PwC's Health Research Institute has predicted the top 10 issues facing healthcare in the coming year. Insurance exchanges, consumer trepidation, drug shortages and the need for organizations to prove value promise to be among the hallmarks of a 'seminal' year.
All these will continue to evolve against a backdrop of political and economic uncertainty in the United States, according to PwC. In response, the firm predicts that diverse healthcare organizations will "join forces in new collaborative business arrangements," and gird themselves with contingency plans for "legislative wildcards."
With the presidential elections looming, the Health Research Institute polled 1,000 adults and found nationwide agreement about many healthcare issues:
- Healthcare and the national deficit rank equally as the second most pressing election concern after job creation on the minds of the American public.
- With out-of-pocket costs rising, nearly half (46 percent) of people surveyed by PwC said that at least once this past year they decided not to seek healthcare or pay for pharmaceuticals because of cost, and one in 10 deferred care on at least five occasions.
"2012 will be a seminal year for the health industries as businesses wade through economic, regulatory and political uncertainty," said Kelly Barnes, U.S. health industries practice leader at PwC. "One of the ways the health industry is responding to these uncertainties is by connecting in new ways with each other and their consumers as they rethink existing business models and previous notions about competition, cooperation and collaboration."
PwC's top issues for healthcare in 2012:
- Showing value. Health organizations will have to demonstrate they're delivering better value, says PwC, and those that don't will be penalized. In 2012, health organizations will need to adapt to new performance- and value-based payment structures, and insurers will look to cut administrative costs and keep premiums down.
- Higher deductibles and co-pays mean consumers cut back. As consumers continue to defer care because of rising out-of-pocket costs, health organizations need to counter the resulting decline in revenue. In addition, insurers and employers will need to carefully monitor the impact of care deferral on workforce health and productivity.
- Providers, payers tout pop health. Health insurers committed more than $2 billion in the last year to acquire or align with physician groups, clinics and hospitals, says PwC. With the move toward population health, a further uptick in payer-provider relationships in 2012 is likely as these players team to integrate care, share information and participate in new payment models with incentives for shared savings. Nearly three-fourths of consumers (72 percent) surveyed by the firm said they would prefer health organizations that deliver a wide range of comprehensive health-related services versus organizations that focus on specialized areas. Meanwhile, 38 percent of those surveyed believe an integrated approach would lower costs and 36 percent expect that quality of care would increase.
- Drug shortages loom. Sudden increases in demand for certain drugs, discontinued products, manufacturing delays and quality issues among generic drug manufacturers are creating a shortage of some drug supplies and raising concerns about patient care and safety, PwC reports. In 2012, there may be heightened focus by the FDA, hospitals and pharmaceutical companies on supply chains, real-time inventory tracking and quality-control to counteract the risk of rising counterfeit drug and gray market activity.
- Health informatics catch on. In the year ahead, PwC sees more and more health organizations investing in health informatics and forming data-sharing partnerships with other organizations that have a mutual interest in new uses of information – to improve health outcomes, coordinate patient care, identify population health trends, speed targeted product time-to-market and identify and manage high-risk populations. Before data assets can be maximized, however, the firm says the industry will need to address issues around data collection, quality and integration, develop scalable analytical tools, address privacy and security, and overcome the shortage of skilled informatics professionals and trainers.
- Privacy and security become differentiators. Increased risks and the threat of stiffer breach enforcement actions mean health organizations will focus more on information privacy and security in 2012, says PwC. The stakes are high also because consumers consider privacy and security issues a differentiator. Sixty percent of consumers surveyed by the firm said they would be comfortable having their health information shared among healthcare organizations if doing so would improve coordination of their care – at the same time, nearly one-third (30 percent) of consumers said clear privacy and security policies were a top consideration in choosing one hospital over another.
- Health plans compete via exchanges. In October 2012, states are expected to begin certifying health plans for participation in insurance exchanges. Payers planning to participate in state exchanges can expect new growth opportunities but also challenges as they shift from a wholesale to a retail approach, focus on population risk management and compete head-to-head for consumers' business. Thirty-seven percent of consumers surveyed by PwC think health insurance exchanges will make it easier to find and purchase a competitive health insurance plan and more than one-third (34 percent) said they would have a less favorable impression of a health insurance company that decided not to participate in their state's health insurance exchange.
- Big pharma gets smaller. As pharmaceutical companies develop new strategies to deal with the decline in patented drug sales and new regulatory realities, they could shrink in 2012, according to PwC. Following two years of mega mergers and acquisitions, big firms are reducing their workforce and experimenting with new approaches to R&D, sales and marketing. The biggest casualty could be U.S.-driven R&D productivity. Six in ten people surveyed by PwC view pharmaceutical and biomedical research an important engine for economic growth.
- Social media grows apace. Nearly one-third of survey respondents (32 percent), including half of people under the age of 35, have used social media channels for healthcare purposes, such as connecting with health organizations and other people with shared health interests, PwC reports. Healthcare organizations are experimenting with building stronger connections and communities through social media, and the trend is expected to grow in 2012 as social media becomes part of an organization's overall strategy to improve healthcare and outcomes.
- Healthcare dominates elections. Healthcare promises to be crucial to the presidential race – especially with the Congressional "super committee" considering funding issues and the Supreme Court due to decide on the constitutionality of the individual mandate this coming summer. Healthcare organizations will have to incorporate uncertainty into scenario planning, says PwC. They will need to allocate resources along multiple strategic paths and plan for contingencies that might affect strategic plans and growth assumptions.
PwC's report is available for download at pwc.com/us/tophealthissues2012.