This post features PricewaterhouseCoopers’ Health Research Institute’s predictions for the top eight health industry issues of the coming year.
- New Medicare Reimbursement System. Hospital coffers will feel the impact of a new Medicare reimbursement system that’s designed to better recognize the severity of patient illnesses. Specialty hospitals and others that see less acutely ill patients could see their revenues decline, while urban hospitals that treat sicker patients could benefit.
- Focus on Drug Safety. Increased oversight and authority by the U.S. Food and Drug Administration may boost the public’s trust in drug safety, but also could add to the regulatory burdens on pharmaceutical companies. The FDA now may require drug companies to conduct additional clinical trials to assess risks associated with a drug after it has been released to the public.
- Retail Clinics Cause Changes: A surge in the number of retail health clinics, such as those in drug stores, will force states, payers and policymakers to think about the best ways to deliver primary care. Hospitals could benefit from retail clinics if they draw uninsured patients, while pharmaceutical companies may need to market more to the nurse practitioners who run the clinics.
- Individual Health Insurance. The market for individual health insurance could get much broader if other states and the federal government follow the lead of Massachusetts, which requires that all residents have coverage. Individual coverage also could get a boost from Republican proposals for tax incentives to help consumers buy individual policies.
- Health-Care Coverage for Retirees. Retirees are playing a greater role in funding their health-care coverage, whether they like it or not. As the population ages and health-care costs increase, employers are shifting more responsibility for retiree coverage to the retirees. In a PricewatehouseCoopers survey of multinational company executives, 73 percent said they needed to reduce contributions to retiree health coverage and cap benefits.
- Large Pharmas Feel Pressure: Big pharmaceutical companies, groaning under the high price of drug development, will keep buying and collaborating with life-science companies to stock their product pipelines. But biogenerics — generic copies of biological drugs — could crimp drug company revenues.
- Regulatory Compliance: New IRS rules will mandate that nonprofit hospitals uniformly disclose more details about the community benefits they provide, such as charity care. Hospitals also will have to be more forthcoming about executive salaries and benefits, because of pressure to justify their tax-exempt status.
- Emerging Asia Pharma Industry: Asia is poised to become the world’s largest pharmaceutical consumer and producer. American drug companies have increased their marketing and clinical trials in Asia because of the market’s size, increasing wealth and growing awareness of health-related issues. On the production side, much of Asia provides high-quality, inexpensive labor. But watch out: Several Asian drug companies aim to become worldwide pharmaceutical powerhouses, not just contract manufacturers.
For more information, I encourage you to download the full report Top Eight Health Industry Issues in 2008 . The report reminds us all that with this year being an election year in the US, there is more debate among the politicians on how the federal government could or should change the current system. Meanwhile, consumers are taking more responsibility for decisions about their health insurance, drugs, and providers, and more government regulations are requiring public disclosure of quality, safety and costs. The report says that 2008 will be a pivotal one for the health industry, with new market competitors, financial pressures, and regulatory requirements.