Life, Liberty, & Happiness

Healthcare Outlook 2018: Health Insurers


or health plans, most of 2017 was spent sweating and waiting to see what Congress would or would not do to the Affordable Care Act (ACA).

This constant worry clouded growth plans, paused most investments, and slowed innovation. As we head into 2018, here’s a few thoughts for health plans in the coming year.

1. Public Policy Impacts Everything
The implications of federal and state policy has become central to the strategies and business performance of health plans. This influence extends well beyond the ACA debates into areas like Medicare Advantage (MA) and Managed Medicaid. These government lines of business account for an expanding share of health plans’ revenue and margins. They are also the biggest detriment to real innovation within the health plan.

2. Large Employers What Something New
For many years, the most profitable line of business for health plans was simply to “administer” a large employer’s plan (and the employer’s money). These programs have mostly run their course. They’re stale - lacking innovation and employee engagement. Employers have begun to realize that “unit price concessions” is about all they get from these relationships and have begun to reach out directly to hospital systems to seek more direct relationships. I expect we’ll see more employer – health system interaction, much to the dismay of the health plan.

3. Cost Control Lacks Innovative Design
Cost pressures on employers, families and consumers will continue to grow. Costs to employers and consumers is the single largest challenge in the health care industry. Rising member out-of-pocket costs has hit a level that people now forgo basic care. Families cannot afford ever higher deductibles when personal income growth remains relatively flat. Many health plans remain reluctant to work with early innovators or take 12 months of committee meetings to even evaluate a new idea. Outside of trying to control pharma growth and hoping providers adopt value-based care, there’s little on the horizon that will bring innovation to these aging health plan platforms. So employers and consumers will take matters into their own hands.

4. Technology Changes Consumer Expectations
The growth of on-line benefit enrollment, mobile interaction with physicians, population analytics for employers, and 24/7 concierge support will continue to marginalize the traditional health plan. For most health plans, care management is only offered 8-5, Monday - Friday. We are living in a 24/7 connected world. Millennials had much rather text and video chat with a provider than get an office appointment or pick a primary care provider. And Millennials will become the majority of the workforce by the end of next year. They will no longer accept the status quo. It’s time for health plans to do something radically different for the consumer.

5. Mergers Change the Competitive Landscape
The past few quarters have brought big news - and opportunities to break down the traditional barriers that have existed between health plans, providers, pharma services, care support, population health data, etc. I expect the convergence of the health plan and provider sectors to accelerate in 2018. This willingness to come together reflects the growing recognition across the health care industry that better synchronization between the financing and delivery of health care services and products is likely a necessary condition for systemic change.


I would characterize 2017 as the year of “watch and wait for Congress” within many health plans. I expect 2018 to be the year of “do something big or become irrelevant.” I’d love to hear your thoughts.

About Dr. Michael Burcham

Michael is an executive coach, entrepreneur, investor, and strategist with 30 years of experience leading investor-backed, high-growth organizations.

“I built and sold a $40M company with Dr. Burcham as my mentor. This is the thing: if you EVER get the opportunity to learn from this man, from that moment forward, you’ll list him as one of the most influential people in your life, even if you live to be 90. And, you’ll know how lucky you were to have that opportunity and you’ll immediately say YES to any chance to be in his presence again—his wisdom is that impactful.”

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Former CEO, Letter Logic

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Director, U.S. Department of Commerce


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