Healthcare costs per capita have reached the tipping point, and the current model is simply unsustainable. If the United States continues down its current path, in 2032 the nation will spend 23 percent of its total GDP on health care, almost twice the level of other industrialized countries. To dial back expenditures to 15 percent of GDP within 20 years, the nation needs to limit growth in healthcare expenditures to less than 1 percent annually and by 0.3 percent or lower when adjusted for population each year. This is assuming that the economy will return to its 3 percent annual growth rate.
This is a tall order, and the success of healthcare reform depends on engaging the entire healthcare value chain —employers, patients, payors, suppliers, and providers. We have developed a 5x5 formula and laid it out for you in this outlook for 2013. All five constituencies will need to incorporate the following five dynamics into their business model: changing behaviors, delivery models, reimburse¬ment, measurement of success, and the morphing roles within and among each stakeholder.
We’ve also discussed success factors for each group in the value chain. Providers, for example, will define success by their ability to keep their cost per capita below the rate of general inflation. To accomplish this goal, real cuts in the cost of care delivery will need to be reengineered into the care processes.
We invite you to download our 2013 Healthcare Industry Outlook and utilize the information there to help prepare your organization for the transformation now under way.