Healthy Industry Cost Reduction Future Trends

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Top Health Industry Trends to Watch for 2015 includes the following insights

  • Do-it-yourself healthcare and mobile applications: technology, convenience, and cost-consciousness all play into this issue. Technology companies are building mobile health tracking devices as well as online applications. Hospitals and private health care professionals will need to incorporate this type of patient input into their diagnostic and patient health management tools.
  • With so much more patient data online, privacy and data protection is a major issue. Patients want convenience, so finding “the right balance between privacy and convenience will be challenging.”
  • 20% of all healthcare costs in the U.S. are spent on the “costliest 1% of all patients.” These include aging baby boomers and the chronically ill and will be the focus of industry attempts to rein in costs.
  • PwC sees a “growing conflict between drug access and affordability” that “will create fresh pressure for data that show these expensive medications work better than others and are worth the premium.”
  • There is a growing movement to make clinical trial results public, through regulations and the OpenFDA initiative, which was launched last November.
  • The entire industry is dealing with the influx of newly-insured patients under the ACA and must develop ways of meeting their needs while containing costs.
  • State regulations are expanding the ways in which physician extenders (nurses, physician assistants, pharmacists, etc.) can treat patients. Physicians are becoming more comfortable with this model, which is expected to grow substantially over the next five years, but not all are on board. They will all have to come to terms with the model.
  • In order to stay competitive, industry players are partnering on “innovative products and services.” HRI analyzed Fortune 50 companies and “found that 40% – or 20 out of 50 – pursued new healthcare partnerships in 2014.” In another survey, 58% of consumers said “they would be more likely to choose a healthcare company that partnered with others to improve services.”

Deloitte, in its 2015 Health Care Providers Industry Outlook, comes to similar conclusions, in slightly different language. Deloitte sees the critical issues for providers in 2015 as: containing health care costs and proving value, moving to value-based care, adapting to and absorbing the new patients enrolled in the ACA, scaling up services, responding to a changing regulatory environment, and managing risks such as privacy and security.

  • The U.S. health care system is moving from “volume- to value-based care,” in order to “control/reduce costs, improve outcomes, and obtain more value for money spent.” Physicians are most impacted by this trend and are moving from private practice to “an employed model” and acquisition by health systems.
  • Consumers are driving many market changes, with more access to data and increased cost concerns.
  • Consolidation will continue and partnerships will grow, both long- and short-term.

A more recent post from PwC, “Medical Cost Trend: Behind the Numbers 2016,” expects spending growth in the U.S. health economy to slow in 2016, but still grow faster than overall inflation. As the summary says, affordable healthcare “remains out-of-reach for many consumers.” “Amino Harnesses Health Industry Data for Consumers,” New York Times, Oct. 15, 2015.

  • This digital health post from the New York Times discusses the growing number of online consumer applications of health care spending data. Experts cite demographic trends and a more health-conscious population, but say the largest driver is the trend to low premiums with high deductibles fueled in part by the Affordable Care Act. Now, “people are shopping more aggressively for health care because they are paying more of the bill themselves.”
  • The main example used in the article is Amino, a San Francisco start-up that has collected very detailed data on billings and payments for “nearly every practicing doctor in America and the treatment of more than 188 million people” that it will make available to consumers in applications.

“Health Care Industry Rethinks Leadership, Delivery of Care,” US News, Aug. 5, 2015.

  • The Affordable Care Act has placed “a new emphasis on payment reform, prevention and population health.”
  • Demand for entrepreneurial leaders is increasing due to “new competitive pressures, along with a shift from fee-for-service medicine system based on providing high-quality care at lower cost.” Hospitals and private practice physicians alike are competing with retail outlets like CVS that provide convenient care and keep the consumer costs down.
  • An April 2014 report from PwC’s Health Research Institute reinforces this view. The survey found that consumers would switch from “traditional care venues” to “more affordable and convenient alternatives. Nearly one in two respondents said they would choose new options for more than a dozen common medical procedures, such as using an at-home kit to diagnose strep throat or having chemotherapy administered at home.

Another page on PwC’s HRI site tracks health technology and innovation. It addresses digital technologies, including wearables and innovations to bring the patient closer to care in time and distance. A few case studies are included.

Accenture Consulting briefly describes healthcare IT trends in Top 5 eHealth Trends. I’ve combined them below:
• Wearable devices and personalized healthcare options
• Online systems that pull together health monitoring data from a variety of sources