Key Highlights from the ‘Deloitte – 2015 Healthcare providers outlook United States’ Article.

Financial

    • 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 $5.6 B 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

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