Much has changed, for the better and for the worse. And much has stayed frustratingly the same.
Be that as it may, I can safely say that while I’ve seen a lot come and go in the healthcare field, I have never seen a landscape more precarious, more unpredictable, and more open to radical disruption than the one we have now. Hyperbole? Not really. Consider a few key points:
- As a nation, the U.S. spent $3.3 trillion—that’s 17.9% of the GDP—on healthcare in 2016 (the last year for which data has been published). Roughly one-third was private insurance spending, and much of the rest came from federal payors. Out-of-pocket individual spending accounted for $352 billion (11% of the total). Despite that, the U.S. ranks far below most other industrialized nations on most measures of public and individual health. That’s been true for years.
- Every day, roughly 10,000 Americans reach age 65—that’s over 3.7 million per year. There are already 5 million over age 85 in the U.S., and octogenarians represent the fastest growing demographic segment. Yet there are only about 2 million homecare workers. Those folks—mostly women, mostly immigrants—earn a median hourly wage just over $10 per hour; 30% are themselves on public assistance.
- The current political administration seems determined to undo the signature healthcare legislation of its predecessor, but so far has only partially dismantled segments of the law. Millions of Americans now live in insurance limbo; others are mired in a tangle of federal, state, and private bureaucracies. Practitioners wonder what Medicare and Medicaid—still the fiscal foundation of many a clinic—will look like in the future. All the while, the Fed pushes practitioners to “keep people out of the hospitals” (MACRA, pay-for-performance ratings, etc.) without really paying them to do the kind of medicine that could actually alleviate our costly disease burden.
- We now have extraordinary healthcare technology: diagnostic tools with unbelievable resolution; genome tests easily obtained for as little as $200; remote teleconsult platforms with potential to bring top medical expertise to the most remote regions; surgical techniques that turn once major operations into half-day outpatient procedures; self-monitoring devices that gather—and share—an astonishing flow of biometrics; implants and replacement parts that were science fiction when I was a kid. And then there’s gene editing. As we speak, scientists worldwide are applying CRISPR to tweak the genes of all sorts of plants and animals, including our own.
- One of the nation’s largest health insurance companies (Aetna) is now owned by one of the world’s largest pharmacy management companies (CVS/Caremark). Not to be outdone, the nation’s biggest retail chain (Walmart) is pondering the purchase of its own insurance titan (Humana).
- Amazon—the online retail juggernaut that has remade every industry it has touched—has joined forces with one of the world’s biggest banks (JP Morgan Chase) and the third largest publicly traded conglomerate (Berkshire Hathaway) to do “something” in healthcare.
- Apple—the company that first made computers hip and sexy—has announced its own healthcare initiative, and has already enrolled over 40 clinical networks—including NYU Langone Medical Center and Stanford Medicine—onto its electronic health records platform. (By the way, did you know that the Apple Watch is now the world’s most widely distributed cardiovascular monitor?)
- The best-paid health insurance CEO—Michael Neidorff of Centene—was paid $22 million in 2016, nearly 38 times what the best-paid medical specialists (orthopedic surgeons) earn, and 96 times the $210k income of a typical primary care physician. For reference, keep in mind that, according to the U.S. Census Bureau, the inflation-adjusted median personal income for an adult in 2016 was $31,099.
- The Internet has totally democratized health information, creating both unprecedented freedom and shocking vulnerability. Ordinary people now have more or less free access to the world’s medical literature. They’re sharing medical records and case histories with other like-minded patients. They’re rating doctors, hospitals, and treatments like they rate restaurants and vacation destinations. The opportunities for self-empowerment are great. So are the risks of data misuse. Does anybody really want Cambridge Analytica to access our genetic data?
As we work to plan Holistic Primary Care’s upcoming Practitioner Channel Forum (May 30-31 in Hollywood, FL) I’ve been pondering these trends, trying to put them into historical context, and draw out relevant predictions on how the massive consolidations, the explosion of technology, the increasingly untenable income disparities, the political uncertainty will affect practitioner-focused nutraceutical businesses.
