Microsoft's acquisition of Nuance reflects health care trends of an economy emerging from COVID-19, according to a speaker at the National Association of Managed Care Physicians Virtual Spring Managed Care Forum.
Microsoft’s announcement last week that it is buying Nuance Communications for close to $20 billion represents the earliest sign of a “key inflection point” in how the postpandemic health care world will develop, according to a speaker on the first day of the National Association of Managed Care Physicians (NAMCP) Virtual Spring Managed Care Forum.
The move is reflective of one of half a dozen trends or so to watch as the world tries to enter a new phase of the economy that is not so dominated by COVID-19, according to a presentation by Jacque J. Sokolov, MD, chairman and CEO of SSB Solutions, a health care management, development, and financial services firm.
“I believe that the future of postpandemic health care is the light at the end of the tunnel—it is not a freight train,” he said, referring to the title of his presentation: “The Future of Post Pandemic Healthcare: Light at the End of the Tunnel or an Approaching Train?”
Lingering effects will be felt for years, in ways both good and bad.
Microsoft is the “M” in FAANG+M—Facebook, Apple, Amazon, Netflix, Google plus Microsoft; the acronym was created by Wall Street analysts to represent their more than $12 trillion impact on the S&P.
These companies, which have been getting into different aspects of health care here and there, are now primed to become a major disruptor, with the Microsoft-Nuance deal the biggest yet. Previous deals were not “transformational investments,” he said.
These traditional tech and software companies are pushing into insurance, distribution, pharmaceuticals, devices, and platform development, as well as delivery, he said.
Digital health firms, telehealth, telemedicine, and telemonitoring companies—catapulted in new ways because of the pandemic—could all be on the FAANG+M radar.
The impact of mRNA vaccines
Another major focus of his talk was on the future potential of mRNA vaccines, the platform for the COVID-19 vaccines from Pfizer/BioNTech and Moderna.
mRNA technology dates back almost 2 decades and historically was investigated for immunotherapies and cancer diagnosis and treatment, especially cancer vaccines. That remains the real goal, said Sokolov.
“The infectious disease impact of mRNA…is literally the tip of the iceberg of diagnosis, therapeutics, and vaccine creation for cancer, potentially neurodegenerative diseases and immunological diseases,” Sokolov said, including Alzheimer disease and ALS.
Advanced mRNA wafers can be created in under 4 days and hold about 400,000 peptides related to all known cancers, he said. These revolutionary techniques will mirror the game-changing introduction of the first biologics 20 years ago.
Deconstructing digital and the “super” consumer
Digital health can take many forms, Sokolov noted, and the different components are all moving at different rates. One thing that is notable, he said, is that anything digital intersects across patients, providers, and payers—all areas “that don’t have good solutions today but could have good solutions tomorrow.”
Digitalization of health care is one of the attributes of the patient experience, Sokolov said, and there will be a trend towards embracing the “super consumer” patient experience through digital technology wraparounds and virtual complex care.
For instance, digital health tools driven by adaptive artificial intelligence (AI) could be used to support virtual clinics, exams, diagnosis based on probabilities, and scribe functions.
It will also enable “micro footprints” which shift care from more expensive sites of delivery to multiple entry points, including at-home complex care.
On the topic of value-based care, Sokolov said hospitals and affiliated physician groups could enter into these contracts with payers in order to benefit from value-based reimbursement, but to do that they need to create clinically integrated networks.
Value-based health plans will drive an increasingly "federated" approach to value-based contracting with providers on a continuum of reimbursement structures, ranging from shared savings, 2-sided risk, and capturing a percentage of premiums and capitation.
“Probably the most significant advance in the value-based area is coming from the federal government increasingly focusing on more and more direct contracting,” Sokolov said.
Private equity investment and aggregators
Private equity investors are aggregating companies to create large physician practice management firms with regional and national impact. These health care ventures in new combinations will speed speed up both value-based contracting and the profitability of certain health care specialty sectors that typically have focused on fee for service, he said.
In one example, Summit Medical Group, based in New Jersey, and CityMD, based in New York, were brought together by private equity firm Warburg Pincus in a $2.8 million deal.
“I don't know what a new normal look looks like,” Sokolov said, but the changes in the economy will be profound and upset multiple health care sectors for years.
A few of the unknowns include how COVID-19 variants will shape the environment; boosters will likely be necessary, he said.
Vaccination distribution and adoption challenges remain, with more than 30% of the country still resistant to the idea of receiving one. In addition, the long-term consequences of COVID-19 “long haulers” and shifts in disease burdens and disparities could create volatility in medical loss ratios. The United States still a growing burden of untreated chronic disease, and compared with other developed countries, we pay much more for care for older adults.
While the explosion of digital health and the expansion of mRNA technology has been positive, he said, “We've obviously lost 5 and a half million people to COVID and that cannot be minimized.”