Health care called the new "gold rush"
■ A study says opportunities in the industry abound, especially in collecting and managing information, but warns that success is not guaranteed.
A "gold rush" is under way in the health care industry, with "prospectors" trying to take advantage of opportunities brought by health system reform and the industry's growing share of the overall economy, according to a report released in June by PwC's Health Research Institute.
However, the report warns that, just like the prospectors who came up empty during the California Gold Rush of 1849, mining for gold in health care is no easy task. As for physicians, the report talks about the activity that will be happening around them and does not list them as prospectors.
The PwC report, "The New Gold Rush: Prospectors Are Hoping To Mine Opportunities From the Health Care Industry," notes that the Patient Protection and Affordable Care Act is the biggest opening for new health care businesses since Medicare was enacted in 1965.
Though Medicare's biggest business boom came in the construction of new hospitals to take care of millions of newly insured seniors, the PwC report doesn't see a similar boom with the need to take care of newly insured people of all ages under health system reform.
Instead, the opportunities are coming, thanks to the reform law's focus on technology- and quality-related payments, on collecting and managing information. That includes information collected and managed by patients themselves.
For example, the report said patients were willing to spend a collective $13.5 billion on relatively new services such as health video games, services that rate hospitals and physicians, and health care mobile applications. The report said consumer electronics retailers will increasingly get involved in health to service the information needs of patients.
Opportunities also will come, in part because of health reform's stated goal of cutting costs, on steering patients to the least expensive venue of care that is deemed necessary.
That steering may come from third-party payers -- or from patients themselves. In particular, the PwC report noted the growth of retail clinics. According to PwC, 17% of consumers sought treatment at retail clinics in 2010, compared with 10% in 2000.
The report said growth is coming from health insurers and others pushing to reduce the number of patients going straight to the emergency department by "paying nurse practitioners to deliver primary care services ... so as to increase access and steer members to lower-cost settings." It's also coming from younger patients who are eschewing the physicians' office for "nontraditional settings."
PwC said 42% of patients ages 18 to 24 prefer to receive care somewhere other than a physician's office, compared with 15% of those 55 and older. However, the majority of consumers, of all ages, prefer a retail clinic directly affiliated with a physician practice or hospital.
Opportunities for "prospectors" also are coming because spending on health care will continue to rise, from 16% of U.S. gross domestic product today to nearly 20% in 2019. Already, 76% of the top 50 companies in the Fortune 500 are either health care companies or have health care divisions, according to the PwC report. Jobs in health care rose 65%, to 13.5 million, from 1999 to 2009, compared with job growth of 16% as whole.
However, making money in health care won't be easy, the report said. "The health care industry is not for the faint of heart. It is complex and turbulent, and it operates on basic principles foreign to companies successful in other industries." Companies outside health care that are coming into the field might not be accustomed to an industry that is highly regulated and heavily dependent on third-party payments, the report said.