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 $5.6B 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

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