PwC: Top 10 Critical Issues in the Healthcare Industry for 2016

For healthcare consumers, 2016 promises to be a year of novelty as diverse healthcare organizations and innovative tools and services enter the new healthcare economy. In its newly released annual report, Key Issues in the Healthcare Industry, PwC’s Health Research Institute (HRI) forecasts the ten forces that will have the greatest impact on the healthcare sector in 2016. VCBeat has excerpted the main content of the report, as detailed below.

Key Point 1: The M&A Boom

In 2016, the highly anticipated M&A boom is likely to continue, with the focus remaining on insurance companies., as it will ensure that regulators are convinced that industry consolidation will benefit consumers.

Insurance companies are actively seeking competitive advantages, such as diversified revenue streams from new products, optimized IT infrastructure, and robust data analytics capabilities. The most notable development in the second half of 2015 was the wave of mergers among insurance companies. If these transactions pass relevant regulatory reviews, the three major giants in the insurance industry will dominate the entire insurance market by 2017. Approval of these large-scale merger plans could further stimulate a chain reaction of mergers and acquisitions, thereby impacting the entire industry.

While insurance companies will take center stage in the M&A boom over the next year, merger and acquisition activity across the entire healthcare sector is also on an upward trend. A growing number of independent hospitals and clinics are finding it increasingly difficult to sustain operations on their own. To acquire the existing customer bases of these organizations, large healthcare management companies are acquiring complementary medical institutions.

Aligning with the trend from treating individual patients to population health management, healthcare providers are also focusing on enhancing their brand effect. In the wave of mergers and acquisitions, brand may be the key to attracting consumers. The HRI survey results show that 86% of consumers stated that it is very important whether a medical system's brand has recognition as "the best in a certain field" when choosing a healthcare provider.To access “best-in-class” medical services in a given field, 46% of respondents are willing to travel farther; 33% are willing to wait longer; and 19% are willing to pay more. See Figure 1.Healthcare providers should prudently select development strategies suited to their needs, such as partnering with top-tier medical systems like the Mayo Clinic Care Network. This network has established collaborative agreements with local hospitals across 20 U.S. states, offering an alternative to traditional acquisition models.

The pharmaceutical and life sciences sectors are also experiencing a wave of active dealmaking. Pharmaceutical companies are seeking “beyond-the-pill” products and services that go beyond traditional mergers and acquisitions to strengthen their portfolios and drug pipelines. To improve medication adherence, Teva Pharmaceuticals recently acquired Gecko Health Innovations, a software development company specializing in respiratory disease management. In pursuit of robust pipeline expansion and to bolster their existing portfolios, pharmaceutical companies are willing to pay substantial premiums for promising products and services.

By mid-2015, transaction volumes in the healthcare industry had already surpassed the 2014 record, with announced M&A deals nearing $400 billion in value, fueling high expectations for 2016. Driven by industry consolidation, the number of market participants is dwindling, intensifying the pressure to differentiate. Only companies that cater to consumer demands by providing greater access, superior efficacy, and lower costs will succeed in this competitive landscape.

Key Point 2: Drug Pricing
Drug prices in the United States have reached a boiling point. Insurers, patients, and politicians all agree that they are already too high. Meanwhile, the pharmaceutical industry is focused on balancing the pressure for further price reductions with the need to fund innovation—essentially, how to price drugs “just right.” Under the pressure of robust government policies in 2016, pharmaceutical companies are considering new approaches to gain acceptance of drug prices by collaborating with insurers, patients, and emerging health technology assessment organizations.

Many factors have fueled the debate over rising drug prices. In 2014, spending on specialty drugs increased by nearly 27%, while brand-name drug prices have consistently outpaced inflation since 2006. Even generic drugs, which typically face price pressure, saw their prices rise in 2014, reaching an average increase of nearly 9%. The upward trend in drug prices is expected to continue in 2016, as many new specialty medications with development costs exceeding $100,000 enter the market and expand their market share.

Value is playing an increasingly important role in drug pricing decisions. Leonard Schleifer, CEO of Regeneron Pharmaceuticals, has criticized some industry giants for immediately and substantially raising the prices of drugs after acquiring a company. He argues that payment formulas should be promoted to reward innovators who successfully develop new therapies.

