In January 2019, consulting giant PwC issued a report on key issues facing healthcare in 2019. In the study, Top health industry issues of 2019: The New Health Economy comes of age, the consulting firm said the U.S. healthcare industry is starting to look less like a special case – a large segment of the U.S. economy with its own unique quirks – and instead beginning to behave more like other industries.
The report identified six overarching issues facing healthcare in 2019:
- Digital therapeutics and connected care reshape the life sciences industry.
- Your company’s new, upskilled health worker of the future is you.
- Tax reform has only just begun for healthcare companies.
- Creating the Southwest Airlines of healthcare.
- Private equity – healthcare’s new growth accelerator.
- The Affordable Care Act in 2019 – still alive.
The story reporting on the 2019 PwC report was one of the most read in 2019 in Healthcare IT News. So Healthcare IT News decided to revisit the story and PwC to see what the consulting firm has to say about these issues now that the year is coming to an end.
Healthcare IT News went straight to the top, interviewing Ben Isgur, leader of PwC’s Health Research Institute, the organization that issued the popular report. Following is the interview with Isgur, reviewing the aforementioned six areas of PwC exploration for 2019.
Q. The first PwC prediction for 2019 was that “digital therapeutics and connected care (would) reshape the life sciences industry.” What has happened in the life sciences industry this year with regard to digital therapeutics and connected care?
A. We are seeing continued progress in this area. For example, there is a huge shortage of behavioral health providers and the use of digital therapeutics is one way to address this shortage.
There are now approved apps to address cognitive and brain functions and treating conditions like ADHD and depression. Technology driven treatments and connected care ultimately help consumers with access and a better treatment experience.
“Technology driven treatments and connected care ultimately help consumers with access and a better treatment experience.”
Ben Isgur, PwC Health Research Institute
Q. PwC’s Health Research Institute in January said, “Your company’s new, upskilled health worker of the future is you.” How did this turn out in 2019?
A. This one is in progress. Companies are making investments in up-skilling their workers through training and education. The first movers are well underway, and the second wave are just starting to implement programs and plans to level up the workforce around digital technology.
Health organizations that have not put together a digital upskilling plan will find themselves at a disadvantage going forward.
Looking ahead, this will remain a priority in 2020. When asked about workforce strategies for this year’s report, executives repeatedly pointed to digital upskilling and emerging technologies as a top priority.
Q. “Tax reform has only just begun for healthcare companies.” This was another of your insights for the year. ahead What is the status of tax reform right now in healthcare?
A. The Tax Cut and Jobs Act has been in effect for a couple of years now. For many companies, they have gotten lower corporate tax rates – leaving more revenue for investments, particularly in technology and infrastructure.
Additionally, one concept that came to life in 2019 and will continue to do so in 2020 is the idea of tax opportunity zones and the potential for companies to invest in underserved areas of things like social determinants of health and community housing.
Q. The Health Research Institute said, “Creating the Southwest Airlines of healthcare,” would be important in 2019. How is this coming along?
A. We saw progress in this area and will continue to see how affordable, consumer-centric care models evolve in 2020. The price pressures in 2019 revealed to us that what is driving healthcare costs is price and not utilization. That led us to this major issue, which is how health companies are going to start to develop lower cost options.
We already are seeing retail health clinics, urgent care clinics, telehealth and virtual health services with published prices, and sometimes even bundling a whole suite of primary care services together for one cost. These primary care services are advertised not just for insured patients but also for uninsured patients.
The big issue we see going into 2020 is a tsunami of high prices in inpatient costs and new advanced therapeutics such as gene therapies.
Q. “Private equity – healthcare’s new growth accelerator.” This was another area of importance PwC identified for 2019. What is happening here?
A. In 2019, private equity activity in healthcare ramped up – especially in physician specialty groups and convenient care. In 2020, we are anticipating deals that help companies create archetypes of the future for these health systems and health organizations. Meaning, companies are asking, “What do I want to be when I grow up?”
Do they want to be known as the consumer leader, product leader? The deals will be built around acquisitions and partnerships that build and align with the future strategic vision.
Q. You concluded your look at 2019 in January 2019 by citing the continuing importance of the Affordable Care Act. What has happened this year with this key program?
A. The Affordable Care Act is still here and it’s still the law of the land. We are about to move into an election year and there will no doubt be a lot of rhetoric and political talk around an ACA replace and repeal.
For 2020, we do not see any massive political change that is going to result in a major rewrite of our healthcare system or healthcare policy. The focus in 2020 will be on the states, in particular the states that still have not expanded Medicaid.
In addition, 2020 health policy may continue the conversation on price transparency, surprise and balance billing, and drug pricing. These are all issues that affect the consumer’s pocketbook.
Twitter: @SiwickiHealthIT
Email the writer: [email protected]
Healthcare IT News is a HIMSS Media publication.
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