Although most focus has been on the effects the Affordable Care Act will have on the health care industry in 2014, the health law isn't the only major concern the industry has to address.
Although most focus has been on the effects the Affordable Care Act will have on the health care industry in 2014, the health law isn’t the only major concern, according to PwC’s Health Research Institute.
"While health insurance exchange implementation is driving headlines today — in reality the next 12 months will be marked by how well the industry addresses a range of core business challenges,” said Kelly Barnes, PwC's U.S. health industries leader, in a statement. “Businesses must address rapid innovation and competition from non-traditional players, but above all they must respond to empowered consumers as customer-centric transformation sweeps health care.”
The Top Health Industry Issues for 2014 report highlights how the $2.8 trillion U.S. health sector will reshape in the coming year, including how it will become more retail-focused. A PwC survey revealed that the customer experience in health care has been slipping.
“Health care organizations must adjust to empowered consumers, rapid innovation and, most notably, increasing competition from non-traditional players,” according to the report.
In 2014, PwC expects that the pace of price transparency will pick up as purchasers demand more information about what they are being charged. The greater control that consumers exercise over spending will mean companies need to rethink their roles.
“Competition from new entrants, incentives to take on more risk, pressures to reduce costs, and the growing influence of consumers are all forcing health care organizations to rethink who they are and what they offer,” according to PwC HRI.
The HRI Consumer Survey revealed that 23% of respondents (or someone in their household) have visited a retail clinic for health care treatment and 73% would go again.
A poll of 1,000 consumers and interviews with industry experts revealed that consumers are now distinguishing between high-quality care and high-cost care. Two-thirds say they do not believe expensive medical treatment means better quality.
Another theme for 2014 is that health care companies should be prepared to “fail fast, frequently and frugally.” Public dollars will be scarce, so organizations should introduce time and money constraints that force them to learn quickly through experimentation and failure.
Also, PwC is expecting Medicaid to expand its managed long-term care program to 26 states. By 2050 America’s population of 85 and older is expected to reach 18 million. Unfortunately, few people are financially prepared for the expenses associated with long-term care services. Half of respondents have not or do not plan to purchase long-term care insurance and 27% are unsure. Furthermore, only 25% believes they will have the money to pay for their long-term care needs, while 42% know they won’t and 33% is unsure.