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Drive Innovation January 13, 2022

2022 Healthcare Predictions

Global Leader, Health and Life Sciences, Oliver Wyman
Key Takeaway
2022 Predictions: @OliverWyman's @SamOnHealth shares his outlook on #COVID19, #MentalHealth, #HealthIT, and more.

Last year in this space, we were hopeful that an end to the COVID-19 pandemic was within reach. Unfortunately, we find ourselves in the middle of another worldwide surge of infections, driven largely by the Omicron variant. Although news of spiking cases and hospitalizations is gloomy, recent data suggests that Omicron causes milder symptoms among vaccinated people than Alpha and Delta. Still, Omicron’s high rate of transmissibility requires that we become even more vigilant about improving vaccination rates globally, especially as last year’s hospital bed crisis evolves into this year’s healthcare staffing crisis. Currently, we are likely to fall short of the World Health Organization’s target of 70% of the population in every country being vaccinated by mid-2022. As of January 12, 59% of the world population had received at least one dose of the vaccine, but only 9.5% of people in low-income countries had gotten at least one dose.

Despite the pandemic maintaining its grip on virtually every part of the economy, there are areas where the healthcare industry can speed up innovation. We identified a handful these Opportunities in Motion during our 2021 Health Innovation Summit. And 2022 may be a year in which we see a few other disruptions become normalized. Here are five that we have identified:

1. Modernizing Pandemic Response

There’s cause for optimism heading into 2022, especially if the industry builds off the scientific advances from the previous two years. An unprecedented collaborative effort made it possible for rapid testing to take place at home and in outpatient settings, and for mRNA vaccines to move from the research stage to getting shots in arms. This level of innovation is leading to even more breakthroughs, as witnessed by the Food and Drug Administration’s Emergency Use Authorization of two antiviral pills designed to treat COVID-19. It’s also worth noting that researchers at Mayo Clinic, Memorial Sloan Kettering Cancer Center, Penn Medicine, and elsewhere are reporting accelerated advances in mRNA to treat various cancers.

Building on this collaborative spirit will be necessary as we prepare for the next stages of this pandemic, or the next one that emerges. But we must also factor in a response that addresses health equity, both domestically and abroad. In the US, several health systems tapped into data analytics and population health strategies to develop outreach efforts for ZIP codes that were disproportionally impacted by COVID-19. BioNTech and Moderna separately announced plans to build mRNA manufacturing plants in Africa. Steps like these will be essential to create a more holistic pandemic response for the future.

2. Addressing the Mental Health Crisis

The COVID-19 pandemic exacerbated a mental health crisis that was already straining the health system. More than 30% of adults reported symptoms of anxiety and/or depression in the fall of 2021, up from 11% in 2019. And in December, Surgeon General Vivek Murthy, MD, issued an alert warning of the “alarming number of young people struggled with feelings of helplessness.”

The rising demand for mental health services though is hampered by staffing shortages and insurance limitations. Respondents to the 2021 Oliver Wyman Consumer Health Survey listed a lack of appointment slots (41%) and an inability to find an in-network provider (39%) as the biggest barriers to getting care. We did, however, see an uptick in utilization of telehealth and other virtual services, especially among people 18-29 years of age. In that cohort, 20% downloaded an app or program that could provide support or care; 14% had a virtual visit with a mental health professional, according to our consumer survey.

Moving forward, we will redefine what mental healthcare means in order to make it more contemporary, relevant, accessible, and affordable.  The days of “lying on the couch” (or, more accurately, sitting in an office building at an appointed time) are numbered, to be replaced by text-, app-, and video-based care that is proactive and available when people really need it. And new entrants, incumbent providers and payers, and technology vendors will continue to integrate mental health services — whether virtual or in-person — with physical care.

3. From Health Tech to Tech

As 2021 came to an end, another mega-deal promised to reshape the health information technology space. Oracle announced a $28.3 billion acquisition of Cerner, the nation’s No. 2 electronic health record vendor in terms of market share, trailing Epic Corp. The deal continues a trend of IT companies looking to not only consolidate platforms but create enterprise-wide solutions.

Similarly, in 2021 Microsoft Corp. bought Nuance Communications with the aim of building out its cloud and artificial intelligence platforms. Additionally, Microsoft unveiled plans to integrate Teladoc Health’s Solo clinical data platform into its collaboration program, Teams.  

Big tech has been running at healthcare for some time and has often stumbled. But they’ll keep trying until they get it right, bringing their scale development platforms, product suites, and go-to-market industries to the single largest industry vertical: health.

4. Assessing PBM Consolidation

The M&A that swept across the industry over the past several years resulted in three main players controlling roughly 77% of the pharmacy benefit manager market — CVS Health-Aetna, Cigna-Express Scripts, and UnitedHealth Group’s OptumRx. Consolidation and ever-climbing drug prices have put PBMs under increased scrutiny from federal and state officials who are questioning some of their business practices, most recently spread pricing in Medicaid programs. The National Conference of State Legislatures tallied 46 laws being enacted last year in 27 states related to tighter regulation of PBMs.

At the same time, other industry groups are coming together to boost competition. That includes Evio, a for-profit pharmacy founded by five Blue Cross Blue Shield plans covering more than 20 million members nationwide. Evio could eventually allow the Blues plans to bypass working with legacy PBMs. Then there’s EmsanaRx, a PBM launched by the Purchaser Business Group on Health, as well as CostPlus Drug Company, which is funded by Shark Tank billionaire Mark Cuban.

It remains to be seen if these new ventures can disrupt the PBM market but attention on drug spending, which rose 7.4% in 2021 according to Mercer’s national survey of employer-sponsored plans, is sure to grow more intense as the mid-term elections approach. Vertically integrated companies will face mounting pressure to prove that the investments they are making in PBMs can lead to lower costs for patients and the health system overall.

5. Primary Care at Scale

During the company’s second quarter earnings call in August, One Medical Chair, CEO and President Amir Dan Rubin predicted that the then-pending acquisition of Iora Health would position the company to be “a premier national brand and healthcare organization.” The $2.1 billion deal closed in September and gives One Medical, which historically focused on commercially insured members, greater access to the Medicare population. Meanwhile, primary care provider VillageMD plans to use an infusion of $5.2 billion from Walgreens Boots Alliance to build more than 600 co-located sites with the retailer by 2025 and 1,000 by 2027.

Aggressive plays like these to gain scale and go national will continue in 2022, especially as consumers look for more convenient and accessible access points (and players figure out how finally to get to profitability). Competition won’t just come from venture capital-backed entities though. CVS Health, for instance, is expanding its primary care footprint, CEO Karen Lynch noted during her remarks at the 2022 J.P. Morgan Health Care Conference. The company plans to make the shift toward risk-based primary care and create multidisciplinary teams to coordinate care across the continuum.

Although they’ve carried the lion’s share of the load in terms of confronting COVID-19, incumbent providers and payers need to ensure they are positioned to adapt to these and other changes that are reshaping the nation’s healthcare system. Creating a more responsive and dynamic delivery model, in fact, will go a long way towards ensuring they are ready for the next crisis.

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