Healthcare organizations are already looking ahead into 2019, and there are six trends to be aware of for the coming year, according to PwC’s report, “Top health industry issues of 2019: The New Health Economy Comes of Age.”
The U.S. health industry is poised to continue becoming a larger part of the nation’s economy. Already at 18 percent of GDP, the industry’s position as the nation’s largest employer and growing footprint has landed it more squarely in view of all businesses and economists, which is why PwC’s Health Research Institute (HRI) has featured top business issues for all industries in its 2019 annual report.
Many of the same issues in the industry will remain year to year, but businesses should also prepare for changes in consumer preferences.
Connected care and digital therapeutics—New entrants, biopharma companies and medical device makers will bring new digital therapies and connected health services into the market in 2019, helping reshape the life sciences industry, PwC predicts. In 2017 and 2018, investors poured $12.5 billion into digital health ventures, and the FDA has already approved many digital therapies. More than half of physicians have incorporated digital therapies in interactions with patients, and the majority of consumers are interested in FDA-approved digital apps and online tools.
Upskilled health workers––New technologies like AI and robotic process automation (RPA) will bring some upskilled employees to the forefront as healthcare companies figure out how to train their employees. Workforce capabilities were a significant barrier to organizational change among 45 percent of survey respondents, according to PwC. By 2020, 35 percent of skills among workers will need to change, according to the World Economic Forum, and 20 percent are expected to rely on AI by 2022. Other workers may be at risk of being eliminated as a result of automation. Companies will need to develop a sustainable strategy to adapt to these changes.
Tax reform––Changes from the 2017 Tax Cuts and Jobs Act will continue to have an impact in 2019, according to PwC, with tax savings that can be turned into competitive advantages and challenges for those with new taxes. Healthcare organizations may have to restructure their businesses in 2019 to accommodate new rules and liabilities, as well as consider any changes to cost for medical goods or supply chain disruption.
Value line—The healthcare space lacks its own version of a Southwest Airlines with lower costs, a Costco Wholesale or an Uber solution. These companies offer value lines in products or services in their industry while healthcare costs continue to rise and the system becomes more complicated. New, lower-cost deliver models will capture the healthcare market as they continue to emerge, addressing social determinants of health and more.
Private equity influx—The rise in private equity investments in the healthcare space over the last several years will likely continue in 2019 and be an accelerator in an era of rapid consolidation. The sector has reportedly raised $624 billion for investments across industries as of July 2018. In 2019, there could be 747 private equity deals, according to a projection.
ACA impact––While the Affordable Care Act was signed into law in 2010, its effects will still be felt in 2019. Changes by Republican lawmakers during the first two years of the Trump administration will “create new winners and losers,” according to PwC. Healthy individuals and small businesses seeking cheaper premiums will be some of the winners, as well as financial services companies, while middle-class consumers looking for comprehensive care will be the losers. In addition, providers, pharma companies and medical device companies will benefit from the ongoing deregulation.
See the full report here.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."