The health industry will face a plethora of challenges in 2009, including how to deal with more underinsured, adapt to new coding methods and fund new cures in a capital-starved market, according to an annual report from the Health Research Institute at PricewaterhouseCoopers (PwC).
According to PwC, the top nine health industry issues for 2009 that health executives and policy makers face are that:
1. The economic downturn will hit healthcare: Hospitals and other providers will experience an increase in bad debt and a drop in elective procedures. Investment portfolios for all health organizations have been affected. Payors are shifting away from “relatively lucrative commercial insurers, as they are seeing a drop in enrollment and premium revenue—a trend that will likely continue if employment drops further,” the report noted. Charitable donations and investment income are down, and improvement projects involving capital outlays for IT, facilities and equipment have been put on hold.
2. The underinsured will surpass the uninsured as healthcare's biggest headache: The uninsured draw most of the attention, but the number of underinsured is growing even faster—an estimated 25 million adults qualify as underinsured, an increase of 60 percent since 2003. In 2009, the report said that “we could see more bad debts for hospitals, more cost-shifting to commercial plans and more patients delaying or foregoing care.”
3. Big Pharma will turn to M &A to build the drug pipeline: With revenue from existing pharmaceuticals slowing down and the decrease of approved new drugs in the pipeline, Big Pharma is focusing on acquisitions of smaller biotech firms to reenergize the drug pipeline. Some pharma companies may find bargains in mergers and acquisition market.
4. Prevention, from vaccines to regulation, will rise: Prevention will get a boost from drug makers, regulators and nonprofit benefactors, making vaccines a bright spots for pharma sales.
5. Genetic testing will reach a price point for the masses: The direct-to-consumer market for genetic testing may begin to take off in the year ahead as costs drop, enabling people to purchase a complete map of their DNA to identify markers for specific diseases. A federal ban on discriminating the use of genetic data could accelerate the use of these tests by the public, according to the report.
6. The internet and social networking will extend healthcare: Technology will empower patients in new ways during 2009. The increased information and growing patient-to-patient interaction over social networking platforms and websites are more prevalent, especially as EHRs become more common.
7. Hospitals must perform to get paid: Medicare, Medicaid and private payors are increasingly basing reimbursement to hospitals on performance. The Centers for Medicare & Medicaid Services (CMS) has proposed adding a new index: the total performance score—part of its move to value-based purchasing. If Congress approves, CMS would replace the current quality reporting system with one in which Medicare withholds between 2 percent and 5 percent of its reimbursements to hospitals.
8. Payors and employers will give incentives for wellness programs: More employers will give incentives to encourage responsible health behaviors and participation in wellness and disease management programs. PwC found that less than 15 percent of eligible individuals enrolled in wellness programs actually participate. In 2009, health plans will begin to play a more active role in wellness program design, tools and support.
9. ICD-10 code set will require a major resource investment: The conversion to the ICD-10 code set will be a painful and costly process that health organizations will begin in 2009. The federal government has proposed an accelerated timetable for increasing the number of code sets used for billing and clinical classifications from 17,000 to 150,000.