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The healthcare industry is vastly underestimating the ripple effects of virtual medicine. Remember record stores?

2 Big Trends

Two big trends have altered the healthcare landscape over the last decade:

  1. 01


    This trend, started in the 1990s, has continued. Since 2000, the portion of physicians in private practice has declined from 57% to 33%. Physicians are attracted by the big buyouts and promise of less paperwork. Hospitals want to get bigger to increase their negotiating power with payers, and also to create a referral pipeline driving patients from primary care practices into the hospital’s bigger-ticket specialty practices.
    WHY IT’S RELEVANT: Physicians who switched to employment in the last decade may also be willing to switch again to new solutions, after their seven-year contracts expire and they become free agents.

  2. 02


    Now the majority of Americans with employer-provided insurance are not on a traditional insurance plan. Instead, their employer takes the risk and covers all health expenses, contracting with a third party to administrate. This is especially the case with big companies, for whom self-funding has risen from 62% to 91% since the year 2000.
    WHY IT’S RELEVANT: Self-funding companies are looking for new solutions. They’ve already demonstrated their willingness to switch if something better comes along. So as new brands and new types of insurance emerge, self-funded companies will be among the early adopters. Already, new companies like Collective Health are here for innovative companies, promising to make it much simpler to offer health, vision and dental through a single interface.

The result of these trends, however, is that in most major cities, there are four to eight vertically integrated empires that are essentially doing the same thing: competing with each other at every level, from primary care through specializations. The differences between them are not clear to consumers. They all promise similar services and features. They all claim to be the best place to be if you have a stroke, have cancer or have a baby.

The next decade will see this orderly vertical integration disrupted as healthcare migrates to virtual medicine.

  • Private Practices


  • Hospital Empires


  • Virtual Marketplace


There will be two main strategies to capitalize on the drastic change—get bigger, or get more agile.

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