Preventive care is oversold. Accountable care has yet to be defined. And despite the slowdown in healthcare spending, it's still likely to grow faster than the overall gross domestic product in the United States, and emerging economies such as China and Russia.
Those were some of the pearls of wisdom from famed healthcare economist and Princeton University Professor Uwe Reinhardt who spoke March 12 at the PMRG meeting, the trade group for healthcare marketing research professionals, in Washington D.C.
Reinhardt said there are forces that point to healthcare continuing to outpace general growth: the significant aging of the world's population and continuing appetites for new products, which are being developed at a rapid clip. However, negatives include the worldwide income gaps between the haves and have-nots, along with significant pressure on prices.
The U.S. spent about $2.9 trillion on healthcare in 2012 and will spend $5.5 trillion by 2023, Reinhardt said. Over the years, the healthcare sector has typically outpaced gross domestic product growth by about 2.5 percentage points, but since 2002, growth has been much slower. In emerging markets described as BRIC (Brazil, Russia, India and China), growth should be at least 1 percent plus GDP, while in Europe, it's more in line with GDP.
Both Reinhardt and Hank Kucheman, senior advisor for huge medical device company Boston Scientific, described global healthcare economics and answered several questions from the PMRG audience on trends. (Reinhardt revealed in full disclosure that he serves on the board of Boston Scientific.)
- On whether the $2.9 trillion of spending in the U.S. is producing the best outcomes? Reinhardt said we too often focus on the healthcare system producing good health, when, in fact, it's much more about lifestyle (30 percent obesity in the U.S. versus 16% in Italy), violence, pollution and other issues not specific to the delivery of care.
- On whether ACOs will work? Reinhardt said he still is unsure of what one is, saying he thinks an ACO is something like Kaiser Permanente, but that sounds ?too German and too socialist.? He said ACOs have the potential to create monopolies and these new models mean marketers must sell to a committee, and not necessarily a single physician. ?You have to learn the language of benefit cost analysis,? he said. Kucheman, too, said it would be years before we know if ACOs succeed but that he hopes the system will move toward rewarding quality over volume. He cited advancements in the quality of Boston Scientific devices competing in a system that doesn?t reward that.
- On the value of preventive care? Reinhardt said it's oversold, except for perhaps maternal health and blood pressure control. ?A lot of preventive care is wasted money,? he said.
The days of significant healthcare sector growth may be over ? Reinhardt says the system simply can?t support that kind of growth ? and the U.S. will need to answer a fundamental question that is central to the sequestration issue: just how much are citizens willing to be taxed to help pay for healthcare for the poor?
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