2021 Outlook: A New Administration, a New Year, and New Opportunities for Health Care and Life Sciences | Deloitte US has been saved
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By Asif Dhar, M.D., US Life Sciences & Health Care leader, Deloitte Consulting LLP
We are engaged in a fight against a virus that may prove to be as deadly as any enemy this country has ever faced. In the US, about 80,000 COVID-19-related deaths were confirmed in the first month of 2021, and more than 460,000 have died since the pandemic began.1 In less than a year, the death rate from COVID-19 has surpassed the 405,000 Americans who gave their lives during World War II.2 However, despite the emerging challenges we face with variants of the virus, we began 2021 with an arsenal of powerful weapons (e.g., vaccines, therapies, testing, contract tracing). Combined with non-pharmacological interventions (e.g., mask wearing, hand washing, and social distancing), I feel we will begin winning more battles, and eventually the war.
The world can change after a war…sometimes dramatically. For example, the health care system that we have today emerged after World War II. To limit post-war inflation, the federal government instituted wage-control over employers. Competition for workers was fierce and companies began to offer health benefits, which were exempt from wage control and income tax.3 The nature of work also changed after the war as more women entered and stayed in the workforce.4
The life sciences and health care sector, and the nation, is on a new war footing today. I suspect we will see dramatic changes to the health care system—and the way we work—in the aftermath of our war against COVID-19. Health and well-being will likely become more integrated into our work and personal lives, similar to the way digital technology has found its way into nearly everything we do. I’m optimistic that health care and life sciences companies can help push us past our rigorous but rigid systems of care delivery in the year and years ahead.
Four forces will likely drive change in health care and life sciences
We expect four forces will likely combine to alter our existing health care system in revolutionary ways:
1. COVID-19 as a catalyst: We began 2021 with two vaccines that were granted Emergency Use Authorization by the Food and Drug Administration (FDA).5 As many as 10 other vaccines are being tested.6 By the end of January, more than 26 million doses had been delivered, and 1.4 million (the current 7-day average) were being administered daily. Containing the COVID-19 pandemic is the top priority for the new Biden administration, as my colleagues Anne Phelps and Sarah Thomas noted in their February 2 blog. In the weeks and months ahead, I expect we will see increased federal investment and heightened coordination from states for testing, vaccination, and public health communications.
The pandemic has been a catalyst for profound changes in health care and life sciences over the past year. For example, virtual health visits are moving into the mainstream, and life sciences companies are seeing the value of virtual clinical trials. We don’t expect clinical trials will ever be fully decentralized or completely virtual, but some aspects are likely to become more patient-centric and virtual. However, the progress we’ve seen in virtual health could begin to slip without policy, regulatory, and payment reforms.
2. Health equity: Last summer, my colleague Dr. Kulleni Gebreyes and I explained that recognizing racism as a public health crisis is the first step in addressing inequities in the health system. The nation-wide protests prompted by last summer’s killing of George Floyd—combined with the disproportionate impact COVID-19 has had on low-income Black and Latinx communities—has led to a new dialog about the importance of health equity. While Black Americans make up 12% of the population, they account for more than one-third of deaths related to COVID-19, according to the Centers for Disease Control and Prevention (CDC). Moreover, each year up to 80% of clinical outcomes are impacted by drivers of health (also known as the social determinants of health). These factors, which tend to disproportionately affect communities of color, include food security and nutrition, education, accessible and safe housing, employment, and transportation.
In the health care sector, we could see an expansion of the Affordable Care Act (ACA). For example, in response to an Executive Order from the White House, the Department of Health and Human Services (HHS) announced HealthCare.Gov would begin a new special enrollment period on February 15. The administration has also proposed creating a public insurance option in the federal ACA exchanges. This option would be available to all individuals, including those who have access to health insurance through their employers. It would be free for some individuals, including Medicaid-eligible individuals in states that opted not to expand Medicaid eligibility (as called for by the ACA).7
We expect health care and life sciences sectors, along with government agencies, will make health equity a priority and further refine their strategies around diversity and inclusion. In January, then-President-elect Biden announced that he had asked Dr. Marcella Nunez-Smith to head a new federal taskforce on health equity. Nunez-Smith was associate professor of internal medicine, public health, and management at Yale University.
As my colleague Mike Delone noted in his 2021 Outlook, “life sciences companies have much to gain by developing products for more diverse populations.” In November, the Advanced Medical Technology Association (AdvaMed) issued a set of principles to guide the industry in addressing racial health disparities.8 The organization is urging its member companies to promote inclusion and equity in health care and promote research equity in the medtech industry. The Pharmaceutical Research and Manufacturers of America (PhRMA) released principles that seek to narrow health disparities and enhance "information about diversity and inclusion in clinical-trial participation." Large companies such as Merck have worked with other corporate leaders to create efforts such as OneTen—a coalition of leading CEOs and organizations. OneTen intends to combine the power of American companies to upskill, hire, and promote 1 million Black Americans over the next 10 years with opportunities for advancement. Life sciences and health care organizations are also making strides to improve diversity and health equity in the communities they serve and within their own organizations. In 2021, I expect equity will become a core component in nearly everything we do.
3. Accelerating Future of Health: It has been two years since Deloitte published Forces of change: The Future of HealthTM, which provides our perspective on how the business of health will transform by 2040. Since that publication, COVID-19 has accelerated many of the changes we predicted would emerge over the next 20 years. At last month’s annual J.P. Morgan Healthcare conference, a panel explained how investors and innovators were positioning themselves for the Future of Health. Rather than a bubble, they agreed that investors see the post-pandemic era as the beginning of a multi-year opportunity. Venture funding for health-tech reached record levels in 2020, according to data from research firm Mercom Capital Group. And there are no signs that the pace will slow.
