Key Highlights from the ‘Deloitte – 2015 Healthcare Providers Outlook United States’ Article.
- The US is the only country without a Healthcare budget
- US spending per capita is roughly 2X vs other developed economies
- Estimated Healthcare expenditure: $ 2.8 trillion in 2013 17.7% of GDP
- Projected to grow by an average of 4.9% between 2014-18 – to 17.9% of GDP by 2018
- Costs are driven higher due to economic and demographic trends – more patients due to an aging population and regulatory changes (i.e. 2010 Affordable Care Act) and greater access of the newly insured
- Advances in diagnostics and therapeutics continue to drive costs higher – i.e. unraveling the human genome, targeted therapies, and new medical devices
- Move towards Value Based Payments (i.e. ACOs) and pay for quality to reduce costs
- Physicians anticipate Value Based Payments to make up 50% of their total compensation in the next 10 years
- Smaller providers (e.g., single hospitals, independent physician groups) in danger of exclusion from more narrow networks.
- Employers shifting health insurance costs to patients through high deductibles – patients more price sensitive/ consumerism
Industry Structure & Reforms
- Significant regulatory changes, technological innovations, financial pressures, and market dynamics – resulting in rapid consolidation among health care providers
- Physicians are rapidly moving from private practice to an employed model and are being acquired by health systems and health plans – both vertical (health systems acquiring physician practices, ambulatory centers, diagnostic centers, home care services, and durable medical equipment and wellness companies) and horizontal (hospitals acquiring other hospitals)
- Cross-sector convergence expected to increase – it will be more likely for a health plan to offer clinical services — both professional and technical — and for health care providers to offer health care financing products.
- Healthcare reform-related programs requiring clinical integration (accountable care organizations, medical homes, bundled payments) have accelerated adoption
- Healthcare information security breaches on the rise – cost the industry up to $5.6B annually
- Federal and state policy makers will continue to add to the complexity, i.e. ICD-10, 340B, meaningful use, ACA, transparency, and security and privacy