2008 predictions for trends in health care

By JULIUS A. KARASH
http://www.kansascity.com

As costs and the numbers of uninsured keep trending upward, health care has emerged as the most important domestic issue of 2008.

Here are PricewaterhouseCoopers Health Research Institutes predictions for the top eight health industry issues of the coming year:

Hospital coffers will feel the impact of a new Medicare reimbursement system that’s designed to better recognize the severity of patient illnesses. Specialty hospitals and others that see less acutely ill patients could see their revenues decline, while urban hospitals that treat sicker patients could benefit.

Increased oversight and authority by the U.S. Food and Drug Administration may boost the publics trust in drug safety, but also could add to the regulatory burdens on pharmaceutical companies. The FDA now may require drug companies to conduct additional clinical trials to assess risks associated with a drug after it has been released to the public.

A surge in the number of retail health clinics, such as those in drug stores, will force states, payers and policymakers to think about the best ways to deliver primary care. Hospitals could benefit from retail clinics if they draw uninsured patients, while pharmaceutical companies may need to market more to the nurse practitioners who run the clinics.

The market for individual health insurance could get much broader if other states and the federal government follow the lead of Massachusetts, which requires that all residents have coverage. Individual coverage also could get a boost from Republican proposals for tax incentives to help consumers buy individual policies.

Retirees are playing a greater role in funding their health-care coverage, whether they like it or not. As the population ages and health-care costs increase, employers are shifting more responsibility for retiree coverage to the retirees. In a PricewatehouseCoopers survey of multinational company executives, 73 percent said they needed to reduce contributions to retiree health coverage and cap benefits.

Big pharmaceutical companies, groaning under the high price of drug development, will keep buying and collaborating with life-science companies to stock their product pipelines. But biogenerics generic copies of biological drugs could crimp drug company revenues.

New IRS rules will mandate that nonprofit hospitals uniformly disclose more details about the community benefits they provide, such as charity care. Hospitals also will have to be more forthcoming about executive salaries and benefits, because of pressure to justify their tax-exempt status.

Asia is poised to become the worlds largest pharmaceutical consumer and producer. American drug companies have increased their marketing and clinical trials in Asia because of the markets size, increasing wealth and growing awareness of health-related issues. On the production side, much of Asia provides high-quality, inexpensive labor. But watch out: Several Asian drug companies aim to become worldwide pharmaceutical powerhouses, not just contract manufacturers.

(Note: This article has been removed from the Kansas City Star, but we have left it up for archiving purposes)

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