Cheaper Healthcare is Coming

But you're going to have to embrace these changes

I had a service-based business owner tell me once that you can have your service completed in 3 ways. You can have it done well, you can have it done cheap, and you can have it done fast. But you only get to choose 2. If you want it fast and good, it probably won’t be cheap. If you want it cheap and fast, it probably won’t be good. If you want it good and cheap, it probably won’t be fast.

This is no different for non-emergency healthcare settings. You want the best provider possible and have answers quickly. It’s not going to be cheap. You want the best provider and want it cheap (just your co-pay), well, the next appointment isn’t for 6 months out.

But you want all 3. You want great quality care, you want it delivered in a relevant time frame (not having to wait 4-6 months), and you don’t want to have to pay $30,000+ out of pocket every year just for access.

In 2024:

The average annual premium for a family was $25,572 ($2,131/month).

The average annual deductible for a family was $10,310.

For you to "use" your insurance, you have to pay over $35,000 for benefits to kick in.

Then, when benefits do kick in, does this mean you pay nothing? No. You still have co-pays for each office visit, and most procedures have a percentage that you're responsible for paying.

If you want all that, I have some potential good news. I think it’s going to happen, and I would guess it's going to happen over the next 5 years. But there’s a catch. You’ll have to embrace 2 significant changes.

CORPORATE TAKEOVER

Healthcare is big business, and non-healthcare entities want a piece of the action more and more. They are sick of the monopoly created between Big Insurance and Big Pharma. If you have ever seen an Oak Street Health clinic, CVS owns them. Amazon has purchased many individually owned primary care clinics and branded them as Amazon One Medical.

The veterinarian industry is already seeing this with Mars Inc. owning a significant number of vet clinics. They may look like your local mom-and-pop vet clinic, but they have corporate ownership by the company that was made famous for products like Snickers, M&Ms, Twix, Milky Way, and Skittles. Pertaining to the veterinarian industry, Mars Inc. produces a ton of pet food brands like IAMS, Pedigree, and Royal Canin. Within those clinics, they also have a lot of diagnostics.

This is the template for non-medical corporations to get into the healthcare game. It’s not just patient care that can make them profits, I foresee them also putting diagnostics like lab testing and pharmacies under the umbrella so they can capitalize on all points of entry and exit within patient care.

Instead of using insurance, you would have a monthly membership to that corporate clinic. In theory, you have faster access to a provider, you can get imaging, lab testing, and pick up your medications all in the same visit. With enough consumer demand, I’m sure it could have add-on features to things like physical therapy, chiropractic, counseling, etc.

Which corporations? I don’t know, but think of the big guys that already have a high user base, like Apple, Costco, and tech companies like Oracle, Microsoft, and maybe even Alphabet (Google).

Will the local, private provider be completely wiped out? No, but in the vet industry, these corporations come in and offer the owner 5 - 10X their top line revenue to sell. Typically, a clinic owner would be hopeful to sell to another provider for 2-3x EBITDA (profits), if they are able to sell at all.

Most solo practitioners like me never sell the business. The reality is that we don’t run a business, we just own a job for 30-40 years and close shop when our time is up. Maybe there’s some equipment to sell, but I’m in the relationship business, and you can’t sell a relationship. So, to be offered 5-10X top-line revenue (not just based on profits), it’s stupid not to take it. That can be life-changing money.

This corporate-owned shift can potentially solve the speed and cost issue. You’ll be able to get and be seen quickly. This has the potential to reduce an individual’s healthcare costs because instead of the delivery of services being dependent on deductibles, premiums, and co-pays, you would instead have a predictable monthly membership fee. That eliminates the administrative waste of dedicated staff being on the phone for hours trying to get approval from the insurance company. For non-emergency type healthcare, this could potentially eliminate the need for regular insurance, and you just keep catastrophic care.

This can also be a major player in employer healthcare circles. Instead of your company paying Blue Cross or Aetna for coverage as part of your benefits package, they contract with a corporation like this for direct-to-employee care and have a clinic on site for employees. Many manufacturer-type businesses already have this, but if there’s a shift back to on-site working instead of work from home, don’t be surprised if this is the norm.

ARTIFICIAL INTELLIGENCE

Don’t think of artificial intelligence replacing your doctors with robots. Think of artificial intelligence in terms of real-time data collection. Most people are relying on their annual visit to determine if they are still “healthy.” I could see the corporate-style clinic using wearable technologies to collect data on you from activity levels, sleep patterns, cardiac output, and other vitals to get real-time data that can dictate changes in recommendations in real time. Don’t be surprised if a monster tech company buys out a company like Oura or Whoop, since they are already doing this data collection from willing participants. Apple is already doing this with its standard health app.

Let’s say the corporate entity is a financial institution like Capital One or JP Morgan. They could look at all the data on what a family buys in terms of food based on credit card/debit card sales. Now they can extrapolate data concerning nutritional buying habits of their customers and match that to health outcomes data. This could really shift the nutritional recommendations game, instead of the standard we have now, of observational data, where most research is asking people what they ate in the past.

They could have real-time data on those taking certain medications and the impacts on quality of life. There’s a potential that they look at the data and it shows that taking XYZ medication does nothing to improve the outcomes of ABC condition, despite the “FDA approval.”

I see the potential positives of these two shifts in that they could take the power and control out of the hands of Big Pharma and Big Insurance and put you more in the driver’s seat. I see the potential for these shifts to drive down costs for diagnostics like imaging and lab testing. For those that are on medications, I also see a potential to drive down pharmaceutical costs since the corporations would most likely have the pharmacy under their roof instead of needing it from a 3rd party.

The catch for having healthcare that hits all three buckets of fast, cheap, and good is that you’re going to have to adapt to the delivery of it. The relationship aspect of healthcare will most likely suffer. There will still be hospitals, and there will still be private, solo clinics. I just foresee primary care-type services having a major shift. Something has to change. The current rate is going to bankrupt our nation.