The healthcare landscape in 2024 presents some interesting challenges and opportunities, whether it’s in regards to generative AI or value-based care, according to executives at LRVHealth, a healthcare venture capital firm.
These executives shared five predictions for 2024 with MedCity News:
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1. Generative AI will become a reality: Generative AI will become more than “just hopes, dreams and pilot programs” in 2024, according to Keith Figlioli, managing partner at LRVHealth. The healthcare industry will start to actually put AI into practice next year. However, there will be some challenges, as well.
“We’ll see at least one event around bias or misuse of generative AI in clinical delivery,” Figlioli said. “Most healthcare companies aren’t applying generative AI to personal health information (PHI), but this event will expose the fact that there might be a few who are. This will force the industry to examine the appropriate clinical delivery use cases for generative AI in the future and may set the movement back by a few years.”
2. Medicare Advantage will continue to grow despite scrutiny: Concerns over the Medicare Advantage program will continue to rise, but enrollment in these plans will likely still increase, Figlioli predicted. More health systems will also form their own senior-focused clinical delivery arm/network for Medicare Advantage patients. These will compete with organizations like Oak Street Health and ChenMed.
3. Value-based care will transform: Value-based care companies — which are reimbursed based on value rather than volume — will “begin planning for a world that relies less on risk-adjusted topline expansion, and more on true medical cost management,” said Ellen Herlacher, partner at LRVHealth.
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“Many will realize that there are limits to what can be accomplished in an advanced primary care setting, leading to investments in referral management and site of care optimization, as well as the development of lower-cost healthcare workforces focused on access, care navigation, and healthcare literacy,” Herlacher continued.
4. Stakeholders will create innovative payment models for high-cost, curative therapies: The healthcare system will face challenges when it comes to paying for high-cost, “potentially curative” drug therapies, said Josh Flum, managing partner at LRVHealth.
“As more of these therapies are approved, and awareness around these drugs grows, payers and employers will be challenged to manage the tradeoffs between the high one-time costs and long-term benefits of these drugs under our current insurance model,” Flum added. “As a result, 2024 will be a turning point in the development of new innovative models – where drug payments could happen in installments or be based on achieving specific outcome milestones – requiring collaboration across employers, insurers, and pharmaceutical manufacturers.”
5. Digital health companies will need scalable models and strong leadership: The last year was difficult for the digital health industry, but it was more resilient than expected, according to Tripp Peake, managing partner at LRVHealth. In the year ahead, companies with scalable business models and excellent leadership will be the ones to excel and gain capital.
“Others will struggle and if they get capital at all, it’ll be at significant down rounds,” Peake said. “Despite the fervor over generative AI in the investment community – or the temptation for startups to put it someplace in their decks to attract investment – it’s going to be a difficult year for most as the market normalizes.”
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