Top Ten Health Issues for 2014

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By USDR

 

 

Implementation of the Affordable Care Act (ACA) is only one of the factors forcing a rapid reshaping of the $2.8 trillion U.S. healthcare industry in 2014 according to PwC’s Health Research Institute (HRI). In its annual report on the Top Health Industry Issues for 2014, released today, PwC’s HRI identifies the top 10 issues facing the U.S. health sector this year, including the need to adjust to empowered consumers, rapid innovation, and increasing competition from non-traditional players. The report includes the results of a survey of 1,000 U.S. consumers and interviews with health industry leaders that provide insights into the emerging new health economy.

 

 

The report notes that much of the health industry has accepted that reform is here to stay – and forward-looking executives are making decisions based on a post-ACA landscape that has altered the provision of insurance and the delivery of care.

 

 

According to HRI, 10 issues stand out as the top focus for the health industry in the year ahead:

 

 

  • Price transparency is growing as purchasers – consumers and employers – are demanding and receiving more information on cost and quality
  • Employers are exploring new health insurance options through private exchanges
  • New regulation aims to eliminate counterfeit medications in the drug supply chain
  • States are turning to managed care to help contain Medicaid long-term care costs
  • All healthcare companies need to rethink their roles and business models in the new health economy
  • Healthcare companies will need to change their rules on innovation — embrace “fail fast” approaches
  • Social, mobile, analytics, and cloud technologies are driving new health industry business models
  • Corporate venture capital is picking up the slack as traditional venture funding slows for pharmaceutical start-ups
  • Technology is redefining the healthcare job market
  • Drugmakers must rethink their clinical trial research methods, embracing alternative approaches

 

 

“While health insurance exchange implementation is driving headlines today – in reality the next 12 months will be marked by how well the industry addresses a range of core business challenges.  Our annual Top Issues report identifies the main concerns facing the health industry in 2014,” said Kelly Barnes, PwC’s U.S. health industries leader. “Businesses must address rapid innovation and competition from non-traditional players, but above all they must respond to empowered consumers as customer-centric transformation sweeps healthcare.”

 

 

Recognizing the increased role of the consumer, HRI polled 1,000 individuals to identify the top concerns driving healthcare customers’ choices. Key findings for 2014 include:

 

 

  • Price-sensitive consumers are distinguishing high-quality care from high-cost care. Sixty-five percent of consumers do not believe expensive medical treatment means better quality.
  • Providers and consumers are increasingly adopting mobile health technologies – more than one-quarter of consumers use mobile apps to schedule healthcare appointments, up from 16 percent a year ago.
  • A skeptical public is wary of new entrants in health insurance. Only one in 10 consumers surveyed indicated they were very likely to buy insurance from a new start-up and only fifteen percent said they were very likely to purchase a health plan run by a hospital or health system.
  • Twenty-seven percent of consumers indicated they strongly prefer that employers offer a choice of three to five health plans compared to 14 percent who strongly preferred to be offered a single plan.

 

 

Additional details on the top 10 business issues that HRI identified include:

 

 

1.  Picking up the pace of price transparency

 

 

Purchasers are demanding more information about the prices that providers charge and the government is giving it to them. Earlier this year, CMS released a trove of hospital pricing data for the first time showing significant variability in cost. Cost-conscious employers are making transparency a top factor in negotiations with health plans and providers. As more pricing information becomes public, how will consumers, employers, and insurers put the data to use and what does it mean for providers?

 

 

2.  Employers explore new options with private exchanges

 

 

More large employers are using private exchanges as a way to provide healthcare benefits to their workers. This trend will likely grow in 2014 as employers continue to explore strategies for holding down costs, shedding the administrative burden of providing coverage, and expanding plan choice for employees.

 

 

3.  Pharmaceutical supply chain security: Combating counterfeit drugs

 

 

A new federal law – the Drug Quality and Security Act – is aimed at eliminating counterfeit medications in the drug supply chain. The law imposes a tight timetable on implementing the first step toward a nationwide “track and trace” system to document the journey of prescribed medications from manufacturer to patient. Drug makers will be required to begin tracking prescribed drugs in large bundles or “lots” starting in 2015. And in 2017, the industry must begin assigning serial numbers to individual “saleable units” of every prescribed product sold in the U.S. PwC estimates that the program will cost drugmakers $10 million to $50 million per manufacturer.

