Throughout 2020, we spent much of our time working with members to think through what the world beyond COVID would look like, and what that would mean for health system strategy. We came to believe in what we described as a “90 Percent Healthcare Economy”, in which a protracted downturn in the economy and persistently high unemployment, caused by the pandemic, would lead to a secular decrease in demand for care.
Our hypothesis was that economic instability and pressured household and business budgets would force a broader rethink of how much and what kind of care services consumers and employers would be willing to purchase—as a host of lower-cost virtual and outpatient care offerings proved viable substitutes for higher-cost care. Just as retailers, airlines, hotels, and commercial real estate firms would be left short of the levels of demand required to maintain pre-COVID operations, we anticipated the same to be true for traditional hospitals and physician practices. Not all the business would be coming back, and what did return would come with higher expectations for care in safer, more convenient settings (including virtual).
On balance, we’d still argue that’s the most likely future scenario. But some of the environmental factors driving that hypothesis have changed. Vaccines have arrived sooner and with more promise of immunity than earlier anticipated. A change in control of the White House and the Senate looks likely to usher in a more forceful response to COVID, with more robust stimulus to the ailing economy. And—for better or worse—consumers have proven more eager to return to the public square than economic forecasts (and common sense) would have dictated.
Given the level of pent-up demand for “living a normal life”, the extraordinary amount of government money being pumped into the economy, and the real possibility of achieving herd immunity later this year, we may be headed into “The Roaring ‘20s” instead of “The 90 Percent Economy”. Rather than constrained economic activity, we could well be in for a period of explosive economic growth across the next several years.
Only time will tell which vision of the future is correct—indeed, both may be true, or may alternate as the COVID situation shifts. Best then, to plan for either outcome, and the strategies and approaches that will enable success in either world. Foremost among them: a relentless focus on delivering real healthcare value to patients and consumers, with care that is accessible, affordable, reliable, and personalized to each individual’s needs. That’s a future world we’d love to live in.