Healthcare Cost Reduction Analysis

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Health Care Industry Cost Reduction Analysis

It can be hard to distinguish the signal from the noise surrounding the healthcare industry these days. And the decibels will only rise in 2015, especially as the U.S. Supreme Court is set to weigh in on a critical facet of the Affordable Care Act and 2016 presidential contenders are beginning to offer their healthcare prescriptions.

Among the dim and uncertainty, however, some clarity can be found. Indeed, the immediate future for the healthcare sector can be summed up by these trends, which Strategy& and PwC have dubbed the New Health Economy:

  • Consumers will increasingly play a decision-making role in their healthcare coverage and treatments.
  • The federal government will further solidify its position as healthcare market maker.
  • Insurance reimbursements will become stingier.
  • Employers will look for ways to remain paternalistic by exploring new care and funding models such as bundles.

Despite a shaky start, the new insurance marketplace is having an impact; a total of 6.7 million people had enrolled through the federal and state exchanges as of November 2014, and insurers are planning to offer more products in more states.

Of course, if the U.S. Supreme Court rules in favor of the plaintiffs in King v. Burwell and outlaws federal subsidies for people living in states without their own insurance exchanges, the ACA’s insurance market will have been dealt a heavy blow. But it would not be fatal — many states are already developing workarounds to continue subsidizing coverage.