Thanks for sharing your opinion. Much appreciated.
I agree with all your points. But in my opinion they represent the consensus view held by Mr. Market for the next 2-3 years.
I am more interested in where the puck will be going.rather than where it has been,
My thought process is as below regarding the future (Not forecasting but teasing out the possibilities):
Let us consider a thought experiment of 2 possible alternative worlds:
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An empowered consumer-patient who has become disillusioned with the top-down dietary guidelines (based on correlation/association) and decides to self-experiment to figure out how different lifestyle factors (nutrition, exercise, sleep, stress, alcohol) affect him/her. This is where various diagnostic channels will help. It could be Point of care devices like Fitbit, Oura ring (24x7) or monthly/quarterly profiles from vendors like Thyrocare. Most would prefer data-points from different sources to corroborate rather than depend only on one device/medium.
In this scenario: i think Pathology/Histology + Genomic should benefit. -
Or the consumer-patient continues to believe the Govt/experts know what is best for them and continue on the path towards higher proportion of chronic illnesses with various specialists working in silos and looking at diagnostic markers in isolation (such as LDL cholesterol) or focusing on the wrong markers (such as Blood Glucose instead of Insulin and Insulin Resistance related markers). Essentially the diseased/disordered outnumber the healthy despite following the guidelines perfectly.
In this scenario: PET-CT scans should benefit (Genomic should as well but for the wrong reasons).
I would very much prefer 1st scenario rather than the 2nd one.
But we will end up somewhere in between the above 2 extremes.
Given the sheer weight of numbers in terms of population, Thyrocare and other big diagnostic firms can leverage the huge amount of data they are accumulating currently to look at all the parameters at a holistic level and see if predictive patterns can be discerned. (Possible integration benefits with Goqii ecosystem). Assuming they anonymize the data first.
With respect to Genomic testing, it is a small portion of what can be analysed. There are a lot of other -omics such as Proteomics, Metabolomics, Lipidomics, Transcriptomics (currently limited to research). Genes are ultimately switches to be turned off or on by epigenomic (environment around the gene) factors. It is the change in genomics on account of the epigenome which is far more crucial information.
Given the current cost of performing genomics testing, my current understanding is that it is done just once on request of a doctor or for the purpose of 23andMe profiles. It makes more sense when somebody can perform these tests say on a half-yearly or yearly basis to track the dynamic changes in genome.
As the cost of gene sequencing decreases further, at some point of time Thyrocare may find it feasible and profitable enough to include it in their profiles (all that is needed is a tongue swab to be collected by the phlebotomist)
With respect to pricing and regulation (lack of entry barriers), I can understand why the Govt may not have been active in enforcing regulation on diagnostics. I assume they wanted to encourage sufficient availability/penetration of diagnostic labs before focusing on regulation.
The recent announcement of the National Essential Diagnostics List (NEDL) draft, is IMHO a positive first step towards standardization and more regulation. PMJAY would necessitate the need for proper accreditation/quality of diagnostic labs before they can tap into those insurance payments.
Above is an example of a health insurance firm which have linked health markers to the premiums.
A diabetic maintaining a lower HbA1c pays a lower premium compared to a higher HbA1c patient.
Funnily enough, I have never discussed about any financial metrics because Mr.Market accepts the fact that the balance sheet is of a high quality with sustainable cash flows from B2B and has the capacity to suffer a downturn in terms of increasing competition + price under-cutting at least for the near term (2-3 years). Don’t know if it is anti-fragile. But it is for sure not fragile.
Increase in tighter regulation is bound to start consolidation. Timeline is uncertain. But given that there is currently over supply, we must wait for the inevitable change in cycle and consolidation wave. Question is will Thryocare adapt to acquire or surrender to get acquired? I am betting on the former.
Under a tighter regulation regime, I think Thyrocare’s kitchen sink model can come to the fore and there may be a premium in the eyes of the B2B customers for being associated to Thyrocare’s network.
I would encourage folks to posit opposing views to the hypothesis I have proposed above (Again a reminder that I am not making an attempt to forecast the future)