We have no crystal ball or time machine, but guided by data from our annual practitioner surveys (the 2018 survey is fielding as I write) and data sets from other sources, we can certainly offer some meaningful perspective.
2018 Survey Preview
This year’s survey has been open for just over a week. We’ve got well over 200 respondents, and already the numbers are starting to tell some interesting stories.
Just for reference, roughly one-third of the respondents are MDs, 14% are nurses, 14% are naturopaths, 10% are DOs, and the rest represent a wide range of health professionals—chiropractors, nutritionists, RDs, acupuncturists, pharmacists, etc. They’re practicing in diverse settings; some take insurance, others don’t; half identify as “holistic” or “functional” medicine, the others are conventional allopaths or “integrative” practitioners. Two-thirds are women.
I’ll be sharing the full data set at the Forum, but here’s a quick preview of some interesting signals:
Health Coaches On the Rise: There’s been a lot of buzz about health coaches in medical circles lately. Many practitioner-focused brands are ambivalent about them; they recognize the rising tide, but since coaches are not licensable medical professionals in any state, some companies will not sell to them.
Our data show that the HPC community is quite warm on health coaches; 14% already work with them; 39% believe they bring strong clinical value, though they have no direct work experience with them; and 24% don’t know enough but want to learn more about health coaching.
Dispensing Supplements: Well over half of our cohort dispense supplements in their practices, and they’re using them to treat—yes, treat—a very wide range of clinical conditions. They’re clear that they want products free from heavy metals, artificial sweeteners, GMO ingredients, and allergens. Dosage form is also a critical determinant. They’re also very, very nervous about the presence of “SynBio” (synthetic biology) ingredients in the products they recommend or dispense.
Supplement Regulations: Two years ago, our survey turned up an alarming stat: 57% of all practitioners who dispense supplements had no idea what the Dietary Supplement Health and Education Act (DSHEA) was. We’re pleased to see that this number has diminished by more than 10 points, and that more clinicians are now aware of the regulations that govern our industry. That said, their opinion is none too high. So far, only 4% of the 2018 respondents feel DSHEA is adequate and effective in protecting public safety.
Views on Trump Administration Policy: Very few respondents hold a positive stance about the Trump administration’s healthcare moves. But many view “solutions” proposed by Democrats as equally ineffectual and irrelevant. A lot of practitioners see insurance companies as the major problem, and look askance at any political solution that keeps them entrenched. Fully one-third say they would prefer a single payer system.
We’ve got data on a host of important issues: practitioner perspectives on cannabis and CBD; their views on the Amazon and CVS deals; their engagement with healthcare IT and cutting-edge clinical tools like genomics; their most pressing clinical problems and unmet needs; their reasons for choosing or rejecting nutritional products; their experience with supplements and nutraceuticals for serious diseases like cancer, diabetes, and autoimmune conditions; their preferred modes of learning about and dispensing supplements and other health products.
Get Ready for the Age Wave
To my mind, there are two major trends that will have profound impact on all aspects of healthcare: the tsunami of senior citizens, and the entrance of major tech and retail companies into the medical space.
An estimated 43.5 million working-age Americans are trying to care for aged or ill family members, and 75% of them are trying to do it all on annual incomes of under $50,000. Keep in mind that Medicare does not cover in-home eldercare, and private long-term care insurance is expensive. We already have over 5 million Americans living with Alzheimer’s disease, and that’s expected to almost triple to 14 million by 2050.
All that disposable income that many people are currently spending on supplements, organic food, and other healthy living products? A lot of that could suddenly get diverted once a parent, spouse or other loved one reaches a certain age and starts forgetting to turn off the stove.
At the same time, the imperative to get healthy, stay healthy, and keep those around us healthy has never been stronger. That spells opportunity for our industry, not only in the cognitive sphere, but in many other aspects of health.
