More than 90 New Companies Created Since Affordable Care Act Signed into Law, According to PwC's Health Research Institute
ACA energized five fundamental shifts; industry leaders should prepare for next five years
NEW YORK, March 18, 2015 /PRNewswire/ -- In its first five years, the Affordable Care Act (ACA) has already left an indelible mark on the $2.9 trillion health sector. By energizing five fundamental shifts, the law has accelerated the rise of a New Health Economy predicated on value, according to a new report from PwC's Health Research Institute (HRI), "Five Trends to Watch as the Affordable Care Act Turns Five."
"Although the ACA will continue to face crosswinds, it has already had a profound impact on the healthcare business," said Kelly Barnes, PwC's U.S. health industries leader. "The ACA has catalyzed major changes in an industry historically slow to change. Our report provides a roadmap that outlines what industry leaders should be doing as these shifts continue over the next five years."
"Most striking, the five trends have led to the creation of more than 90 new companies that have entered the sector since 2010," said Ceci Connolly, managing director of PwC's Health Research Institute. "The ACA has opened gates for savvy investors and start-ups to take a piece of the $2.9 trillion industry."
According to the report, although much groundwork was laid in advance of the law's enactment, health industry business models and imperatives will likely never be the same post-ACA. These five key trends fueled by the ACA have ignited sector-wide transformation:
- Risk Shift: Raising the stakes for all healthcare players. The ACA added force to new payment models that reward outcomes and penalize poor performance such as high rates of readmission and hospital-acquired conditions.
- Primary care: Back to basics. Experimentation in new payment models and expansion of insurance coverage are making primary care once again the critical touch point.
- New entrants: Innovators in the New Health Economy. New entrants are rushing into the market to meet the demand for lower-cost, consumer-oriented care options in the post-ACA era. More than 90 new companies have been created since 2010, according to HRI analysis.
- Health insurance: From wholesale to retail. Rapid enrollment in the ACA's public exchanges has demonstrated the potential of retail-style health insurance and spawned renewed interest in private exchanges.
- States: Reform's pivotal stage. States have emerged as key players in the reconfigured healthcare landscape, as the ACA gave states notable discretion in how the law could be implemented.
The report provides an outline as to what industry leaders should consider moving forward, to include:
- Revisiting strategies to emphasize saving over spending and quality over quantity, to serve more consumers effectively and demonstrate affordability.
- Watching closely as the reimbursement pendulum swings from fee-for-service to accountable care.
- Innovating to meet the demands of the new healthcare consumer.
- Pursuing opportunities to enhance consumer choice and engagement in selecting health benefits.
- Working with states as they continue to shape the future landscape.
The full report Five Trends to Watch as the Affordable Care Act Turns Five is available at http://www.pwc.com/us/en/health-industries/health-research-institute/aca-health-reform.jhtml.
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
PwC US helps organizations and individuals create the value they're looking for. We're a member of the PwC network of firms, which has firms in 157 countries with more than 195,000 people. We're committed to delivering quality in assurance, tax and advisory services. Find out more and tell us what matters to you by visiting us at www.pwc.com/US.
© 2015 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. PwC refers to the US member firm, 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.
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SOURCE PwC US
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