Drug pricing reviews also involve third-party nonprofit value assessment organizations, such as the Institute for Clinical and Economic Review (ICER), the National Comprehensive Cancer Network (NCCN), and the American Society of Clinical Oncology (ASCO). These third-party entities are developing drug pricing formulas based on clinical efficacy, economic impact, comparative effectiveness, and drug toxicity. Similar approaches have been employed by relevant agencies in the United Kingdom, Germany, and other countries for many years, successfully reducing drug prices. U.S. health insurers, facing mounting pressure from escalating drug costs, may leverage this data in price negotiations to help curb or defer cost increases.

Caught in the middle, consumers often find it difficult to purchase medications. According to the 2015 HRI consumer survey report, “Money, Money, Money,” 17% of American adults have asked their doctors for cheaper prescription alternatives. As high-deductible health plans become ubiquitous in the new healthcare economy, consumers’ sense of helplessness regarding drug prices is likely to intensify.On the other hand, more than half (53%) of consumers prefer to purchase medications through installment plans rather than paying in full upfront (17%). See Figure 2.



As prices rise, politicians are increasingly turning their attention to drug pricing. Some 2016 presidential candidates have already released plans targeting drug prices and out-of-pocket costs, while state governments in California, Massachusetts, and New York are considering enacting their own legislation. This legislative focus offers hope that future drug pricing will be based on cost rather than value.

Key Point 3: Mobile Healthcare

Smartphones, connected medical accessories, and apps have yet to be fully leveraged in the healthcare industry. In 2016, bringing healthcare “to the palm of your hand” helped reduce costs, expand access to medical services, and meet consumers’ needs for monitoring, diagnosis, and treatment anytime, anywhere.

Primary care and chronic disease management are at the forefront of “mobile health,” offering consumers medical services such as connected otoscopes, activity trackers, smart scales, medical apps, algorithm-based symptom detectors, and on-demand virtual consultations. Patients with chronic conditions can now return home and transmit their data to physicians via connected pacemakers, ECG monitors, glucose trackers, and other remote monitoring devices.

Advances in technology and the economy have made wireless connectivity ubiquitous, driving the emergence of a new wave of reliable and affordable medical services. Approximately half of Americans own smartphones, with 80% of their usage time spent on 4G LTE networks. This high-speed connectivity enables them to easily conduct video consultations with physicians anytime and anywhere, much like hailing a taxi.

As healthcare services gradually shift toward a fee-for-service model, physicians are leveraging digital therapeutics to improve population health and expand their practices in areas such as mental health. Employers are utilizing connected tools to engage employees in wellness programs and chronic disease management, while health insurers are adopting similar approaches to reduce costs. Pharmaceutical manufacturers are continuously developing mobile applications, with over 700 apps designed for customer engagement launched to date.

Internet health startup Omada Health has developed an online behavior change program called Prevent, which includes a wireless scale delivered to the user's door and an activity tracker. These data streams are sent via the Prevent app to each participant’s personal health coach, who provides advice based on objective information rather than subjective impressions. Omada Health currently serves 30 clients, primarily employers and health insurance plans, with 25,000 participants enrolled. However, this is no simple feat: the company must continuously publish peer-reviewed clinical efficacy results under complex regulatory requirements to secure reimbursement for its services.

Consumers may be adopting internet-based healthcare even faster than medical institutions. After tech writer Jeremy Horwitz’s wife was diagnosed with Brugada syndrome—a primary electrical disorder of the heart caused by ion channel gene abnormalities, which places patients at high risk for sudden cardiac death and carries a poor prognosis—he purchased AliveCor’s mobile ECG device. Compatible with smartphones and FDA-cleared, the device is available online for $74.99.The HRI survey shows that the proportion of consumers adopting medical apps has doubled over the past two years, rising from 16% to 32%. See Figure 3.

Key Point 4: Cybersecurity

From internet apps to insulin pumps, medical devices are increasingly being connected to the internet. By 2020, the economic value of internet-connected medical products was estimated at approximately $285 billion. However, the convenience and accessibility of the internet do not come without a cost—these devices are highly vulnerable to attacks by hackers and criminals.

Due to the increasing prevalence of security vulnerabilities and rising system maintenance costs, cybersecurity for medical devices will become a significant issue in 2016.This necessitates that device manufacturers and healthcare institutions adopt proactive measures to maintain consumer trust in medical devices and prevent any cyberattacks that could potentially disrupt the healthcare industry.

