In this article, written by Emily Clark, Shubham Singhal, and Kyle Weber, they discussed the future of healthcare.
While the consumption of healthcare services will likely continue to grow, it is unclear that industry profit pools will expand over the next three years given the impact of the COVID-19 pandemic. Healthcare players who develop new and innovative business models will create disproportionate value in this environment, even as they face long-term challenges.
The next three years are expected to be less positive for the economics of the healthcare industry, as profit pools are more likely to be flat. COVID-19 has led to the potential for economic headwinds and a rebalancing of system funds. Current unemployment rates (6.9 percent as of October 2020)3 indicate some individuals may move from employer-sponsored insurance to other options. It is expected that roughly between $70 billion and $100 billion in funding may leave the healthcare system by 2022, compared with the expected trajectory pre-COVID-19. The outflow is driven by coverage shifts out of employer-sponsored insurance, product buy-downs, and Medicaid rate pressures from states, partially offset by increased federal spending in the form of subsidies and cost sharing in the Individual market and in Medicaid funding.
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