Top health industry
issues of 2018
A year for resilience
amid uncertainty
In its 12th year, PwC Health Research Institute’s annual report highlights
the forces that will have the most impact on the industry in 2018.
Heart of the matter
Page 2
2018: A year for cross-
sector collaboration
Issue 1
The healthcare industry tackles
the opioid crisis
Page 4
Issue 2
Social determinants come
to the forefront
Page 7
Issue 3
Price transparency moves
to the statehouse
Page 10
Issue 4
Natural disasters create
devastation that lasts long
after the event passes
Page 13
2018: A year for strategic
investments
Issue 5
Medicare Advantage swells
in 2018
Page 16
Issue 6
Health reform isn’t over,
it’s just more complicated
Page 19
Issue 7
Securing the internet of things
Page 23
Issue 8
Patient experience as a priority
and not just a portal
Page 26
2018: A year for creating
effciencies
Issue 9
Meet your new coworker,
artifcial intelligence
Page 29
Issue 10
Healthcare’s endangered
middlemen
Page 32
Issue 11
Real-world evidence a growing
challenge for pharma
Page 35
Issue 12
Tax reform moves forward
Page 38
Endnotes
Page 41
Acknowledgements
Page 48
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PwC Health Research Institute | Top health industry issues of 2018: A year for resilience amid uncertainty | 2
Heart of the matter
In year two of the Trump administration, healthcare leaders will be adjusting their
strategies to focus on investments, collaborations and effciencies that build enterprise
resilience on a baseline of continued uncertainty. Healthcare players, including the
White House, Congress, state lawmakers, industry groups and patient advocates, will
continue to parry, feint and thrust, which will likely result in additional policy changes.
Healthcare providers and insurers in particular should anticipate the changes as they
come. Beyond health reform, additional risks and uncertainties are moving to center
stage, as is the consumer, and the health industry is being forced to act.
Major new security breaches came to light last year, one of which exposed to hackers
the personal information, including Social Security numbers, of more than 140 million
people. In the healthcare industry, new cybersecurity threats, such as ransomware,
are targeting payers and providers and even therapeutics, such as medical devices.
Hacks are like a “non-natural” disaster, and health organizations and companies
should prepare for them with robust defenses and remediation plans—and be able
to respond if their networks, or devices, are breached.
Then there are the actual natural disasters, from which Puerto Rico, Texas, Florida
and California are still reeling. Natural disasters can lead to health system closures,
production outages, drug shortages, chaotic revenue cycle operations, physical
destruction and dislocated populations. Resilient health organizations and businesses
will make strategic investments before a disaster occurs. Steps such as reviewing
insurance policies, protecting critical systems and creating virtual backups to traditional
services will help keep medical services or production going if facilities are damaged.
In 2018 the healthcare industry will step up its pursuit of effciency to improve
performance and offset risks. Working largely behind the scenes, artifcial intelligence
(AI) will help employees make better use of their time and expertise, and streamline
decision-making, fnancial reporting, supply chains and other functions. As a
coworker, AI won’t provide comic relief in the cafeteria, but it also won’t forget, tire,
get bored or come down with a cold.
Pharmacy benefts managers (PBMs) and drug wholesalers, facing cost pressures, likely
will seek new ways to drive effciency and prove their value to customers—or risk being
cut out of the healthcare supply chain. To increase purchasing power, a health plan
and its PBM created a combined specialty pharmacy and mail services company with
Walgreens, a retail pharmacy chain. The arrangement also helps integrate medical and
pharmacy benefts, opening the door to value-based contracts with drugmakers. New
state-level legislation also may lead to effciency measures, such as allowing Medicaid
plans to refuse coverage for certain drugs. Expanded use of real-world evidence may
help pharmaceutical and life sciences companies cut clinical development costs.
These shifts in the industry landscape likely will force pharmaceutical and life sciences
companies to reconsider strategies and business models in 2018.
PwC Health Research Institute | Top health industry issues of 2018: A year for resilience amid uncertainty | 3
New collaborations will improve the way health organizations serve consumers. Cross-
sector approaches to fght the opioid crisis may help stem the tide of abuse and
overdoses in 2018. Identifying the social determinants of health could help predict and
prevent poor health outcomes: PwC’s Health Research Institute (HRI) estimates that
health disparities account for $102 billion in direct medical costs annually.1 In Ohio,
screenings and interventions for food insecurity were associated with a 53 percent
drop in hospital readmissions and a 4 percent increase in primary care visits. In San
Antonio, an insurer’s community partnership program led to a 9 percent decrease in
“unhealthy days,” the program’s measure of physical and mental health.
2018 likely will be distinguished by persistent uncertainty and risk for the industry, but
these challenges also may spur health organizations to seek out greater cross-sector
collaboration, make new strategic investments and create effciencies, all tactics that
shore up enterprise resilience (see Figure 1). In the face of an unsettled environment,
the health industry could come out the other side of 2018 stronger and more creative,
helping solve some of the nation’s most pressing health issues and becoming more
engaged with their patients and consumers than before.
Source: PwC Health Research Institute
Figure 1: Healthcare businesses should focus on three key areas
to overcome risks and uncertainty in 2018
Healthcare businesses should focus on three key area to over-
come risks and uncertainty in 2018
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