This is not baseless. In 2015, the government issued its first warning, stating that medical devices are vulnerable to hacking. An official responsible for infusion pumps warned that such devices could be remotely manipulated to deliver lethal doses of medication. The consequences of cyberattacks on medical devices would be catastrophic: patients could suffer harm or even death due to device malfunction; unauthorized access to other hospitals and healthcare provider networks could be facilitated; and valuable proprietary research data could be stolen from devices used in clinical trials.

Regulatory agencies have issued risk notifications regarding this matter. The FDA has released warnings and guidance documents on cybersecurity, expressing its expectation—though not imposing a mandatory requirement—that medical device manufacturers and healthcare providers ensure that only “trusted” users have access to the devices. Furthermore, the FDA requires timely remediation and reporting of cybersecurity vulnerabilities.

Although there have been no reported cases of patient harm caused by hacked medical devices to date, recent incidents affecting a range of organizations—from insurance companies to retailers—demonstrate that cyberattacks can expose affected institutions to lawsuits, revenue losses, and reputational damage. In 2014, approximately 85% of large healthcare organizations experienced data breaches, with 18% of them incurring remediation costs as high as $100 million.

“Ultimately, it comes down to network architecture and design,” said Jeff Schilling, Chief Security Officer at Armor, Inc. and a retired colonel. “Medical devices need to have their own separate networks. This way, even if hackers breach the device systems, they cannot cause harm quickly.”

Poor cybersecurity conditions can cause significant losses to healthcare systems and medical device manufacturers. If a hospital or manufacturer has experienced a cyber intrusion, consumers will question the integrity of its products.Among them, 50% of consumers would carefully consider whether to use any connected medical devices; 51% would carefully consider whether to use devices from the manufacturer that experienced the issue; and 38% would carefully consider whether to use hospitals whose devices were compromised by hackers. See Figure 4.62% of consumers stated that they prioritize device security over ease of use. Devices lacking embedded security features, particularly consumer-facing apps or wearable devices, may be at a competitive disadvantage.

Key Point 5: Medical Consumerism

High-deductible health plans are ubiquitous. Patients’ out-of-pocket expenses continue to rise, and the volume of uncompensated inpatient care services is also increasing. Faced with such healthcare billing and payment systems, patients often feel deeply frustrated. In 2016, consumers will begin to take control of how they manage their medical expenditures by adopting new types of health plans similar to 401(k) retirement plans, thereby influencing the entire industry. Consumers, particularly younger ones, have shown strong interest in this trend.According to the 2015 HRI survey, 56% of young adults aged 18 to 34 stated that they would use services designed to help plan for medical expenses; this proportion was 33% among those aged 35 to 54, and only 9% among individuals aged 55 and older. See Figure 5.An increasing number of financial advisors are responding to this consumer demand; for instance, the top five wealth management firms have integrated healthcare into long-term financial planning to help consumers make better asset allocation decisions.

Healthcare insurance payments and settlements will be integrated into a broader consumer experience, akin to spending rewards in other industries, such as free miles, discounts, or points offered by airlines to frequent flyers. In 2015, John Hancock Insurance partnered with Vitality to launch the John Hancock Vitality program. Consumers can earn life insurance premium discounts and accumulate reward points through healthy behaviors. In the same year, Alegeus Technologies announced an agreement with Walgreens, allowing consumers to earn points in the Walgreens Balance Rewards program by participating in healthcare financial activities, such as enrolling in and contributing to health savings accounts or using their cards to purchase eligible items. Walgreens aims to better understand how to engage with consumers by incorporating various spending activities into a single rewards program and creating a comprehensive ecosystem.

Employers are also providing tools and incentives to facilitate smarter healthcare shopping. The California Public Employees’ Retirement System (CalPERS) has saved millions of dollars by offering reference prices for various elective medical procedures, such as colonoscopies and hip replacements; it also provides full coverage for cost-effective providers and partial coverage for those that are more expensive. CalPERS offers employees fully transparent pricing to help consumers plan their healthcare expenditures.

Companies like Castlight Health are dedicated to helping employers select more cost-effective doctors and hospitals, while assisting employees in making informed decisions to earn rewards points. Other companies focus on building transparent healthcare marketplaces; for instance, SpendWell Health enables consumers to access routine medical services at more competitive prices. By providing consumers with total out-of-pocket cost estimates, provider ratings, and online payment portals before they schedule outpatient appointments, these platforms empower individuals to better manage their healthcare expenditures.

