2024: Some like it hot 🌶️
5 hot-take predictions from Casey Langwith
The beginning of a new year means it is prediction season — early enough to maintain hope that stock market highs will persist, with dreams that 2024 could even bring a few healthcare IPO debuts. But predictions wouldn’t be fun without a few hot takes — so here, I present 5 hot-take predictions for 2024, ranked from mildest to spiciest.
🌶️Growing understanding of women’s health as extending beyond reproductive-related care
First, some sobering news: Rock Health reports that funding for women’s health is down to just 2.7% of overall funding in 2023 ($283M), from 7.1% share ($2.1B) in 2021. However, McKinsey Health Institute and World Economic Forum recently issued a call to action, noting that 51% of the global women’s health burden is due to non-maternal, non-gynecological conditions that affect women disproportionately or differently than men (such as autoimmune disease, depression, and colon cancer). I was heartened by their call for gender-specific care - the exact approach taken by my company Multitude Health. 30M people in the US are suffering from Irritable Bowel Syndrome — and 66% of them are women. Since many women experience worsening symptoms during their period, Multitude offers tools tailored to the different needs of women and men. While reproductive and maternal care is incredibly important, so is caring for our other organ systems. It’s time for women’s health to be defined more broadly than the uterus.
🌶️🌶️LLM luster fades as arguments about unlicensed content escalate
If 2023 was the year of the generative AI party, 2024 is the year the bill comes due. Legal experts are unsure what courts will decide about The New York Times’ suit against Open AI or Getty against Stability. Certainly, the era of training data on unlicensed content and hoping no one notices is over. No major LLM leader has emerged within health care, though well-funded contenders such as Hippocratic AI and Google Med-PaLM will try to pull ahead.
🌶️🌶️🌶️RCM automation continues to struggle, while prior authorization automation surges
The last few months brought the dissolution of Olive AI and layoffs at its competitor Janus. Revenue cycle management is hard to scale effectively, given the intricacies of hospital-specific EMR instances and complex payer rules. But the high administrative burden involved in prior authorization (PA) for both providers and payers makes the PA process an attractive target for automation. Players like Infinitus, Outbound.AI, and Availity will continue to make inroads against the thousands of person-hours involved in completing prior authorization — while making healthcare workers’ jobs better, by spending less time on hold.
🌶️🌶️🌶️🌶️ Obesity-focused startups die with a whimper as GLP-1 cost pressures mount
I started my career at the STOP Obesity Alliance at George Washington University and was excited to see obesity treatment come to the forefront of the national conversation in 2023. In particular, I appreciate that “obesity is a disease” is becoming increasingly mainstream — rather than outdated takes about lack of willpower.
But as businesses, obesity-focused startups will struggle. Prescribing and delivering GLP-1s is increasingly commoditized, with concerns mounting about potentially inappropriate prescribing, compounding risk, and long-term safety. Frustrated with potential brand damage from inconsistent partners, Eli Lilly took the unusual step of launching LillyDirect. Distribution partnerships between pharmaceutical brands and telemedicine companies are not uncommon but are usually obfuscated, such as between Ro and Gelesis’ Plenity (since discontinued by the manufacturer; read the press release versus Ro’s graveyard Plenity landing page).
As Axios and Rock Health reported, obesity and weight management startups raised $2.2 billion(!) in 2021, declining to $574M in 2022 and just $67M in 2023. Companies that raised in the 2021-2022 hype cycles will be due for a capital infusion this year in an increasingly competitive market. To survive, companies need clear differentiation, strong behavioral and nutritional support offerings beyond GLP-1s, and a distribution hack. Many will struggle to raise additional capital and will either close their doors or seek a buyer.
🌶️🌶️🌶️🌶️🌶️FTC takes real action against PBMs, further propelling transparency-focused upstarts
The FTC issued compulsory orders in 2022 and 2023 against large Pharmacy Benefit Managers: CVS Caremark, Express Scripts, OptumRx, Humana, Prime, MedImpact, and affiliated Group Purchasing Organizations (Zinc, Ascent, and Emisar). Investors have historically scoffed that real regulatory action would come against PBMs, but this FTC has shown a willingness to take on deep-pocketed companies. The FTC is likely to issue findings from their investigation within 2024. “Transparent” PBMs and pharmacies stand to benefit, such as Mark Cuban Cost Plus Drugs, Rightway, CapitalRx, and SmithRx. However, the business impact for the legacy PBMs will likely be mitigated, as the large PBMs have already begun implementing contingency plans. For example, legacy PBMs have mimicked Cost Plus Drugs by rolling out “Cost Plus” pricing models (see CVS CostVantage). Still, moves from Blue Shield of California and Fortune 100 company Tyson away from legacy PBMs mean this will be an area to watch.