Deloitte Estimates Wellness will Play a $3.8 Trillion Role in the Future of Medicine

I have been spending a fair amount of time on social media ClubHouse app. The app is still in its infancy. I've found it an excellent place to find and network with like-minded individuals. One of my new connections from Clubhouse, Ryan Kraudel, tweeted a recent article on the future of healthcare from Deloitte. The report, entitled, Breaking the Cost Curve, is the Deloitte forecast of how current trends will influence the delivery of healthcare in the U.S.

If your eyes glaze over at the thought of a business report, let me tell you why this one matters. In 2019, health care spending exceeded 3.8 trillion dollars, the equivalent of 18% of our gross domestic product (GDP). Before Covid-19, the Centers for Medicare and Medicaid projected health care spending would continue to expand at a rate of 5.3% a year, leading to projected costs of $6.2 trillion in 2028 and a whopping $11.8 trillion by 2040.

Deloitte, for the report, expanded the Merriam-Webster definition of well-being to the following, "the state of being prosperous" to include physical and mental health along with spiritual, social, emotional, equitable, and financial. Deloitte, however, believes health care costs will not be as high, projecting by 2040, healthcare spending will ONLY be $8.3 trillion. The $3.5 difference between Deloitte's projection and the CMS model is attributed to a "well-being dividend." The well-being dividend is the return on investment for tools, systems, and protocols that enable patients/consumers to play a more significant role in their health and wellness. Devices such as the Oura Ring and Apple Watch offer glimpses into the bright, consumer technology-enabled future.

Deloitte's forecast from the report includes:

1. By 2040, Deloitte estimates health spending will be U.S. $8.3 trillion vs. $11.8 trillion estimated by CMS. The difference of US$3.5 trillion being attributed to a well-being dividend.
2. A shift in spending. By 2040, 60% of the expenditure will improve health and well-being, rather than the 80% being spent on care and treatment today.
3. an utterly new health economy, different from today's business models, will drive 85% of revenue, including changes in hospitals as we know them, a decrease in mass-produced biopharma, and a shift in healthcare financing.

I'm excited by Deloitte's vision of the future and am anxious to see how the story unfolds.