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PwC's Health Research Institute Identifies the Top Ten Health Industry Issues to Watch in 2013
New HRI report provides insight into healthcare industry's focus in the year ahead; ACA implementation, healthcare coverage, employee benefits, the new pharma value proposition, increased consumerism, BYOD and medical device excise tax are highlighted amo

NEW YORK, Jan. 9, 2013 /PRNewswire/ -- As the health industry undertakes a full transition to meet requirements of the Affordable Care Act (ACA) and to prepare for a shift in market dynamics, PwC's Health Research Institute (HRI) today published its annual list of the Top Health Industry Issues for 2013.  According to PwC US, the pace is certain to quicken in 2013 with the effects of technology, consumerism, budgetary pressures and the ACA converging on a sector that represents nearly one-fifth of the economy.

(Logo: http://photos.prnewswire.com/prnh/20100917/NY66894LOGO)

"Health organizations can hear the thundering footsteps of 30 million newly insured Americans on the horizon.  Yet they are feeling the full force and impact of federal spending cuts and pressure from states, employers and consumers to operate more like a consumer-focused, retail industry," said Kelly Barnes, PwC's U.S. Health Industries Leader.  "By this time next year, the major provisions of the health reform law will be in effect, and the health industry has a lot of work to do before then.  It's now a foot race to 2014.  The evolution of healthcare that has been in effect over the past several years will become a full-scale transformation in 2013."

HRI has identified the following ten issues as the top focus for the health industry in the year ahead:

1.

States on the frontlines of Affordable Care Act implementation
Over the next year, state officials must decide how to run insurance exchanges, whether to expand Medicaid coverage, and what type of insurance market regulation is needed. The biggest challenge states may face in 2013 will be information technology. Designing infrastructure to create a single, seamless entry point to the exchange will require some states to undergo a major overhaul of existing Medicaid eligibility systems.

2.

Consumer revolution in health coverage
Consumers' rising voice on how they spend their healthcare dollars, coupled with state insurance exchanges, is prompting the health industry to compete on attributes similar to the retail industry: convenience, price and transparency.  HRI found signs that consumers already are warming up to new ways of purchasing insurance: nearly one-quarter (23 percent) of consumers surveyed said they are likely to buy health insurance from non-traditional sources such as a retail store, up from 18 percent in 2011.

3.

Medtech industry braces for excise tax impact
A 2.3 percent excise tax on medical device companies takes effect on January 1, 2013, representing potentially $29.1 billion to the federal government over the next 10 years. The $380 billion global medical device industry is unlikely to be able to pass the tax on to its customers, but could look to its suppliers to share in the burden.  Some companies could owe more in taxes than they generate in profits, making them less attractive to investors but more enticing to larger companies looking to expand their portfolio.  The tax impact should kick start new innovation, industry consolidation and operational recalibration in the medtech sector.

4.

Caring for the nation's most vulnerable: dual eligibles
Dual eligibles – people who qualify for both Medicare and Medicaid – make up many of the 16 million people the ACA will add to Medicaid rolls by 2019.  The cost of care for duals is skyrocketing – much of it wasted due to a lack of care coordination between the two programs – and 70 percent of state Medicaid spending on duals goes to long-term care support services, such as nursing homes.  Cash-strapped states are increasingly turning to the expertise of managed care companies to better coordinate care, and they are seeking innovative solutions, such as from the technology sector, to better support home-based care and caregivers.

5.

Bring your own mobile device: convenience at a cost
Doctors and nurses are bringing their own mobile devices to work, but many hospitals do not yet have a secure enough environment to protect sensitive patient information.  Sixty-nine percent of consumers surveyed said they are concerned about the privacy of their medical information if providers were able to access it on their mobile devices.  According to PwC, only 46 percent of hospitals have a security strategy to regulate the use of mobile devices.

6.

Goodbye cost reduction, hello transformation
With reimbursement resetting under the ACA and pressure from the federal budget crisis and price-conscious consumers, hospitals are scrambling to further reduce their costs.  HRI research found that 40 percent of consumers postponed care in 2012 because of the costs.  Having already plucked low-hanging fruit with labor productivity and supply cost reductions, more hospitals in 2013 will embark on full-scale transformation efforts to redesign how they deliver care.

7.

Customer ratings hit the pocketbooks of healthcare companies
Paying for performance will take on new meaning in 2013 as consumer reviews generate penalties and bonuses for hospitals and insurers. This could mean a bonus payout of more than $3 billion for insurers and a hold back of $850 million for providers in 2013. Healthcare companies will need to invest in consumer research and education in order to take full advantage of the new payments.

8.

Meeting the new expectations of pharma value
Physicians, once the primary arbiters of pharma value, now have less say in payment decisions than insurers and large providers. The final hurdle in the long, expensive path to drug and device development is not regulatory approval, but rather reimbursement.  Though pharmaceutical and medical device companies play a pivotal role in health outcomes, they will have to prove it to earn it by demonstrating their value and comparative effectiveness.

9.

Bigger than benefits: employers rethink their role in healthcare
For nearly 70 years, employer-based coverage has been a cornerstone of U.S. healthcare - but healthcare and employers may not be inseparable.  With the Supreme Court ruling to uphold the ACA and the re-election of the President, employers have an opportunity to re-examine their long term role in providing healthcare coverage and explore alternative approaches provided by state and/or private exchanges.  In 2013, CEOs will ask tough questions about how and why so many resources are going to something that is not core to the business.  The answers will vary by company, some of which are likely to transition away from healthcare coverage while others will redesign their benefit strategies.

10.

The building blocks of population health management
Medicare's accountable care organization and patient-centered medical home initiatives laid a foundation for improving population health, but other collaborations are fueling growth in population health management.  In 2013, more companies are likely to form partnerships to build their population health IT infrastructures and to share responsibility for patient outcomes and satisfaction, data collection and analysis, member education and engagement, with a focus on at-risk populations.

The list is informed by HRI research and the collective input of PwC's Health Industries professionals who work with hospitals, physician groups, pharmaceutical and medical device companies and employers.  For this year's report, HRI also conducted a poll of 1,000 U.S. consumers on a range of healthcare topics covered in the report. The report provides further analysis of the top issues for 2013 and outlines implications for key stakeholders.  To download the full report, visit: www.pwc.com/us/tophealthissues.

About PwC's Health Research Institute (HRI)
PwC's Health Research Institute provides new intelligence, perspectives and analysis on trends affecting health-related industries. HRI helps executive decision makers navigate change through primary research and collaborative exchange. Our views are shaped by a network of professionals with executive and day-to-day experience in the health industry. HRI research is not sponsored by businesses, government, or other institutions. For more information, visit: www.pwc.com/hri.

About PwC's Health Industries Group
PwC's Health Industries Group is a leading advisor to public and private organizations across the health industries, including healthcare providers, pharmaceuticals, health and life sciences, payers, employers, academic institutions and non-health organizations with significant presence in the health market. For more information, follow PwC Health Industries at @PwCHealth or visit www.pwc.com/us/healthindustries.

About PwC US
PwC US helps organizations and individuals create the value they're looking for.  We're a member of the PwC network of firms in 158 countries with more than 180,000 people.  We're committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com/US.

Learn more about PwC by following us online: @PwC_LLP, YouTube, LinkedIn, Facebook and Google +.

© 2013 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. PwC refers to the US member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.

This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

SOURCE PwC US

About PR Newswire
Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

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