Healthcare providers are often overwhelmed by the challenges of managing service endpoints and controlling costs. In this context, a new class of consumer-centric tools and services has emerged. Some of these offer user-friendly credit solutions, providing financing tailored to patients’ needs. Novant Health, headquartered in North Carolina, has significantly reduced patient default rates by combining online cost estimates with interest-free loans and flexible repayment terms. Financing options, initially prevalent for elective procedures such as cosmetic surgery and laser eye surgery, are increasingly expanding to cover essential medical services.

Key Point 6: Mental Health

One in five American adults suffers from mental illness each year, with annual corporate expenditures exceeding $440 billion. Nevertheless, mental health has long been neglected. Fortunately, starting in 2016, this trend is set to reverse as healthcare stakeholders—including employers and insurance companies—come to recognize the critical importance of mental well-being to the physical health and productivity of their employees and customers.

An increasing number of employers are prioritizing mental health. In October 2015, the CEO Summit on Mental Health was held at the New York Stock Exchange, where lively discussions took place on how to enhance awareness, acceptance, prevention, and recovery strategies regarding mental health in the workplace. Companies such as Prudential Financial are also committed to addressing employees’ psychological issues, with company leaders engaging in conversations with staff about topics traditionally considered taboo. “We are striving to build a more open corporate culture where you can speak openly about suffering from depression without shame, just as people now casually mention diabetes,” said Ken Dolan-Del Vecchio, a vice president in Prudential’s Medical and Health division. “Nothing needs to be kept hidden. Because as long as you are willing to speak up, there are solutions available.”

In addition to fostering a supportive psychological culture, employers and insurers have reported that access to mental health services remains insufficient, with more than half of rural counties in the United States lacking licensed mental health professionals. Meanwhile, an increasing number of individuals requiring mental health care have gained insurance coverage through the Affordable Care Act (ACA), exacerbating already strained resource demands. Furthermore, the enforcement of federal and state mental health parity laws has ensured that mental disorders are no longer excluded from insurance coverage, which will inevitably increase demand for mental health services. Healthcare executives have expressed hope that more relevant laws will be enforced in the future. In the first nine months of 2015, the New York State Attorney General ruled on two cases involving insurers’ violations of parity laws.

As the demand for psychological services grows, existing healthcare systems are stretched to their limits, creating an urgent need for cost-effective strategies to deliver related medical services. Currently, multiple healthcare systems are working to integrate mental health care into primary care. By leveraging internet-based tools such as video conferencing, primary care physicians can connect with mental health specialists, empowering primary care teams to better manage day-to-day mental health needs and access psychiatric support whenever necessary.

Mental health providers are also leveraging high-tech solutions to conduct virtual consultations directly with patients. In 2014, the U.S. Department of Veterans Affairs used videoconferencing to deliver 325,000 telehealth mental health visits to more than 100,000 veterans at local community clinics. Thanks to these services, psychiatric hospitalization rates decreased by 24%. The department is now extending the same technology to veterans’ homes, enabling them to access screening and educational services directly via computers, tablets, and internet-based apps.

Internet healthcare startups are naturally not lagging behind. Companies such as Lyra Health and Doctor on Demand are driving transformation in the consumer sector, enabling users to connect with clinical psychologists through simple operations on their smartphones. Meanwhile, technologies that diagnose mental disorders using biometric markers, such as “Ellie,” the virtual examiner developed by the University of Southern California, are gradually becoming a reality. Such digital health products may be better suited to young people who are curious about new innovations.According to the HRI survey results, 72% of Americans aged 18–44 are willing to try tele-mental health services, compared with only 43% among those aged 45 and older (see Figure 6).

Key Point 7: Community Nursing

Reducing healthcare costs is a well-worn topic. However, as healthcare payment gradually shifts toward value-based models, the healthcare system in 2016 will pursue a lower-cost healthcare environment more proactively and creatively. Below are four approaches to cost reduction. See Figure 7.

1. Community Hospitals.Lahey Health, the teaching hospital of Tufts University School of Medicine in Massachusetts, is transferring patients with less severe conditions from its hospital emergency departments to community hospitals within its medical network. Dr. Richard Nesto, Chief Medical Officer of Lahey Health, remarked, “You can only do this when you have excellent community hospital partners.” This approach represents a win-win situation within the system. The hospital serves as the “mothership,” providing beds for critically ill patients and improving its financial bottom line; once patients are out of danger, they are transferred to community hospitals closer to their homes. Other healthcare systems are following Lahey Health’s lead: over the past two years, five of the 15 major academic medical centers nationwide have incorporated community hospitals into their networks.
Capital Investment: Acquisition Costs.

