The Top Ten Health Industry Issues To Watch in 2013

PwC’s Health Research Institute (HRI) published its annual list of the Top Health Industry Issues for 2013:

1. States on the front-lines of Affordable Care Act implementation – Over the next year, state officials must decide how to run insurance exchanges, whether to expand Medicaid coverage, and what type of insurance market regulation is needed. Information technology will be the biggest challenge states may face in 2013. Some states will need to undergo a major overhaul of existing Medicaid eligibility systems.

2. Consumer revolution in health coverage – Consumers’ rising voice on how they spend their healthcare dollars, coupled with state insurance exchanges, is prompting the health industry to compete on convenience, price, and transparency. Consumers are already warming up to new ways of purchasing insurance: 23% of consumers surveyed are likely to buy health insurance from non-traditional sources such as a retail store, up from 18% in 2011.

3. Medtech industry braces for excise tax impact – A 2.3% excise tax on medical device companies takes effect on January 1, 2013, representing potentially $29.1 billion to the federal government over the next 10 years.

4. Caring for the nation’s most vulnerable: dual eligibles – Dual eligibles (people who qualify for Medicare and Medicaid) make up many of the 16 million people the ACA will add to Medicaid rolls by 2019. The cost of care for duals is skyrocketing — much of it wasted due to a lack of care coordination between the two programs. Seventy percent of state Medicaid spending on duals goes to long-term care support services, such as nursing homes. Cash-strapped states are increasingly turning to the expertise of managed care companies to better coordinate care, and they are seeking innovative solutions, such as from the technology sector, to better support home-based care and caregivers.

5. Bring your own mobile device: convenience at a cost – Doctors and nurses are bringing mobile devices to work, but many hospitals do not yet have a secure enough environment to protect sensitive patient information. Sixty-nine percent of consumers are concerned about the privacy of their medical information if providers can access it on their mobile devices. Only 46% of hospitals have a security strategy to regulate the use of mobile devices.

6. Goodbye cost reduction, hello transformation – With reimbursement resetting under the ACA and pressure from the federal budget crisis and price-conscious consumers, hospitals are scrambling to reduce their costs. Forty percent of consumers postponed care in 2012 because of the costs. Having already plucked low-hanging fruit with labor productivity and supply cost reductions, more hospitals in 2013 will embark on full-scale transformation efforts to redesign how they deliver care.

7. Customer ratings hit the pocketbooks of healthcare companies – Paying for performance will take on new meaning in 2013 as consumer reviews generate penalties and bonuses for hospitals and insurers. This could mean a bonus payout of more than $3 billion for insurers and a hold back of $850 million for providers in 2013. Healthcare companies will need to invest in consumer research and education in order to take full advantage of the new payments.

8. Meeting the new expectations of pharma value – Physicians, once the primary arbiters of pharma value, now have less say in payment decisions than insurers and large providers. The final hurdle in the long, expensive path to drug and device development is not regulatory approval, but rather reimbursement. Though pharmaceutical and medical device companies play a pivotal role in health outcomes, they will have to prove it to earn it by demonstrating their value and comparative effectiveness.

9. Bigger than benefits: employers rethink their role in healthcare – With the Supreme Court ruling to uphold the ACA and the re-election of the President, employers have an opportunity to re-examine their long term role in providing healthcare coverage and explore alternative approaches provided by state and/or private exchanges. In 2013, CEOs will ask tough questions about how and why so many resources are going to something that is not core to the business. The answers will vary by company, some of which are likely to transition away from healthcare coverage while others will redesign their benefit strategies.

10. The building blocks of population health management – Medicare’s accountable care organization and patient-centered medical home initiatives laid a foundation for improving population health, but other collaborations are fueling growth in population health management. In 2013, more companies are likely to form partnerships to build their population health IT infrastructures and share responsibility for patient outcomes and satisfaction, data collection and analysis, member education and engagement, with a focus on at-risk populations. To download the full report, visit:www.pwc.com/us/tophealthissues.

Last Updated 9/8/2017

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