This posting is based on a Quarry-sponsored study of the U.S. healthcare industry, specifically focusing on the Research Triangle Park (RTP) region of North Carolina. See below to download a free copy of the full Healthcare Report.
One word was mentioned in almost every interview with healthcare industry business leaders, with varying degrees of emphasis and concern: reimbursement. Most commonly, it was used to address the divide that exists between Payors on the one hand and Patients, Approvers (the FDA) and, in some respects, Innovators (pharmaceutical companies) on the other. Here are three areas that speak to the gorilla in the room.
A cultural divide. The insurance industry is, by its nature, risk averse, profiting by minimizing its exposure. The drug-discovery programs of pharmaceutical companies are inherently high-risk, high-return ventures. And while insurers show reluctance in embracing new technologies and adding new products to their formularies, the pharmaceutical industry relies on the sales of a steady stream of innovation.
Differing expectations. Payors and Approvers set differing benchmarks on what they expect from Innovators, leaving the Innovators caught in between. While Payors seek better value, Approvers seek uniquely better outcomes. So even if a drug meets FDA criteria for approval, it will still need to meet a different set of criteria to be listed on an insurer’s formulary.
Private vs. public insurers. In some cases, Medicaid offers better coverage than for-profit insurers. For instance, patient education around type-1 diabetes is covered by the public insurer (assumed to help poorer patients) but not by for-profit insurers (which assume that wealthier patients should pay for educational services). A possible case of penny wise, pound foolish on the part of private insurers, but one which may find resolution with the new administration’s commitment to preventative care and the resulting patient-education programs, particularly for children.
With healthcare reform at the top of the U.S. federal government’s agenda, a revised model for managing healthcare costs and reimbursement will clearly be a critical part of the discussions and final outcome.
Key challenges for the healthcare industry include:
- Will healthcare reform improve the health of Americans while still ensuring the vitality of the healthcare industry?
- Public health experts agree that the best way to control healthcare costs is to get Americans to eat better and exercise more, thus avoiding the ensuing chronic (and expensive-to-treat) complications of poor health. Who will lead the charge on these prevention initiatives? Who will pay? And who will monitor their success?
Full Healthcare Report available [free]
Click the following link to download the free healthcare report:
What about the Patient? Exploring 3 New Paths for RTP to lead the U.S. Healthcare Revolution
This is a publication by Quarry Integrated Communications.