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Interview: Top Healthcare Trends in 2007

Posted on: Tuesday, 26 December 2006, 00:00 CST

United Press International interviewed Hindy Shaman, director of the health research institute at PricewaterhouseCoopers about its recent report, Top Seven Health Industry Trends in '07.

Q: One of the trends identified in the report is taking more initiative in areas like covering the uninsured and funding research -- but also regulation. What are the upside and downside of state leadership?

A: They're taking the initiative in the absence of a clear agenda from the federal government.

The positive of that is more innovation and road-testing of pilot programs at the state and local level before they bubble up to the national level. It allows for innovation and creativity, but with actual results before the policies are applied to a larger population.

The downside is that you could end up with a patchwork quilt of regulations that make it difficult to work across state boundaries.

Q: The report also says transparency is now a mandatory requirement for doing business. What are the forces behind this?

A: There are several forces at play.

People with high-deductible health plans are now paying more out of pocket. That is making them want to know prices up front. If they're evaluating two different treatments, they want to know which is the better value. If they're comparing doctors, they want to know about quality.

There is also the government. Government is saying people need more information. Congress has looked at the lack of information, and prices that don't make sense. Emergency rooms in different cities can have wildly different prices -- so can emergency rooms in different parts of the same city.

The Healthcare Price Transparency Act goes into effect in October, and it requires federal agencies to disclose price and quality information.

Q: One of the top trends in the report is the importance of health information technology, but the report also points out that few physicians have electronic health records, and only one in three consumers think they are important for quality care. Is that likely to change in 2007?

A: We think there will be more health IT. The United States has the most advanced clinical technology, but not digital backbone. In that respect, healthcare has been slower to adopt technology than other industries.

But health IT will play a role in increasing efficiency and reducing costs and errors.

We will see more involvement by the government and individuals in 2007. The government is helping to spread the costs of health IT among different payers.

We are also seeing more results and more value from early adopters of the technology.

Q: Why will 2007 be a watershed year for consumer-directed health plans?

A: We think the next year will be a real tipping point for consumer-directed healthcare.

Few people are enrolled, but now we are beginning to see the results of the plans.

What we're seeing so far are mixed results. Some studies have found they lower costs and lead to better consumer decision-making. Others say, if given the choice, people would like to opt out. They say they're not happy, and there are high administrative costs.

The number of people signing up is growing, but if the American workforce doesn't like the road, they'll get off at the next exit.

Q: Forty-two blockbuster drugs will lose their patents in 2007. What does that mean for the brand-name pharmaceuticals industry?

A: There will be a huge impact.

It means more pressure from generics, and more scrutiny of prices.

There are consumer-directed health plans, and also more Americans who have to buy drugs out of pocket, and that means more price sensitivity.

The new Congressional leadership has also said drug prices will be high on the agenda, especially in terms of Medicare Part D.

Our consumer survey found the American public is very aware and sensitive to drug prices. The industry also has relatively transparent prices.

Innovative pricing strategies will be needed.

Q: What are some examples of innovative pricing strategies?

A: Some companies are offering rebate programs, while others of offering comparable prices to generics to maintain market share. Other companies are marketing their own generic products.

Q: Obesity is the new smoking, according to the report. Explain what that means.

A: We think next year more public health campaigns will address obesity. The war on obesity is going to be big. It will make super-sizing politically incorrect.

We're already seeing the beginning of this with bans on the use of trans fats, like in New York City.

The 400,000 deaths a year caused by obesity make it a larger public health problem than smoking and heavy drinking.

Jane Fonda used to be the biggest promoter of physical fitness. Now it will be employers offering fitness promotion programs.

Q: Evidence in the report says smaller, more agile companies will have the advantage in 2007. Why is that?

A: We're seeing the rise of retail medicine: clinics that will see you with no appointment, little waiting time and straightforward prices. They address the need for access to care that is close by and available for urgent needs. They're setting a new bar for service in healthcare.

Hospitals and physicians are facing competition from the new model. Like after Federal Express raised the standard for package delivery, consumers now have new expectations.

Q: Who will be the biggest winners and losers in 2007?

A: The biggest winners will be entities that embrace change and are committed to publicly sharing information.

The biggest losers will be those that stick with the status quo and won't share prices or the quality of their outcomes.

Source: United Press International

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