Trump effect on health IT? New vendors, EHR consolidation, big data explosion
President Donald Trump’s administration is causing a lot of angst over healthcare policy but healthcare technology isn’t exactly lying in wait. In fact, most healthcare pros expect the pace of new vendor creation to pick up over the next two years.
The 2017 Healthcare Prognosis survey by capital venture firm Venrock found 60 percent of respondents expect the rate that new companies emerge to increase despite 35 percent saying regulatory changes could present challenges to innovation.
When it comes to electronic health records companies, 78 percent of respondents expect merger and acquisition activity to pick up as well, especially as giants like Epic and Cerner look for new revenue streams.
Though industry analysts have been predicting a wave of vendor consolidation for years now, the last big acquisition by a giant EHR company came in 2015, when Cerner acquired Siemens Health Services for $1.3 billion.
The survey, which polled 274 respondents from healthcare IT startups, large employers, insurance companies, healthcare providers, academics, government, investors and professional service providers, found that many health IT sectors could be immune to policy changes under Trump.
Only 16 percent expect changes to affect big data and analytics companies, 12 percent see policy challenges for telemedicine and 24 percent expect the administration to have an effect on EHR companies. That’s not the case for the insurance industry, which 62 percent will embrace regulatory challenges. Accountable care could also face a rough few years, the survey found, with 66 percent saying they expect policy to create challenges.
Big data firms could see the most opportunity in the next few years, the survey found, with just about every respondent saying they expect rapid or nominal growth.
Some companies, however, are more attractive than others, especially the startup realm.
According to the report, telemedicine platform Doctor on Demand is the most attractive to investors, with 42 percent saying they would invest in the company at its current $250 million valuation. Meanwhile, 37 percent would invest in concierge company One Medical, and 32 percent would invest in Farzad Mostashari's ACO company Aledade.
On the other hand, only 7 percent would invest in Oscar Health, an insurance start-up run by Jared Kushner’s brother Joshua Kushner that has lost more than $300 million between 2015 and 2016 selling its insurance on the Affordable Care Act exchanges.
While respondents expect tech company growth, they also see the first two years of Trump’s tenure having an effect on hospital consolidation. The survey found 53 percent expect the pace of hospital consolidation to speed up before MACRA fully goes into effect.