The US healthcare system is an ongoing train wreck and federal and state governments have yet to implement any real plan for fixing it other than randomly throwing cash at one segment or another. What I want to do here is provide an overview of the problems and which companies are poised to profit off of them. This is going to be long because healthcare is very complicated. I'm not including alternative medicine because grifters abound in that market so I haven't done any research on it.
First lets look at the labor pipeline. Most every role in healthcare that has patient contact requires education and licensing. Because these are controlled at state level the requirements vary as do the titles and job roles. The table below shows the years of education and training required.
| Title | Undergrad | Graduate |Training* | Total | Note | |--------------------|-------------------------|---------------|----------------|--------------------|---------|------------------------------------------------------------------| | Doctor/physician | 3-4 | 3-4 | 3-7 | 9-15 | DO and MD | | Physican assistant (PA) | 3-4 | 2-3 | 2000 hr | 6-8 | | | Nurse Practitioner (NP) | 3-4 | 1.5 | | 4.5-5.5 | Prerequisite 500 hours experience as a nurse | | Psychiatrist | 3-4 | 4 | 4 | 11-12 | A mental health doctor/physician specialty | | Psychologist | 3-4 | 2-3 | 1–2 | 6-9 | Training requirement varies by state | | Social Worker | 3-4 | 2-3 | (varies) | 5-7 | Training requirement varies by state | | Dentist | 3-4 | 2 | 2 | 7-8 | | | Veterinarian | 3-4 | 4 | 4 | 11-12 |Multiple species for half the pay | | Software engineer (healthcare) | 0-4 | 2-4 | |0-8 |No medical training required | | Wellness influencer | | | | |LOL | *On the job training or residency and fellowship for doctors
Most of the top-tier providers are doctors, and most of them are specialized like the psychiatrist above. The career can pay well but the required educational investment results in a mountain of debt and years of lost earning potential that is difficult to make up for. Many other careers have a better ROI with less stress. And healthcare is a stressful environment with constant legal threats, attacks from patients, political intrusions into care (especially anything related to reproduction), and fights with insurance and Medicare over treatment approvals and payments. This discourages potential students from enrolling and causes long-term labor shortages. International medical graduates could fill some of the gap but that's not a popular option lately.
The labor shortage results in high stress, high costs, and low care quality from overwork. Lower-skill providers are pressured to move into roles they're not suited for and experienced staff retire early. Patients encounter appointment delays, long wait times, more misdiagnoses, excessive lab tests, and referrals to specialists for anything that isn't trivial to diagnose.
Another major factor is how health care is paid for. Most people use insurance of some sort and many procedures require pre-approval, a major point of conflict between the insurer, provider, and patient. In general, Medicare is easier to get approval from but reimbursement rates are low. Private insurance pays better but fights every approval. Look up the video "How to Get an MRI" by comedian Dr. Glaucomflecken for a humorous but not inaccurate take on this. These battles are also a growing area of AI usage with insurers using it to reject claims and providers using it to automate appeals. But many patients don't have any insurance at all. If they can't get charitable care they wait until severely ill then go to an emergency room where the Emergency Medical Treatment & Labor Act (EMTALA) requires the hospital to examine and possibly treat them for free. The cost of this falls upon everyone else.
Because of these problems many urban and rural hospitals are barely surviving. Out of desperation many get into sale-leaseback private equity (PE) schemes which works until it doesn't and they close. For the people who were once served by that hospital it means traveling to a more distant one and if that results in not getting emergency care within the medical "golden hour" then they'll just have to plan their emergencies better next time. The market favors large suburban hospitals with a hub-and-spoke structure where front line care outside of the suburbs is minimalist and focused on supplying patients to the central hospital. Thus there are stand-alone emergency rooms without on-site doctors - the staff are directed remotely on how to stabilize a patient enough for transport. EMS transport companies love this trend (like GMR Solutions which recently had an IPO).
Front line providers like the typical "family doctor" face the same pressure as hospitals but with fewer resources. They are under immense pressure to reduce visitation times which causes patient conflict and reduces care. Patients relying on a free annual wellness visit will show up with a years worth of health complaints that are impossible for the provider to diagnose and treat in a 10-15 minute visitation. So providers start ramming patients through their schedules in a refer, refill, repeat cycle. They eventually have to either increase their fees, join larger groups (often PE-backed), or change their business models. Two popular alternative business models are concierge care, essentially paying more for a provider with lower patient load on a retainer basis (what the wealthy use), or direct primary care where providers don't accept insurance and patients pay per visit or through some form of a subscription (often in combination with a health savings account). An HSA does have an advantage that after age 65 it acts like a normal IRA without a penalty on non-medical withdrawals.
As a whole the US health care system has also become inelastic with very little reserve capacity. Any time there is a new disease spreading, like a worse than average flu, the emergency rooms quickly overflow and patients are stuck in hallways or ambulances waiting to be examined. The many health care grifters and vaccine conspiracies aren't helping with this. It can take a week or more to get an appointment at a family practice clinic and there's a good chance of having appointments canceled or rescheduled because the provider is unavailable and can't find anyone to cover for them (aka. locum). Urgent care costs twice as much just to see a NP, or a PA if you're lucky. Nor is this entirely a US problem - the health care systems of many western countries are also having trouble but perhaps not as systemically severe as the US.
In short, the health care system is failing and is not likely to recover anytime soon. So taking that into account I foresee a few trends:
- Telehealth replacing most non-emergency visits. High speed Internet access is improving, even in remote rural areas, and most everyone has a smartphone. As long as the provider is licensed in the location of the patient they can provide care and reside most anywhere on the planet, like a place with a low cost of living and a functional health care system. Providers don't have to worry about patients assaulting them. It pays less but they can work from home with less stress and utilize the licenses they worked for. Many providers already do this as a side gig. This isn't what patients want but they're not going to be able to afford or access direct care from a doctor. 2. Direct-to-consumer (D2C) health services, i.e. bypassing intermediate provider visits and referral requirements. The obvious one is lab tests but it could spread to other routine services like endoscopy for colonoscopies. 3. Increasingly high insurance costs, both through premiums and denied claims, causing more people drop it entirely. Medicare is an option but due to low reimbursement rates many providers don't accept it. So patients pay cash out of their personal savings or solicit donations (GoFundMe). Cash has an advantage in that many healthcare services offer discounts, often around 40%, for not having to deal with insurers. Hospitals are required to provide lists of standard charges for their services. These are massive spreadsheets and it can be difficult to identify specific procedures because the many variations of them but they show the cash prices vs. what is billed to each insurer they accept. The insurance problem also spills over to pharmaceuticals where there are multiple middle-men and anti-competitive behavior between manufacturers that keep prices high. 4. Standalone specialty services replacing non-emergency hospital services, especially radiology. This will reduce the utilization of hospital equipment investments and the increased overhead will add to their financial woes as patients seek cheaper services elsewhere. 5. Suppliers of equipment and medical devices will be less affected if they're not overly exposed to hospital fortunes (or tariffs). People still need implants or joint replacements and many of those can be done in stand-alone surgical centers.
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