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Our 2019 Predictions – A Bit off Target

by Chilmark Team | December 04, 2019

We must have hit a batter’s slump in 2019.

In past years, our predictions of what is to come have resulted in well over a .500 batting average. In 2019 we fell to a paltry .385, which is considered a great batting average in baseball, but not so great for analysts’ predictions. Our biggest miss was what would happen in the IPO market. The jittery stock market at the end of 2018 had us thinking no IPO would materialize – instead we had four, successful, digital health IPOs and if you count Peloton, which we don’t, five.

Without further ado, our assessment of 2019 predictions:

Revenue cycle management M&A picks up; Optum acquires Conifer – MISS

Tenet’s attempts to sell Conifer were unsuccessful and they are now pursuing spinning-off Conifer via an IPO. In the RCM space, we saw little consolidation in 2019. Maybe 2020 will see a consolidating RCM market as it is a highly fragmented market, but then again maybe not. We won’t be holding our breath.

 

Alternative primary care clinics remain a side-show – HIT

Despite the press and general industry cheerleading, clinics such as Chen-Med, One Medical and Oak Street Health have seen only modest growth. Instead, we are seeing a rapid rise in interest by employers in using virtual care and continuation of standing up corporate campus clinics.

 

Humana finds a life partner with Walmart – MISS

Humana and Walmart remain partners but the relationship has gone no further.

 

Regulatory approvals for artificial intelligence-based (AI) algorithms accelerate, tripling the number approved in 2019 – HIT

There were 12 FDA approvals of AI algorithms in 2018 and we count at least 40 in 2019. This was quite likely the best prediction we made for 2019.

 

Choose wisely: 2019 sees the first major shake-out of DTC telehealth vendors – MISS

There has been some minor consolidation among niche telehealth vendors, but the stalwarts of DTC telehealth (actually B2B2C) including American Well, MDlive and Teledoc are each moving steadily ahead. Important to note though that Amazon introduced its own virtual care/telehealth service to its employees. Do not be surprised if this service rolls out into Haven (Amazon, Berkshire, JP Morgan partnership) in 2020.

 

Data science services see extraordinary growth, nearly doubling in 2019 – HIT

In retrospect, maybe “extraordinary” was too strong a word but the fact remains, all analytics vendors we have interviewed for our two recent analytics reports are offering dedicated data science services for their customers, which have been well received.

 

In 2019, healthcare organizations (HCOs) adopt a cloud-first strategy – MIXED

Healthcare organizations, by and large, have yet to adopt a cloud-first strategy. However, their health IT vendors have, as most have now introduced a go-forward cloud platform strategy for their core applications including Cerner’s intent to migrate their EHR Millennium to Amazon’s AWS and MEDITECH’s plans to move their EHR to Google Health’s platform.

 

New rules from ONC about data blocking have little effect because the business case does not change – HIT

This was easy as the rules have yet to be finalized and published, though we hear they are coming soon. The delay is not surprising as the proposed rules, released in March, generated a firestorm of comments from the industry.

 

Big tech companies’ intentions in healthcare do little to disrupt the delivery of care – HIT

Maybe we were not cynical enough on this prediction. We keep hearing over and over again how big tech companies such as Amazon, Apple and Google will upend the industry but to date, there has certainly been no disruption of the care delivery model. Instead, these companies seem to be getting assimilated by the healthcare Borg, offering cloud and AI services, or in the case of Amazon, a healthcare-specific voice transcription service for developers. Yawn.

 

Majority of MSSP ACOs stay and take on risk; hospital-led ACOs lead exits – MIXED

Despite loud protests that a significant percentage of existing MSSP ACOs would not migrate to the new “Pathways to Success” program, the July 1st enrollment saw 206 ACOs accepted into this new program, including 41 new ACOs. Where we got this wrong is that smaller, physician-led ACOs still struggle with taking on downside risk (predictability of risk). January 2020 enrollment in Pathways to Success is likely to see continued robust enrollment as it appears that most healthcare providers are getting more comfortable with accepting downside risk.

 

Closure of post-acute facilities shows no signs of slowing – MISS

Certainly, changes in CMS reimbursements have affected the post-acute care facilities market and home-based services continue to rise. However, these changes have not been severe enough to dramatically impact the market to lead to twenty percent closure or merging of such facilities in 2019.  Simply put, the needs of the elderly, the silver tsunami of baby boomers and the tepid increase in remote patient monitoring and care have left ample opportunities for these facilities to continue, though their days are numbered.

 

2019 Health IT IPO market fails to materialize – MISS

This prediction was written at the end of 2018 when the stock market was spastic. The market calmed down in early 2019 leading to the most healthcare-centric IPOs in years with Change Healthcare, Health Catalyst, Livongo, and Phreesia having successful debuts.

 

Elon Musk reinvents healthcare – MISS

While we discussed internally at length as to whether or not Musk had a nervous breakdown in 2019 (he did have some rather erratic behavior) the fact remains, he did not tackle and solve the ills of America’s dysfunctional healthcare system

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