The shift from volume to value; wellness and health management; system decentralization; technological advances and digitization; and consumerism are five biggest forces driving change in the U.S. healthcare industry, according to new findings from PricewaterhouseCoopers Health Research Institute. But while some of those will help grow health system revenue, others are likely to limit growth.
HRI found that the health markets positioned to exploit the shift to value-based care, such as diagnostics and therapeutics, platforms and support and wellness, will likely experience the most growth over the next decade. Health's largest market, care delivery, will likely experience a reduction in growth. That's because traditional providers will find themselves enduring "death by 1,000 cuts," as innovations and trends like virtual health siphons away services and revenues.
Of the five market-changing forces, HRI found that three will likely dampen growth. The trend with the most immediate impact will likely be the shift from volume to value, which is being driven by the federal campaign to link 90 percent of Medicare payments to quality programs, and half to alternative payment models, by 2018.
That means today's revenue could become tomorrow's expense for healthcare providers, especially for-profit organizations with business models that rely on high utilization.
Wellness and health management could be another damper, HRI found. A renewed focus on wellness and health management has the power to siphon revenues out of the ecosystem by reducing the utilization of treatments and services intended for sicker patients. Many microtrends around wellness are converging, including the hiring of dietitians and nutritionists by grocery store chains and retailers, the popularity of wearable fitness trackers, a shift in the American diet and a flurry of wellness-oriented incentives provided by employers, insurers and others.
Down the road, HRI said, new diagnostics, sophisticated analytics and modeling should help consumers better manage their health before, during and after illness, reducing their need for more costly care and treatment. Organizations will be forced to learn new ways of determining how much consumers are willing to pay for these services, and build new business models around them.
Decentralization will also dampen growth, said HRI, albeit not as rapidly. The trend is being spurred by virtual care and remote patient monitoring, the embrace of alternative venues for care, the increased use of clinician extenders and the seamless sharing of data among stakeholders.
The popularity of retail clinics is another outgrowth of decentralization. In 2006, fewer than 10 percent of consumers surveyed by HRI said they had ever been to one. This year, 42 percent of consumers said they had visited a clinic.
Technological advances and digitization, by contrast, should produce growth, said HRI. Things such as machine learning, 3D printing and the use of digital health data will likely grow the diagnostics and therapeutics, platforms and support, and wellness markets in the long-term. These advances may render healthcare more efficient, effective and automated.
Consumerism is seen as another growth driver. In the long-term, it will likely help to grow the market for platforms and support, as well as wellness, by steering consumers to options that are cheaper and more efficient and convenient, with the added bonus of helping them get healthy -- and stay that way for longer.
HRI recommends seizing what's called the "marketspace," in which buyers and sellers come together virtually. This is an area with enormous potential for growth, as health marketspaces are scarce. Consumer segmenting is also critical, since certain consumers, such as those with chronic conditions, are more likely to be traditional in their care choices and may not be as ready for the newly-emerging health ecosystem.
HRI also suggests that healthcare providers should continue to unify their data systems, including their electronic health records systems, within their organizations.