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Extreme Makeover for Healthcare Next Year? PwC Publishes its Top Health Industry Issues for 2011
Date:12/20/2010

he difference between profit and losses. PwC's research found significant demographic and geographic differences in consumers' willingness to seek all their care within ACO-like organizations, indicating the need for consumer segmentation strategies.

4. Nowhere else to cost shift: Consumers could continue to reduce utilization

Higher health insurance premiums, steeper deductibles and larger coinsurance mean consumers are spending more out of their own pockets for healthcare, and 60 percent of consumers surveyed by PwC expect to pay even more in the future. Yet cost shifting may have reached the end of the line as increased price sensitivity has caused consumers to cut back on utilization. PwC forecasts a trickle down effect, starting with physicians and pharmaceutical companies as consumers reduce office visits and drug spending, followed by reduced sales of other medical products, fewer lab tests, imaging scans and other diagnostics.  The danger lies in whether short-term cost avoidance could lead to more expensive conditions long term.  

5. M&A: Deals will bond the familiar and unfamiliar as organizations look to fill strategic gaps

Mergers and acquisition activity among all the healthcare sectors are expected to continue to trend upward in 2011.  Within the pharmaceutical and life sciences sectors, PwC expects deals to focus on strategic mid-market transactions valued between $100 million to $500 million; international growth could yield larger transactions.  Increased consolidation is expected among payers, physicians are aligning with hospitals, hospitals are merging with other hospitals and health systems, and recent deals reflect blurring of the lines between the payers and providers sectors. Competition for acquisitions is likely to come from private equity funds investing in healthcare.  Though consumers are wary of the benefits of
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SOURCE PwC
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