A Year for Building Resilience as Uncertainty Persists: PwC's Health Research Institute's Top Health Industry Issues of 2018

NEW YORK, Dec. 12, 2017 /PRNewswire/ -- According to PwC's Health Research Institute (HRI), 2018 will be distinguished by persistent uncertainty and risk for the US health industry. 2018 is likely to mirror 2017 - a year marked by raucous debates over health and tax reform and a series of crises triggered by natural disasters - in terms of volatility. To adapt to these challenges, health organizations should consider seeking greater cross-sector collaboration, fresh strategic investments and new efficiencies to build enterprise resilience.

In its annual report, "Top health industry issues of 2018," released today, PwC's HRI lists the 12 trends most likely to shape the industry next year. HRI developed its list of a dozen top issues through analyses of surveys of US consumers, provider, insurer and pharmaceutical executives, in-depth interviews with industry leaders and examination of data and policy trends. HRI's report identifies three strategies traditional health organizations and new entrants should consider in these uncertain times:

    --  Cross-sector collaboration: The biggest challenges in healthcare cannot
        be solved by working in siloes. In order to tackle complex challenges,
        industry stakeholders must break down barriers and work together with an
        eye on what's best for the ultimate end user: patients. Key challenges
        in 2018 include stemming the tide of opioid abuse and overdoses, the
        need for greater attention to the social determinants of health, state
        efforts to address rising healthcare costs through pricing and
        transparency initiatives and natural disasters that can wreak havoc on
        entire healthcare systems.


    --  Strategic investments: Stakeholders must be proactive and think
        strategically about how the market is changing and where to invest now
        ahead of potential disruptions. Key areas of investment in 2018 include
        increasing uptake of Medicare Advantage, continued scenario planning in
        preparation for healthcare reform, bolstering protection against
        cybersecurity attacks and improving patient experience in order to
        change behavior and improve health outcomes.
    --  Creating efficiency: In 2018, the healthcare industry will step up its
        pursuit of efficiency to improve performance and offset risks.
        Efficiency can be achieved through several key areas: harnessing
        artificial intelligence to streamline decision making and administrative
        tasks, pressing middlemen such as pharmacy benefit managers (PBMs) and
        wholesalers to prove their value, expanding use of real-world evidence
        to cut clinical development costs while bringing new drugs to market
        faster and rethinking business models and supply chains in light of new
        tax reform efforts.

"In year two of the Trump administration, stakeholders cannot hold back and take a 'wait and see' approach," said Kelly Barnes, PwC US Health Industries and Global Health Industries Consulting Leader. "They need to lean into the changes and proactively consider key areas for investment, forge partnerships and pursue efficiencies that enable the delivery of better healthcare to all. Companies that look beyond the daily news cycle churn and social media feeds to focus on their customers while remaining nimble in the face of change are most likely to succeed in 2018."

Additional details on the top 12 business issues that HRI identified include:

Issue #1: The healthcare industry tackles the opioid crisis

    --  Opioid overdoses are now the leading cause of death for US adults
        younger than 50. This is a phenomenon too big to solve by only one
        player - there is a role for everyone across the healthcare landscape,
        from prescribers, to payers, to the pharmaceutical industry, in order to
        reverse this trend.

Issue #2: Social determinants come to the forefront

    --  The US spends more on healthcare per capita per year than any other
        nation, but lags in outcomes. To improve health while saving money, the
        industry needs to expand the borders of healthcare. This means thinking
        beyond the four walls of the hospital and looking holistically at the
        full profile of a patient, beyond their specific health issue.

Issue #3: Price transparency moves to the statehouse

    --  With no clear legislative path for federal action on health reform,
        states are starting to take matters into their own hands. Over 30 states
        are now considering legislation that would directly control drug prices
        and shine a light on cost changes. It is important to watch what happens
        at the state level, as past state healthcare reform efforts have been
        brought to the national stage.

Issue #4: Natural disasters create devastation that lasts long after the event passes

    --  Natural disasters such as hurricanes and wildfires can wreak havoc on
        health systems, manufacturing supply chains, and financial operations
        both in the short and long-term. Health systems and pharmaceutical
        companies who conduct proactive scenario planning can increase the pace
        of recovery and avoid making premature decisions that could do harm in
        the long-term.

