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New Year Potpourri

By January 1, 2010Commentary

2009 has been an eventful year for health care.  The economy had an impact, but the reform discussions and bills, and all the research designed to influence those bills, were probably the biggest news items.   Everyone in the health system is trying to understand how reform may affect their business, their revenue, their profits.  Whether reform is passed or not, 2010 is likely to be another turbulent year for health care.  A few observations on trends we might see in 2010.

Health care costs are likely to continue to rise at rates significantly above both GDP and general inflation.  If a reform bill passes, it may actually add to cost increases in the next few years as industry participants position themselves for the implementation of most of the coverage changes in 2013 or 2014.  These spending increases will burden already strained government budgets and lead to changes in either benefits or eligibility or other public program revisions, working contrary to the goals of reform.  There is little room to reduce already low provider payments.  These looming provider and supplier price increases will disproportionately affect employers, due to continued cost-shifting.  We can expect to see more premium sharing, and higher deductibles and copayments.

At the same time, the private sector will expand its use of wellness programs, care management and on-site clinics.  These and other methods have begun to demonstrate proven cost savings, while often improving health status and outcomes.  Innovative delivery methods, whether on-site or retail clinics, medical tourism or technology-based care, such as online or virtual physician visits, will spread, so long as regulators do not unduly interfere with their operation.

Product companies, the drug, device and equipment manufacturers, will continue to struggle to find financing, will deal with more regulatory requirements and delays and will be the focus of reimbursement reductions, due to the perception of high margins.  These companies need to find methods to reduce development and sales and marketing expenses to preserve those margins if and as reimbursement is reduced.

Personalized medicine, in the form of diagnostics and designer-drugs, will expand, but the conflict between personalized medicine and the need to control health spending will become more apparent.  Personalized medicine is not cheap and it is not likely cost-saving to the system as a whole, but it clearly delivers better health outcomes for most patients.

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