

5
The pandemic will spur... [Select all that apply]

36% Massive investment in inter-operability of real time healthcare data
24% Massive construction projects to increase hospital bed and ICU bed surge capacity
54% Shortages of healthcare workers that are felt into 2021
69% A surge in innovation to make better and cheaper life-saving technologies, such as respirators and protective gear for healthcare providers
55% More babies and divorces
60% Lead to permanent changes in the U.S. around medical licensing and enable clinical practice across state lines
15% All of the above

6
What does the future of telemedicine look like? [Select all that apply]

57% Will replace a large amount of office-based primary care visits, driving massive growth
26% Will be trendy for 6 months and then return to normal usage rates
72% Will be made permanent parts of the Medicare and Medicaid programs

7
There will be ______ HCIT IPOs in 2020 (1 to date) than in 2019 (5 total)

8% More
92% Fewer

8
There will be ______ U.S. deaths from COVID-19 in 2020.

6% Under 10K
34% 10-100K
55% 100K-1MM
4% 1MM-10MM
0% More

SURVEY 3 April 28 - May 6, 2020

1
Which of the following are the largest challenges to healthcare IT innovation in the next 12 months? [Select all that apply.]

15% Talent/hiring
18% Regulatory changes
84% Economic uncertainty
7% Competition
34% Funding

2
When will there be an effective (largely solves mortality) drug to treat COVID-19?

39% 2020-21
52% 2022-23
9% More than 5 years

3
When will there be a broadly available and effective (prevents infection) vaccine for COVID-19?

31% 2020-21
63% 2022-23
6% More than 5 years

4
There will be ______ U.S. deaths from COVID-19 in 2020.

14% 10-100K
84% 100K-1MM
2% 1MM-10MM
0% More

5
How will the pandemic influence the Presidential election? [Select all that apply]

13% Swing voters to Trump
64% Swing voters to Biden
34% Voters don’t show
45% Results delay due to massive mail-in
34% Longer voting timeframe to allow for social distancing and disinfecting of voting sites
3% No impact

6
How many periods of shelter-in-place will there be until the pandemic is classified as contained?

9% 1 – We’re in it now
46% 2 – There will be a wave in the fall
32% 3 – This will continue into next year
13% 4+ - It’s going to be a long haul

7
How will businesses return to “normal” once shelter-in-place orders are lifted? [Select all that apply]

85% Staggered amounts of people allowed in the office at one time to encourage physical distancing
56% Temperature checks before entry
88% Continued remote work for majority of workers, decrease dependency on physical office
11% Mandatory antibody testing before reopening

8
What measures have you taken to reduce spend as a result of the pandemic’s impact on your business? [Select all that apply]

25% Layoffs or furloughs
44% Reduced marketing spend
26% Pay cuts
7% Changes to benefits
47% My business will be largely unaffected