The stunning outcome of the 2016 presidential election has left us long on questions and short on detail as to what this decisive win portends for healthcare markets in general and health IT specifically. Market impact will ultimately depend on how quickly Republicans are able to enact key healthcare reforms which will hinge on their ability to successfully work through Democratic opposition. On the morning after the most disruptive election in American history, what can we surmise about areas of IT that offer the greatest upside for growth during the coming months and years?
Trump’s healthcare plan will be focused on lowering costs and driving competition. He vows to repeal the Affordable Care Act and replace it with a free-market system based on patient choice and private insurance. Trump has said he wants to cover everyone but opposes an individual mandate to do so. He wants to reduce barriers to the interstate sale of health insurance, provide full tax deduction for individual insurance premiums, offer inheritable HSAs, stimulate drug price competition by allowing more overseas drug imports, allow Medicare to negotiate drug prices, and promote greater price transparency across all healthcare markets. Republicans advocate a “premium support model” for Medicare that would guarantee enrollees with an income-adjusted contribution toward a plan of their choice, with catastrophic protection. For Medicaid, Trump supports block-grants for states, replacing ACA subsidies for low income Americans.
Overall, we anticipate a market with many new challenges but expanding opportunities for innovative health IT vendors focused on key areas. The good news is that the basic trajectory of digitally-enabled healthcare transformation will stay the course so we can expect limited disruption in the need to continue investments in EHRs, RCM, cybersecurity, data analytics, population health management, and other core health IT solutions. And, once we have clarity on the Republican’s plan, we could expect to see these markets pick up steam in the latter half of 2017 as customers embark on new purchasing.
In terms of growth potential, we foresee three key health IT market segments that could emerge in a stronger position under President Trump – 1) health insurance IT especially health insurance marketplaces; 2) consumer health IT; and 3) telehealth. Health insurance exchanges will likely become increasingly important as states, employers and insurance carriers seek to streamline and improve benefits administration while enabling more consumer choice. HIX solutions are in line with Trump’s market-driven focus and we expect more start-ups and innovation in this area. Consumer health IT will continue to expand especially in areas that provide direct data and information to consumers about their own health status as well as new tools to drive consumer decision support to enable smart healthcare purchasing. In the event that many consumers lose their health coverage or end up with less comprehensive policies, we foresee an uptick in “DIY” solutions such as telehealth services provided directly or via channels like retail pharmacies.
About the author: Nancy has extensive experience conducting strategic healthcare market research for leading global management consultancies, healthcare corporations, and provider organizations. In her current role as Principal Analyst for Frost & Sullivan’s Connected Health practice, Nancy focuses on U.S. healthcare reform and the digital transformation of healthcare, including clinical and financial IT solutions used by healthcare payers, providers and consumers.