Top 10 issues impacting healthcare industry in 2016

2015, a year marked by transitions for hospitals, definitely wasn’t an easy one for executives or facilities. But what does 2016 have in store for hospitals? PricewaterhouseCoopers’ Health Research Institute answers that question. 

In the fall of 2015, PwC’s HRI commissioned an online survey of 1,000 U.S. adults representing a cross-section of the population. The survey collected data on consumers’ take on healthcare and their preferences related to healthcare usage.

What it found was that this year the healthcare industry is going to center around … TECHNOLOGY!

Yes, it’s an election year, and, yes, drug pricing has already become an issue on the campaign trail. But what really stood out in the survey was the major influence technology will have on the healthcare industry.

For example, 2016 will be the year that millions of consumers for the first time will:

have their first video consults

be prescribed a health app, and

use their smartphones as diagnostic tools.

This in turn will cause clinicians to practice in new ways, like:

incorporating insights from data analyses into their treatment plans

conducting e-visits with behavioral health patients, and

receiving alerts from remote patient monitoring devices sent home with newly discharged patients.

Care delivery is definitely changing.

Other insights garnered from the survey:

the use of health-related smartphone apps have doubled in the last two years (16% to 32%)

millennials, who love wearable and health apps, prefer virtual communication for health interactions

well-known healthcare brands may have a market advantage – consumers are willing to drive further for care from a well-known system, but they aren’t willing to pay more just because the systems is considered to be “best in field”

(this is a good one to pay attention to) nearly 40% of consumers “would abandon or hesitate using a health organization” if it’s hacked, and

more than 50% of consumers would avoid, or be wary of using, a connected medical device if a breach were reported.

Industry changes

So what other forces can we expect to have a big impact on the healthcare industry in 2016?

According to PwC’s HRI survey, the 10 forces expected to have the most impact on the industry in 2016 are:

Mergers: 2015 was a popular year for mergers, and 2016 won’t be any different. High-profile mergers and acquisitions will continue to make headlines, especially among insurers trying to get a greater market share and boost negotiating powers. Independent hospitals and clinician groups finding it difficult to compete on their own will look to collaborate to generate more touchpoints with customers, and large physician management companies will acquire complementary groups.

Drug prices: Surprise, surprise, drug prices will be another bone of contention in 2016. Consumers are sick of struggling to pay the high prices, and presidential candidates have created plans targeting drug prices and high out-of-pocket costs. Worried about even more pressure, the pharmaceutical industry is in search the “just-right” pricing formula. Industry experts believe collaboration with insurers, patients and new value assessment groups may be the key ingredient.

Mobile care: We will see a big shift this year with the use of smartphones, connected medical accessories and apps. Reason: Consumers want “anywhere, anytime” monitoring, diagnosis and treatment. Chronic disease management will lead the way with this trend.

Cyber security concerns over medical devices: According to the study, internet-connected healthcare products are estimated to be worth $285 billion by 2020. This is good because it helps with providing virtual care. But with this connectivity of mobile apps and medical devices comes the concern of hacks and breaches. The news is already full of security breaches, and it’s only going to get worse as more and more medical devices require cyber security.

Money management: 2015 saw patients reach their boiling point of dealing with medical bills. In 2016 they’ll be looking for new ways to manage their healthcare spending. The 2015 HRI survey found that more than half of 18- to 34-year-olds would use a service that helped them plan for medical expenses. Now, the healthcare industry will be looking to other industries to model new healthcare spending management models after.

Behavioral health moves to front of stage: Mental health issues have suffered under a stigma for years, but that’s changing in 2016. Employers are opening their eyes and realizing that mental health is just as important as physical health. According to the HRI survey, mental health conditions cost U.S. businesses more than $440 billion annually. So now that behavioral health is emerging out of the shadows, employers and insurers are addressing issues with behavioral healthcare access.

Community care collaboration: Reducing healthcare costs is a major focus in 2016 as it has been for years now. But to do that, hospitals will have to look for alternatives within their communities for lower-cost care. That may mean partnering with retail clinics, many of which are expanding the services they offer. Also, new “bedless” hospitals are starting to pop up. They offer emergency rooms, observation units, operating rooms, outpatient facility for specialty care, but not the expensive inpatient beds. In addition, “patientless” hospitals are also emerging where all care is provided virtually.

New databases: The healthcare industry has been struggle with traditional databases for years now. But in 2016 new “non-relational” databases are arriving to help the industry use their data in new ways. These high-tech databases will bypass the rigid structure of current electronic health record databases, and make it easier to analyze many different forms of data together.

Welcome biosimilars: According to the PwC report, “biosimilars are a near substitute for an original brand drug, sold at a discount once the original loses patent protection.” They’re derived from living organisms, unlike generic drugs which are derived from chemical substances. These drugs have finally entered the U.S. market. Currently, at least four biosimilar applications are pending FDA review in 2016 and another 50 are in the FDA review process. It’s expected that biosimilars will bring significant price discounts to the industry, which may be the relief needed for rising drug costs and high-deductible health plans.

Medical cost mystery: Why is it so hard to identify the cost of medical services? Good question. But the healthcare industry needs to find out because healthcare consumers and other buyers are demanding better value for their dollars. Price transparency will be vital to consumers in 2016 and watching your spending will also be imperative. Reviewing processes and procedures, and finding more efficient ways to do them, will make it easier to calculate costs.