US Healthcare Reform and Impact On Pharma and Healthcare IT Companies


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US Healthcare Reform and Its Impact on Pharma and Healthcare Companies:
Implications Current and Future

Presented at the Edison Ventures Pharma and Healthcare Business Solutions Executive Meeting Lawrenceville, NJ
April 20, 2010

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US Healthcare Reform and Impact On Pharma and Healthcare IT Companies

  1. 1. US Healthcare Reform and Its Impact on Pharma and Healthcare Companies Implications: Current and Future Pharma and Healthcare Business Solutions Executive Meeting Lawrenceville, NJ April 20, 2010
  2. 2. A Poll About The Future of Health Reform – What Do You Think?  Wealth of Opportunity OR  Money Down the Drain
  3. 3. Facts and Figures - Did You Know…  1 out of 10 of iPad purchases were made by health providers  70% of Physicians will be using Internet-enabled Smart Phones by 2011
  4. 4. Facts and Figures - Did You Know (cont.)…  The United States entered 2010 with a population of more than 308.4 million  16.2% of Americans are currently uninsured
  5. 5. Facts and Figures - Did You Know (cont.)…  Health care expenditures in the United States surpass $2.2 trillion per year  The cost of healthcare reform is projected at $940 billion over 10 years…$94 billion/year …WHILE 2010 Census is projected to cost as much as $14 billion
  6. 6. Facts and Figures - Did You Know (cont.)…  33 cents of every dollar spend on healthcare is spent on non-clinical activities ($726 Billion per year???)  The bulk of spending in the HITECH Act, more than $17 billion, will go towards incentives for hospitals and healthcare professionals to encourage the widespread adoption of EHRs  EHR is estimated to save roughly $80 billion per year by reducing paperwork, medical errors and costs, saving lives and saving dollars
  7. 7. PERSPECTIVE: Key Components of the Reform For the purposes of this discussion, we have confined Health Care Reform to the following: 1. HITECH Act 2. Patient Protection and Affordable Care Act & Health Care 3. Education and Reconciliation Act
  8. 8. Healthcare Reform of 2010 HITECH Act and the EHR Mandate  $50 billion in funding dedicated to this effort  Roughly 1/3 dedicated to EHR implementation  Positive implications  Real-time longitudinal health knowledge - any time, any where  Reduced errors  More intelligent care – with better communication and documentation  Automated workflows  Reduced costs  Some unanswered questions…  DEFINING EHR? EMR? PERSONAL HEALTH RECORD? DATA EXCHANGES?  Certification??? Standards still being developed and refined
  9. 9. Healthcare Reform of 2010 (cont’d)  Patient Protection and Affordable Care Act & Health Care and Education and Reconciliation Act = Healthcare for All  Massive implications  Financial health of the nation  Healthcare stakeholders:  Patients and Caregivers (Consumers)  Employers  Insurers  Government  Physicians and Other Healthcare Professionals  Pharma  Reimbursements, rebates and discounts  Medicare Part D  Sunshine provisions  Comparative effectiveness  Drug and device research and clinical trials  Drug labeling
  10. 10. Thoughts for Discussion  How will Healthcare Reform impact the business of your clients?  How will it affect your Business?  Where are your opportunities?  What are you currently doing in response to the reform to capitalize on it now?  How do you plan on addressing or changing in the long-term?  What are the risks?  What will be your emerging markets?
  11. 11. Our View of How the Reform Will Effect Healthcare  Broader Healthcare Coverage – Healthcare for Everyone or Simply Insurance for Most?  Primary Care and Geriatric Physician shortages exacerbated  Access issues  Changes in physician compensation structures  Changes in care structure  Physicians will increasingly become less independent and act more as leaders of multi-disciplinary teams…the Medical Home  Expanded roles, knowledge and certifications for other healthcare providers?  Budget centricity and rationing (versus patient-centric care)  Focus shift from disease to health management  “Financially-driven” collaboration between Government/Provider/Payor/Industry – What Can We Do Together to Benefit the Patient
  12. 12. Our View of How Reform Will Effect the Pharma Industry  Larger consumption base  Decreased price margins (including generics)  Expectation to fund part of reform  Improved Image??? ?  More visibility  Required transparency  Sunshine Act requires funding transparency  Higher level of competition – based on price AND effectiveness  A greater focus on share of voice with the patient  Health information and health management  Cost and Effectiveness Awareness  Intervention, compliance and engagement strategies  Expanded focus and new relationships with other healthcare constituents, such as payors, government, employers, pharmacies and pharmacy-benefit managers  Innovative market access and pricing strategies
  13. 13. Outlook: Near-Term Opportunities for Pharma/Healthcare Vendors Healthcare Reform Will Deliver Immediate $$$ Opportunities for Solutions Providers Focused On:  Regulatory compliance, including aggregate spend and samples reporting  Stakeholder mapping and insights  Direct to consumer disease awareness and education  Patient compliance  Cloud computing  Data security and management  Privacy  EHR Back-office Support/Paper conversion
  14. 14. Our Crystal Ball: Where Can Pharma/ Healthcare Vendors Make $ Long-Term  Next wave of CRM: Cross-Collaboration Focus  eCommunities of practice for multi-stakeholder cross-collaboration  On-the-go technologies (iPad) and apps that enable direct to consumer, patient and professional education, collaboration, and relationship management  Speech recognition devices  Data analysis, predictive modeling and automated intelligence around clinical research, outcomes and marketing science  Pharmacovigilence  Data management and storage  Web-based health support  Patient health awareness and intervention assistance  “All Digital” Hospitals and Mobile Clinics  Green considerations  Evolution of CROs
  15. 15. In Closing – What Do You Think Now?  Wealth of Opportunity OR  Money Down the Drain