During a panel discussion at last month’s all-digital Consumer Electronics Show 2021, my colleague Lynne Sterrett noted that our vision for the Future of Health centers around a new generation of health consumers who are becoming empowered by data to make better-informed health decisions. Consumers are already generating mountains of data about their health through wearable devices, always-on sensors, and at-home diagnostic tests. As health care consumers continue to take control of their well-being and personal health data, they will likely expect more from health care and life sciences organizations. Health systems, for example, might try to reinvent the services they provide, and how they charge for them.
We are also seeing the growth of smart health communities, which typically exist outside of, or in conjunction with, the traditional life sciences and health care system. These communities encourage disease prevention and well-being in a geographic or virtual setting. The pandemic has prompted public health entities, health systems, employers, and community organizations to work together to conduct tests, develop public-outreach messages, and vaccinate their populations.9 Further work to provide community resilience and address drivers of health could become trends this year as lessons from the pandemic motivate ecosystems to align for community health benefits. Additionally, the digital solutions that allow individuals to gain an upper hand in their health could be leveraged as community health and innovation become better financed.
Digital health needs help and could get it as consumers make their voices heard. This could sustain some of the gains we experienced earlier in the pandemic. In her 2021 Outlook, Tina Wheeler described how her daughter and fellow medical-school classmates are honing their virtual-care skills. Along with increased access to virtual visits, I expect consumers will take advantage of a wave of home health, home testing, and home treatment options.
As we move toward that future, and as health becomes increasingly digital, there will likely be an even greater need to address issues such as privacy, interoperability, cybersecurity, and trust.
4. Ecosystems and alliances: It’s difficult to solve complex problems alone, and we seem to have entered a new era of public/private partnerships in health care and life sciences. Last fall, for example, HHS announced that it had signed an agreement with The Rockefeller Foundation to share effective approaches for using rapid antigen tests to screen communities for COVID-19 infections.10 The Rockefeller Foundation's Testing Solutions Group (TSG) includes a network of state and city officials who collaborated to ramp-up testing, tracing, and tracking in their communities. Early in the pandemic, a group of organizations banded together to form Project Beacon, a not-for-profit organization that provides low-cost COVID-19 testing in Massachusetts. It’s possible that the investments some states and countries have made in testing, contract tracing, and vaccine distribution could lead to more efficient systems and better information.
In the life sciences space, we have seen an unprecedented level of collaboration among fiercely competitive companies. They are now sharing science and working together against a common enemy. I don’t anticipate that this trend toward increased collaboration will dissipate after the threat of the pandemic subsides. I expect it will accelerate and new models of R&D, manufacturing, distribution, and commercialization will emerge.
With the recent emergence of COVID-19 variants, we could face new waves of infections and other health threats in 2021. However, our resolve and business resilience are stronger than ever. Business and government leaders who were able to nimbly respond to last year’s challenges will likely have the core competencies needed to thrive in the future.
In the year ahead, I expect that health will be on the agenda of federal and state lawmakers, every governor, every mayor, every CEO, and every board in the country. It will be a principal topic for restarting the economy. Individuals will also have new expectations from health care and life sciences companies. I expect that 2021 will see an emergence of companies, organizations, and individuals coming together and contributing their unique capabilities for the common good, which could help move us to the Future of Health more quickly than expected.
1. COVID-19 dashboard, Johns Hopkins Coronavirus Resource Center
2. The US Battles Coronavirus, but is it fair to compare a pandemic to a war?, National Public Radio, February 3, 2021
3. The real reason the US has employer-sponsored health insurance, The New York Times, September 5, 2017
4. American woman in World War II, History.com, February 28, 2020
5. FDA takes additional action in fight against COVID-19 by issuing EUA for second vaccine, FDA news release, December 18, 2020
6. COVID-19 Real-Time Learning Network/CDC and IDSA, February 2, 2021
7. Biden Executive Order to reopen HealthCare.Gov, make other changes, Health Affairs, January 29, 2021
8. Principles on health equity, AdvaMed, November 2020
9. A California university tries to shield an entire city from coronavirus, The New York Times, January 30, 2021
10. HHS teams up with the Rockefeller Foundation to share best practices for increased COVID-19 testing, HHS press release, October 1, 2020
2021 Life sciences and health care outlook | Dbriefs webcast recording
As health care and life sciences organizations continue to advance and evolve, what new developments could emerge in 2021 that will continue to shape the future of health? Access our Deloitte Dbriefs recording to discover how organizations can rethink their growth strategies by finding new areas of opportunity.
Dr. Dhar is vice chair and US Life Sciences and Health Care (LSHC) Industry Leader for Deloitte LLP leading the overall strategic direction for the life sciences and health care practices, including audit, consulting, tax, and advisory services. He helps Governments, Life Sciences and Health Care clients reinvent wellness, address disease, respond to pandemics and tackle health inequities. Dr. Dhar's teams have developed powerful view of the Future of Health which explains how health will leverage disruptive technologies to transform the industry to make it consumer focused, personalized, preventative, equitable and sustainable. He has a deep passion for climate, sustainability and equity and is an executive sponsor for Deloitte’s Health Equity Institute. Dr. Dhar has a deep interest in cancer that goes well beyond his day to day business responsibilities at Deloitte. He is a board member of the American Cancer Society and works with numerous organizations to end cancer as we know it.