Here’s a bold prediction for the new year. By 2020, the American health insurance industry will be extinct. Insurance companies will be replaced by accountable care organizations — groups of doctors, hospitals and other health care providers who come together to provide the full range of medical care for patients.
Reality can be anything. At one extreme, the Republicans repeal ObamaCare and health insurance carries on as before. At another extreme, the role of health insurance companies is diminished, and profits drop. But they will still exist. In countries with very liberal health care infrastructures and abundant free services (like Australia), private health insurance is still a popular option for those who can afford it.
Still, some insurance companies are scared enough to be diversifying:
A few health insurers see this asteroid coming. Wellpoint, for example, bought the clinic operator CareMore for $800 million last summer to make the transition into the A.C.O. business. Others, like the Optum unit of UnitedHealth Group, are developing data analysis services to provide to future A.C.O.’s. If they don’t want to go the way of the dinosaurs, insurance companies will have to find a new business to be in, one that is useful in the new world of coordinated care.
The very best health insurance companies will survive, and they will the ones that have the highest rates of consumer trust, and those that offered the cheapest health insurance quotes.