2. “Bedless” Hospitals.Some healthcare systems are reducing inpatient care costs through “bedless” hospitals. These facilities are equipped with emergency rooms, observation units, operating rooms, and specialized outpatient clinics—such as those for cardiology, neurology, and oncology—but do not have inpatient wards. This model not only avoids the high fixed costs associated with inpatient hospitalization but also reduces patients’ time spent seeking care, thereby improving their overall experience. With such new types of medical facilities, many patients no longer need to go through considerable trouble to visit the main campuses of medical centers. Bedless hospitals remain a novel concept; Montefiore Medical Center opened the first such facility in 2014, and three other healthcare systems were expected to launch similar facilities in 2016 and beyond.
Capital Investment: Construction Costs.

3. Virtual Medical Center.Some healthcare systems have reduced medical costs by establishing virtual hospitals. The Mercy Virtual Care Center in Missouri is the world’s first facility dedicated exclusively to providing virtual care services. This digital health center leverages audio and video technologies to monitor and treat patients anytime, anywhere. The virtualization of healthcare services not only enables healthcare systems to lower costs but also helps them expand their operations globally.
Capital Investment: Acquisition Costs.

4. Collaborate with retail clinics.Retail clinics are beginning to offer local residents lower-priced medical services beyond primary care, such as chronic disease management.
Capital Investment: Collaboration Fees.

Key Point 8: High-Tech Databases Facilitate Medical Development

There was a time when high hopes were pinned on investments in big data for healthcare, but the challenge of transforming large and diverse datasets into actionable insights became a major obstacle to realizing these aspirations. In 2016, the healthcare industry began processing this data through new high-tech approaches—specifically, so-called “non-relational” databases—to fully leverage the vast volumes of consumer and medical data.

Traditional relational databases, such as Electronic Health Record (EHR) systems, organize data into columns, rows, and tables, forcing information into predefined categories. While these databases are ideal for data that can be easily structured, they cannot handle unstructured data such as physician notes, checklists, and other similar content. According to relevant survey findings, only 17% of healthcare providers have integrated population health analytics into their EHR systems.

Montefiore Medical Center and the National Children’s Medical System, among others, have begun adopting this new type of database. Consider two female patients, both 57 years old with the same chronic condition—asthma. In a relational database, these two women appear nearly identical: female, 57 years old, asthma. However, upon deeper investigation, we find that one is a triathlete who uses her rescue inhaler before training, while the other uses it during pollen season. This information originates from physicians’ handwritten notes, but in relational databases, it is converted into PDF format, rendering it ineffective for search and retrieval. New database tools can help physicians distinguish between these two female patients, provide pharmaceutical manufacturers with insights into how patients use their inhalers, offer pharmacies data on the unique purchasing patterns of such patients, and alert treating physicians to the most appropriate symptomatic treatment plans.

To promote such databases, efforts by the healthcare system alone are insufficient; consumers must be willing to share their personal information to drive the adoption of these new features. The 2015 HRI survey found that while most consumers were willing to share their medical data with physicians (88%) or local healthcare systems (78%), significantly fewer were willing to share it with pharmaceutical companies (53%). Another survey indicated thatIndividuals are more willing to share their personal medical information for their own diagnosis and treatment (83%), whereas the proportion of those willing to share such information for the diagnostic and therapeutic needs of others is lower (73%). See Figure 8.

Key Point 9: Biosimilars

In 2015, Sandoz, the generics unit of Swiss pharmaceutical giant Novartis, received FDA approval to launch Zarxio in the U.S. market. Zarxio is a biosimilar of Amgen’s blockbuster drug Neupogen and represents the first true biosimilar ever approved in the United States. The launch of Zarxio marked the official dawn of the biosimilar era in the U.S., with its price set at 15% lower than that of the originator product, Neupogen. Similar to Novartis, many pharmaceutical companies are pursuing a dual strategy: safeguarding sales of their branded biologics while simultaneously developing their own biosimilars. Among the top ten global pharmaceutical companies, half are engaged in biosimilar development. In 2016, at least four biosimilars were submitted for FDA review, while another 50 were under FDA evaluation.