 

 

4.  Medicaid’s march toward managed long-term care

 

 

States are struggling to contain rising Medicaid costs in the face of an aging baby boom population that has not saved enough for health costs in retirement. Demographic and economic trends point toward many years of rising long-term care costs. States are looking to a familiar tool – managed care – to help hold the line on long-term care spending. Ten years ago, only eight states had a Medicaid managed long-term care program; in 2014, that number is expected to climb to 26.

 

 

5.  Companies rethink their roles in the new health economy

 

 

In the new health economy, money will move differently as consumers exercise greater control over spending and more companies compete for a piece of the healthcare dollar. Competition from new entrants, incentives to take on more risk, pressures to reduce costs, and the growing influence of consumers are all forcing healthcare organizations to rethink who they are and what they offer. Many are striking new alliances, marrying their own healthcare experience with the likes of big box retailers, technology companies, and wellness companies to diversify their brands and gain an edge over their competitors. Others are forging ahead on their own by expanding beyond their core competencies.

 

 

6.  A new mantra for healthcare innovation: fail fast, frequently, and frugally

 

 

Converging forces in 2014, including reduced government funding, will necessitate a new and leaner innovation model. Instead of fearing failure, organizations must embrace it. A discovery process focused on failing fast and frequently can help arrive at solutions in less time and with less cost. By fostering an innovative culture that brings more rigor to the process and views failure as a means to an end, companies can achieve high-impact innovations in less time and at lower cost.

 

 

7.  Social, mobile, analytics, and cloud technologies prime health industry for new business models

 

 

A single ecosystem of mobile sensors, devices and apps are enabling us to track everything from steps we walk to the calories we consume. Although separately these tools are not new, they are now being used to improve the practice of medicine and coordination of care. Instead of prescribing drugs, providers are prescribing exercise regimens and using data to keep patients on track to meet health goals. In 2014, the trend has the potential to fundamentally alter how health organizations interact with patients and one another to deliver care and manage health while keeping costs down.

 

 

8.  Corporate venture capital picks up the slack

 

 

As traditional venture firms pull away from funding life sciences start-ups, corporate capital will pick up the slack in 2014. With many corporations cash rich – but R&D poor – new venture funds may be a solution for stagnating innovation. New and unusual marriages are occurring between corporate cash and traditional venture capital, injecting not only money, but fresh innovative thinking and industry insights. Start-ups can benefit from a steady stream of funding that can last throughout the development phase and draw upon corporate expertise to help commercialize products.

 

 

9.  Technology is redefining the healthcare job market

 

 

With millions of new customers, the rise of quality-based payments, and more discerning consumers, healthcare organizations require new workforce capabilities that stretch beyond traditional clinical roles into more convenient, consumer-focused technologies.  Healthcare organizations need to use technology to extend care and build a workforce that is skilled at engaging digitally with patients.

 

 

10.  A new lens on clinical trials

 

 

In 2014, as the pharmaceutical industry comes under increasing pressure to replenish its product pipeline faster and with fewer dollars, drugmakers must re-think their research methods. Precision medicine and the continued focus on specialty products are giving rise to new clinical trial designs, such as non-randomized studies. These changes will present new challenges for drugmakers as they work to ensure the integrity of their data, recruit appropriate patients, and determine product pricing. New technologies, such as virtual clinical trials, may offer a solution. According to HRI, nearly 70 percent of consumers surveyed agree that biomedical research is an important economic growth engine, but they are unsure of their role.

 

 

The list is informed by HRI research and the input of PwC’s Health Industries professionals who work with hospitals, physician groups, pharmaceutical and medical device companies and employers. In the fall of 2013 HRI also conducted a poll of 1,000 U.S. consumers on a range of healthcare topics covered in the report. The report provides further analysis of the top issues for 2014 and outlines implications for key stakeholders. For the full report, videos with industry experts and graphics illustrating each issue, visit: www.pwc.com/us/tophealthissues.

About Post Author

Darshan Shah

Darshan Shah is a young entrepreneur, digital marketer and blogger. He’s founder of <a href="https://TheWebReach.com">TheWebReach.com</a> and provides Digital Marketing services like SEO, <b><a href="https://TheWebReach.com">Guest Posting</a></b>, Inbound Marketing and many more. He loves to help people to grow their business worldwide through his digital marketing knowledge.  He’s enthusiastic about creating blogs and writes creative content for the readers.
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