Issue #5: Medicare Advantage swells in 2018

    --  Medicare Advantage is projected to cover nearly 21 million people in
        2018, a 5% increase over 2017, providing a new competitive opportunity
        for health insurers. However, many eligible consumers don't know these
        plans exist, so insurers must work to raise awareness of options, and
        tailor those options to best meet patient needs.

Issue #6: Health reform isn't over, it's just more complicated

    --  While the chance to repeal and replace the Affordable Care Act (ACA)
        through a single piece of legislation may be dead, the Republican party
        will likely continue to pursue health reform in 2018 through a more
        fragmented approach. 2018 will likely bring continued efforts to reduce
        and cap federal Medicaid spending, expand access to lower-premium health
        insurance, loosen ACA consumer protections, soften the employer and
        individual mandates and repeal ACA taxes and fees.

Issue #7: Securing the internet of things

    --  Following a year marked by major, industry wide cybersecurity breaches
        and a 525% increase in medical device cybersecurity vulnerabilities
        reported by the government, hospitals must take quick, decisive action
        to maintain data privacy, secure the thousands of connected medical
        devices on their networks and protect patients. Companies should treat
        cybersecurity incidents as a "non-natural" disaster, and invest more in
        planning, defensive measures and personnel.

Issue #8: Patient experience as a priority and not just a patient portal

    --  Today's consumer is used to sophisticated shopping experiences, in which
        retailers harness consumer information to tailor how they interact with
        customers. As the healthcare industry turns toward paying more for value
        instead of volume, health companies will need to take this same approach
        and make strategic investments to improve patient experience.

Issue #9: Meet your new coworker, artificial intelligence

    --  Utilizing artificial intelligence (AI) could help put the human touch
        back into health by reducing bureaucracy and administrative duties that
        can take time away from personalized care. Companies are bringing in AI
        to make administrative tasks a lot quicker, such as screening drug
        candidates, streamlining finance processes, adverse event reporting and
        more.

Issue #10: Healthcare's endangered middlemen

    --  Under increased scrutiny, intermediaries such as PBMs and wholesalers
        must prove value and success in creating efficiencies or risk losing
        their place in the supply chain. To prove their worth and prevent having
        their businesses disrupted by new entrants such as Amazon,
        intermediaries must evolve to be more than just a pass-through serving a
        contracting function, by increasing price transparency and taking
        responsibility for more of the value chain.

Issue #11: Real-world evidence a growing challenge for pharma

    --  Changes at the FDA will prompt pharmaceutical and life sciences
        companies to adjust their approach to collecting and using real-world
        data gathered outside of randomized controlled trials, something that
        could potentially save the system millions of dollars. As the 21(st)
        Century Cures Act takes effect, the FDA will be required to consider
        additional uses of real-world evidence for drugs and medical devices,
        including incorporating this data to support new indications.

Issue #12: Tax reform moves forward

    --  Changes such as a corporate tax rate reduction and a shift to a
        territorial system will require new strategies from health
        organizations, and may demand rethinking of business models and supply
        chains.

For the full report and graphics illustrating each issue, visit: https://www.pwc.com/us/en/health-industries/top-health-industry-issues.html

About PwC's Health Research Institute (HRI)
PwC's Health Research Institute (www.pwc.com/hri) provides new intelligence, perspectives and analysis on trends affecting all health-related industries. The Health Research Institute helps executive decision makers navigate change through primary research and collaborative exchange. Its views are shaped by a network of professionals with executive and day-to-day experience in the health industry. HRI research is independent and not sponsored by businesses, government or other institutions.

About PwC's Health Industries Group
PwC's Health Industries Group (www.pwc.com/us/healthindustries) is a leading advisor to public and private organizations across the health industries, including healthcare providers, pharmaceuticals, health and life sciences, payers, employers, academic institutions and non-health organizations with significant presence in the health market. Follow PwC Health Industries at @PwCHealth.

About PwC US
At PwC US, our purpose is to build trust in society and solve important problems. We're a network of firms in 157 countries with more than 223,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com/US.

© 2017 PwC. All rights reserved. PwC refers to the US member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.

Contact:
Sarah Tropiano
Senior Manager, Public Relations
(703) 307-3823
sarah.b.tropiano@pwc.com

Laura Dally
Senior Associate, Public Relations
(202) 774-8524
laura.dally@pwc.com

View original content:http://www.prnewswire.com/news-releases/a-year-for-building-resilience-as-uncertainty-persists-pwcs-health-research-institutes-top-health-industry-issues-of-2018-300569390.html

SOURCE PwC US