Biosimilars share the same active ingredients as their reference products and exhibit no significant differences in dosage, dosage form, route of administration, safety, efficacy, or indications. Biosimilars are marketed at discounted prices once the patent protection for the reference product expires, delivering substantial economic and social benefits such as reduced healthcare expenditures, improved drug accessibility, and enhanced quality of medical services. Compared with small-molecule generics, biosimilars involve more complex manufacturing processes and require a greater number of patented technologies; consequently, their production and FDA review processes are more costly and complex than those for traditional generic drugs.

The price discounts offered by biosimilars may help alleviate the issue of persistently high drug prices and assist consumers in coping with health insurance plans featuring burdensome high deductibles. Physicians and insurers anticipate that biosimilars will introduce greater choice and competition to counteract rising medication costs, while new market entrants are leveraging biosimilars as a strategic foothold to break into the biopharmaceutical market.

For biosimilars, obtaining FDA approval is often followed by legal disputes between brand-name drug patent holders and biosimilar manufacturers. Prior to the passage of the Biologics Price Competition and Innovation (BPCI) Act as part of the Affordable Care Act (ACA), there was no established regulatory pathway for biosimilars. The enactment of the BPCI Act has unlocked development potential for more technologically advanced, lower-cost products; however, realizing this potential largely depends on FDA rulemaking and pharmacies’ ability to substitute biosimilars for brand-name drugs in dispensing. Industry insiders note that the FDA is adopting a “more engaged approach” to promote biosimilar development, providing constructive guidance during meetings with pharmaceutical manufacturers.

Currently, most consumers are still unclear about what biosimilars are.According to the 2015 HRI report, more than 83% of consumers failed to correctly identify the definition of biosimilars; among them, 67% responded that they did not know, and another 16% selected incorrect options. Only 17% of consumers provided the correct answer. See Figure 9.Over the past three decades, generic drugs have helped consumers overcome unfamiliarity and apprehension through their lower prices. With an increasing number of patients posting medication feedback online, it is believed that this trend will facilitate faster consumer acceptance of biosimilars.

Key Point 10: Healthcare Service Costs

Many healthcare systems boast valuations in the billions of dollars, yet few can determine the cost of their services with the same precision as other billion-dollar enterprises. Now, insurers, consumers, and other purchasers of healthcare services are demanding “value-based care,” compelling healthcare providers to scramble to calculate their service costs. In 2016, the demand for transparency in healthcare costs will intensify further.

Dr. Vivian Lee, CEO of the University of Utah Health Care, has been working toward this goal for many years. Four years ago, in order to develop payment “bundles” for several medical procedures, she recognized that healthcare systems need to understand the true costs of clinical diagnoses. Like other healthcare systems, Dr. Lee’s medical center already had a system capable of roughly estimating overall expenses. However, in practice, the required data often pertained not to “volume,” but to “value.” Consequently, Dr. Lee convened a team comprising experts in clinical care and informatics from 15 to 20 hospitals to develop a cost-auditing program. After six months, a working model of the program was launched. In the following years, the software evolved to enable cost accounting for even the most granular medical procedures, such as calculating the cost per minute for patient admission to the emergency department ($0.82 per minute) or the intensive care unit (ICU) ($1.43 per minute).

These data not only help hospitals understand medical costs but also drive improvements in patient care. In one study, the chief cardiologist of a healthcare system proposed nine best practices for coronary artery bypass grafting (CABG) care, including granting greater autonomy to nursing staff. The hospital where Lee works has been able to reduce the cost of total joint replacement surgeries by approximately 30% annually, enabling it to lower its overall medical expenditures by 0.5% per year, even as healthcare prices at other local academic medical centers continue to rise.

Utah is not the only beneficiary of value-based care. Pennsylvania’s Geisinger Health System has also successfully reduced unnecessary medical procedures and patient hospital stays. Geisinger operates its own insurance division and has been committed to providing innovative healthcare services, such as integrating pharmacists into the treatment of patients with chronic conditions. In California, Sharp HealthCare continues to strive for high-value healthcare delivery. It has abandoned the traditional fee-for-service model in favor of capitation and shared savings models to achieve value-based care.

According to an HRI survey, 66% of patients currently do not inquire about the cost of consultations with healthcare providers, 57% do not ask about prescription prices, and 60% do not inquire about the costs of medical procedures. See Figure 10.As consumers increasingly shift their healthcare needs—particularly for primary care services and laboratory testing—to more affordable, transparent, and convenient providers, a growing number will demand accurate pricing from healthcare institutions. This demand will become a key metric for differentiating among healthcare systems in the future.

Compiled by Chen Xin
Editor: Mo Renying