Why it’s time for a futures market in health care
Financial futures were created in the 1970s at a time of very high interest rates and inflation. Those economic ills were cured by the mid-1980s. Oil futures were created in the early 1980s at a time of shortages and volatile prices. The oil market stabilized a few years later. Stabilization of prices and supply happened because industry participants could transfer risk and achieve predictable pricing while speculators could find trading opportunities.
Today, it is health care costs that are out of control and that have risen to unsustainable levels. Insurance premiums and co-pays are at record highs, and some insurance companies are refusing to pay for some of the most expensive treatments. Capital market tools can do for health care what they did for interest rates and energy—provide stability and reduce prices—all of which is in the interest of patients. But so far, those tools don’t exist for health care.
Creating a health care marketplace
A futures or forward contract is a legal agreement to buy or sell a commodity or financial instrument at a predetermined price at a specific future time. It is a classic two-way market between willing buyers and sellers.
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Πηγή: fortune.com
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As one of the most regulated markets, healthcare also commands major cash. The US healthcare industry represents about $3.5 trillion in annual spending, according to a 2019 report by Deloitte. Within that, healthtech—defined as technology-enabled healthcare products and services primarily used outside a hospital or doctor’s office—garnered nearly $11 billion in venture dollars across 870 deals as of 3Q 2019, according to PitchBook estimates.
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