PricewaterhouseCoopers Health Research Institute Offers First Look at
Healthcare in the Second Bush Administration
Experts See Increased Use of Competition, Consumer Accountability in
Healthcare
WASHINGTON, Nov. 9 /PRNewswire/ -- PricewaterhouseCoopers Health
Research Institute today presented an analysis of President Bush's
second term healthcare agenda and implications of the major policies
and proposals aimed at the nation's troubled healthcare system.
The briefing, held this morning in Washington, was the first public
policy briefing for the newly formed Institute, and addressed the
federal budget deficit's likely impact on healthcare providers, the
trend toward consumer-directed initiatives including Health Savings
Accounts and the implications of drug reimportation.
The Institute also released "Bush's Second Term: Prescribing Private
Solutions for the Nation's Healthcare Problems," a report by a
PricewaterhouseCoopers Health Research Institute team on the
implications of President Bush's second term. The report is available
at http://pwc.com/researchinstitute/healthpolicy
"Faced with budget deficits, rising health spending and aging Baby
Boomers, President Bush is advocating for remedies such as
competition and consumer accountability to heal the nation's ailing
healthcare system," said Kelly Barnes, PricewaterhouseCoopers' U.S.
Healthcare Industry marketing and thought leader, who is leading the
initiative. "As we evaluate the impact the president's re-election
will have on healthcare, we're pleased to provide thought leadership
for a dynamic industry that affects millions of Americans."
Launched in October 2004, the PricewaterhouseCoopers Health Research
Institute provides intelligence, perspective and analysis on trends
affecting health-related industries. Among the Institute experts who
spoke at today's briefing were Sandy Lutz, the Institute's director;
Ron Bachman, principal in PricewaterhouseCoopers' Human Resource
Services group; and Jack Rodgers,
PricewaterhouseCoopers' managing director of Health Policy Economics.
The speakers agreed that President Bush's healthcare initiatives will
differ dramatically from those that would have been pursued by
Senator John Kerry, who likely would have emphasized expanded access
to healthcare insurance. Instead, Bush administration policymakers
increasingly will rely on market-oriented strategies that will
require consumers to take greater responsibility for paying for
healthcare while enabling them to more readily save for that care.
"Consumer-driven healthcare could transform the structure of the
health insurance industry by shifting health insurance from employers
to individuals and providing lower cost options and coverage for many
of the 44 million Americans without health insurance," said Bachman,
a nationally-recognized expert on consumer-directed healthcare.
President Bush campaigned on his concept of an "Ownership Society,"
including Health Savings Accounts and more private coverage for
Medicare beneficiaries. If these plans are successful and work as
planned, they would alter the employer-sponsored model of coverage.
Other key observations:
-- President Bush's combination of tax credits and rebates will
accelerate the insurance industry's shift to high-deductible health
plans and Health Savings Accounts. Consumers who pay more out-of-
pocket or out of savings accounts will result in hospitals and
physicians complying with increased requests for more information on
quality and price. Use of smaller-ticket services, such as physician
office visits, will drop. Finally, bad debt is likely to increase for
hospitals that must focus more on collecting from patients.
-- President Bush's proposals encourage a market in which
individuals purchase their own insurance. His plan to allow insurance
companies to cross state lines would aid that. For the industry, it
could lead to a major reshuffling of market share among the current
competitors.
-- Plans to privatize Medicare through the use of private health
and drug plans will progress as passed in the Medicare Modernization
Act, but the market may stall if the government payment increases are
not enough.
-- Planned increases in Medicare reimbursement to providers may
be cut. The last time the nation faced a large budget deficit,
Congress passed the Balanced Budget Act of 1997. In today's dollars,
a similar level of reductions in the Medicare program would amount to
a cut of about $450 billion over the next 10 years - roughly the same
as the increase in spending under the Medicare Modernization Act.
-- President Bush may have to reach a compromise in 2005 on drug
reimportation, balancing safety and cost concerns. Reimportation
could shift priorities in pharmaceutical research and development.
However, If the reimportation issue drags out until 2006, the demand
for reimportation may wither as the Medicare prescription drug
benefit comes on line.
-- President Bush will continue to push tort reform, but passage
of national legislation is unlikely.
-- Adoption of health information technology will be promoted by
the Bush administration, but the current level of proposed funding is
vastly inadequate to achieve his stated goals.
-- President Bush is not likely to authorize additional federal
funding for stem cell research, which is aggressively being pursued
in the states and abroad to help develop cures for Alzheimer's,
Parkinson's and other illnesses. Although the president does not
support funding for embryonic stem cell research, he has backed
continuing research for adult stem cells and has supported federal
assistance in the past.
"Today's briefing represents the first of many important health
industry projects that will be spearheaded by the Health Research
Institute in the future," said Jim Henry, PricewaterhouseCoopers'
Health Industries leader. "The formation of the Institute illustrates
our commitment to helping our clients and the marketplace as a whole
understand and respond to the major trends and forces that are
rapidly reshaping the industry."
About PricewaterhouseCoopers LLP
PricewaterhouseCoopers (http://www.pwc.com) provides industry-focused
assurance, tax and advisory services for public and private clients.
More than 120,000 people in 139 countries connect their thinking,
experience and solutions to build public trust and enhance value for
clients and their stakeholders.
Unless otherwise indicated, "PricewaterhouseCoopers" refers to
PricewaterhouseCoopers LLP, a Delaware limited liability partnership.
PricewaterhouseCoopers LLP is a member firm of PricewaterhouseCoopers
International Limited.
Aout PricewaterhouseCoopers Health Research Institute
Formed in October 2004, PricewaterhouseCoopers Health Research
Institute provides new intelligence, perspective and analysis on
trends affecting all health-related industries, including healthcare
providers, pharmaceuticals, health and life sciences and payers. The
Institute helps executive decision-makers and stakeholders navigate
change through a process of fact-based research and collaborative
exchange that draws on a network of more than 4,000 professionals
with day-to-day experience in the health industries.
The Institute is part of PricewaterhouseCoopers larger initiative for
the health-related industries that brings together expertise and
allows collaboration across all sectors in the health continuum.
SOURCE PricewaterhouseCoopers Health Research Institute
Web Site: http://www.pwc.com/healthcare
http://pwc.com/researchinstitute/healthpolicy http://www.pwc.com
SOURCE PR Newswire (press release)
http://tinyurl.com/6mhjq
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