SCHWARTZ HEALTHCARE-IT BLOG

2007 Healthcare Predictions

It's the time of year when consultants and industry analysts make their 2007 predictions on healthcare.

PricewaterhouseCoopers releases their own, calling 2007 a watershed for the health industries as health savings accounts reach a tipping point, states act where the federal government hasn't and pressure on pricing amid demand for transparency forces pharmaceutical companies, hospitals and health plans to rethink their strategies.

PricewaterhouseCoopers' top seven trends:

1. States Take the Initiative:  In the presence of federal gridlock, states are taking the lead on divisive issues such as stem cell research, health insurance coverage for the uninsured and oversight of advertising and promotion by pharmaceutical companies.  Responding to local social and fiscal concerns, states are developing innovative insurance programs, forming public-private partnerships to spur innovation and passing legislation to drive greater accountability and transparency from hospitals, physicians and pharmaceutical manufacturers.  According to PwC, such state-led initiatives will likely expand in 2007, but the risk is a patchwork quilt of local programs and regulations.

2. Transparency Could be Revealing:   The demand for transparency around pricing, quality measures, safety standards and community benefit is being driven by and is supportive of consumer-directed healthcare and pay-for-performance.  In 2007, the health industries will focus on becoming more transparent, but government, insurers and employers need to educate consumers about the availability and use of such information.  Providers will need to dedicate more resources to reporting, a strategic issue that can no longer be delegated down in the organization.

For the other five predictions follow the link...

3. Time to Walk the Talk on Technology:   Developing a digital backbone to support electronic health records, interoperability and transparency is a national priority, but the public mandate is unclear and the industry is struggling with the cost and return on the investment.   According to PwC's research, nearly one-quarter (24 percent) of Americans don't yet believe that having an electronic health record will improve the quality of healthcare, and four in ten consumers (42 percent) are unsure.  Progress will take an investment of resources from the government and/or the private sector.

4. Consumers Take the Wheel:  The shift toward consumer-driven healthcare as a way to control costs will continue, but the year ahead will be the tipping point for HDHPs and HSAs. Insurers, employers, and to some extent the government have been proceeding in favor of consumer-directed health plans in the absence of strong support from the consumers themselves and from strong data on the results of such changes in benefits. PwC's consumer research found that only one in seven Americans (17 percent) surveyed by PwC thinks that increased cost-sharing is a "very important" way to reduce healthcare costs. With a critical mass of people now enrolled in these plans, 2007 will be the year to see whether they really have results to offer, and for consumers to weigh in on what they think of them.

5. Price Check for Pharmaceuticals: Forty-two blockbuster drugs will lose their patents in 2007, opening the door to generic equivalents and potentially creating an enormous loss of revenue for brand name pharmaceutical manufacturers.  PwC's consumer survey indicates that the public is quite aware of and sensitive to drug prices, perhaps due to relatively high cost sharing and price transparency of pharmaceuticals, relative to other health services.  Nearly three quarters (72 percent) of consumers surveyed said they would be willing to take a generic versus brand--name prescription drug.  According to PwC, drug pricing will come under continued pressure from generics, and pharmaceutical companies will have to develop innovative pricing strategies to
compete.

6. Obesity is the New Smoking:  First smoking, now weight. There is a culture shift around healthy eating sweeping the United States, as evidenced by the number of fast food chains cutting out transfats and U.S. companies introducing health and wellness programs.  Two-thirds of U.S. adults are overweight, and obesity's impact on chronic health problems is stirring healthcare organizations and employers to aggressively promote weight loss. Public attitudes have yet to catch up: While three in five Americans (61 percent) believe health insurance should cost more for smokers, only 40 percent believe it should cost more for those who are overweight because of poor lifestyle habits. In 2007, expect public health campaigns to push the envelope on obesity through wellness programs and financial incentives to lead healthier lifestyles.

7. Small is Big:  The competitive landscape will change as healthcare gets smaller, more focused and patient friendly under consumer-directed healthcare.  Physicians and hospitals are now competing with retailers, several of whom have announced plans to open mini-health clinics within their walls.  Consumers like the idea: Four in ten people surveyed by PwC (42 percent) said they would seek non-emergency care from a retail health clinic.  In addition, large general hospitals are seeing competition from increasing numbers of smaller, specialty hospitals, surgery centers and outpatient clinics, the result of regulatory action overturning the specialty hospital ban. There already are 130 specialty hospitals in operation and more under construction, predominantly in the South and West.

Posted by Shawn Whalen on November 30, 2006 at 5:34 PM
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