Silicon Valley Medicine
In the last few weeks, I’ve had a number of spirited debates about the potential impact that Amazon, Apple, and other tech titans will have on our sector. Some observers feel the recent moves are largely irrelevant—just further examples of corporate consolidations that will have little to no impact on either day-to-day medical practice or the nutraceutical industry.
I beg to differ. We already know that unauthorized direct-to-consumer sales of “practitioner-only” brands have had a significant impact on the practitioner channel value proposition. While it has not by any means clipped the wings of our vibrant sector, it is costing many companies a lot of time, money, and resources. It also makes it harder for the practitioners who depend on the income generated from selling supplements.
But the impact of Amazon’s entry goes far beyond the relatively small hit it’s dealt to practitioner-facing supplement brands. Amazon and its corporate partners are coming from outside the bastion of healthcare, and they bring a very different mindset to the field.
Amazon does two things very well: it gives people whatever they want, and it brings that to peoples’ homes, at their convenience.
Healthcare is just the opposite. The patient must go to the “provider” to obtain what, in many cases, is quite far from what they really want. Everything about old-school healthcare is designed around the doctors, the clinics, the hospitals, the administrators, and the insurance plans. The actual patients—the end users—are almost an afterthought. In short, Amazon excels at precisely the things at which healthcare sucks.
Amazon also abides by that most basic of business principles: make money by eliminating the middleman. It ravaged retail because, from a pure flowchart perspective, retailers are middlemen. So are practitioners.
In fact, healthcare is crawling with middlemen, up and down its ranks. If I were one of them, I’d be feeling nervous about the nation’s largest distribution business showing up in my little fiefdom, armed with vast capital, unfathomable amounts of data, and the AI capacity to crunch it.
Or look at Apple. Go into a Mac store; the entire experience is designed to be sleek and more or less enjoyable. The place is set up to move you from the front door to your first gaze at a shiny new screen with the fewest possible steps. And once you buy that dream gizmo, you’ll be able to figure out how to do 75% of what you want it to do all by yourself, with the barest amount of guidance. Flawless? No. User friendly? Absolutely. Can anybody say the same for anything about healthcare?
Even holistic and functional medicine is vastly more complicated, expensive, and burdensome than it ought to be. That’s because many of its practitioners—your customers—are still practicing within the frameworks of conventional medical models.
Amazon and Apple are both extremely customer-centric. “Patient-centricity” is something healthcare pundits talk about a lot, but seldom deliver.
I have no inside track on what Apple or Amazon-Berkshire-Chase are planning to do in healthcare. But I do know that the leaders of these companies are not “healthcare” people; they’re data-driven tech people who like applying advanced technology to solve complicated problems, and want to get paid really well for doing so. “Disruption” is their favorite word.
Will this all lead to better medicine for our ailing nation or is it simply another example of corporate greed and consolidation of control?
Will it prove transformative for ordinary, overburdened, rapidly aging Americans or just provide ever-bigger payoffs for those that already have much? How will this all affect doctors and other medical professionals?
It’s way too soon to answer any of these questions. But I’m betting good money that these companies—and others from outside healthcare—are going to rock long-established medical institutions, and rock them hard. For a while now, the mantra among Silicon Valley people has been, “Let’s Uber-ize healthcare.”
Business as usual won’t be business as usual for much longer.
We’ll be discussing these and many other trends and issues at the Practitioner Channel Forum. I hope you’ll join us. Learn more at www.TPCForum.com.
Holistic Primary Care
Erik Goldman is co-founder and editor of Holistic Primary Care: News for Health & Healing, a quarterly medical publication reaching about 60,000 physicians and other healthcare professionals nationwide. He is also co-producer of the Practitioner Channel Forum, the nation’s leading conference focused on opportunities and challenges in the practitioner segment of the dietary supplement industry.