Now that the economic stimulus package has been negotiated and signed, healthcare is on deck. Not just for Congressional action, but also for the biggest wave of reform the industry has ever experienced. It *could* be a very good thing – not only for patients, providers and payers, but also for innovators and investors who contribute to the “new healthcare economy” that will emerge.
Everyone knows “change” will have to find its way into the hospitals, clinics, labs, doctor’s offices and insurance providers that make up our current healthcare “system” in America. The rate of healthcare inflation – which is currently twice the core inflation rate – can clearly no longer be supported, and changes are required to address the explosion in America’s aging population over the next two decades. Experts estimate that roughly one third of all medical care delivered in the United States is wasted or in error, suggesting there is ample room for improvement.
In spite of the bleak near-term indicators, we predict that the United States is poised to establish a new healthcare economy. Starting in 2009, we expect to see a ten-year transformational cycle that will re-define many dynamics of the American healthcare system. The new healthcare economy will depend on innovation to simultaneously drive down costs and improve quality of care – core criteria cited by President Obama in his inaugural address. It will also require better alignment of economic incentives across payers, providers and patients.