3 Foundational Shifts in Healthcare
The Trump administration has signaled three major foundational shifts in its approach to healthcare. While there are many factors at play in the current environment, these shifts are the guiding principles behind major industry developments—from regulation, to deals and innovation.
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Mandates to choice: Movement from an insurer marketplace governed by mandates to a system centered on choice
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Regulation to competition: Movement from a marketplace characterized by regulation to a marketplace guided by competition when it comes to coverage and pricing
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Subsidies to actuarial soundness: Movement from payments provided via subsidies to greater actuarial soundness
The impacts to various stakeholders in the healthcare ecosystem, however, are nuanced. In the wake of news like Amazon, Berkshire Hathaway and JP Morgan’s announcement that they’re creating an independent healthcare company, what do these foundational shifts mean for the healthcare’s stakeholders?
BDO Insights: Finding Your Footing
With any change in structure, stakeholders must adapt their strategy. We recommend the following steps to understand how these shifts impact your organization and end consumer:
- Decode the onslaught of political rhetoric, legislation, industry consolidation, and regulatory change in healthcare;
- Interpret the impact for you, your customers, and your stakeholders;
- Evaluate your current business model and activities; and
- Determine the changes you need to make to stay on key.
Start with the matrix above as a diagnostic tool for steps one and two. Then consider whether your current business model is contingent upon any of the old models. While these changes are in various stages of maturity, the industry is undoubtedly barreling away from mandates, extensive regulation, and subsidies. It’s important to settle on an honest assessment of where your business currently lies.
Each stakeholder will have different levels of exposure to each change. For example, payers will likely be most impacted by the policy shift from mandates to choice, but they must be careful not to miss the subtleties of the other two components. For a digital health player, the impacts may be entirely different. Public healthcare entities have the added complexities of examining shareholder outcomes and assessing the movement of their stock price.
Bringing in the outside perspective of a third-party advisor can be helpful to assess the full scope of your needs and risks. Then, healthcare entities must communicate their evolved approach to various stakeholders, including the boards and leaders who will help shape strategy moving forward, the employees who will need to align with and carry out the new vision, investors whose outcomes will be impacted, and end consumers who may see change in their hospital room or bottom line.
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