Article preview from IN VIVO - September 2008
As the presidential race heats up, health care executives say they have many reasons to be excited--and nervous. BCG reviews an industry-wide survey on the implications of the candidates' health care proposals for the pharma and device industries.
Article preview from IN VIVO - September 2008
Health Care and the 2008 Election: Revolution, Reform, or Return to Business as Usual?
As the presidential race heats up, health care executives say they have many reasons to be excited--and nervous. BCG reviews an industry-wide survey on the implications of the candidates' health care proposals for the pharma and device industries.
by Pete Lawyer, Jon Kaplan, David Matheson, and Roger Sawhney, MD
- Health care executives are paying attention to the 2008 presidential race, and they think the candidates' health care proposals will have a wide range of positive and negative implications on industry revenue, costs, innovation, and quality of care.
- Executives agree that Medicare price negotiation, supported by Obama - and possibly by McCain - could cut pharma industry revenues - by up to $30 billion.
- However, pharma and device executives expect Obama's plans for expanded access will increase revenues in both sectors
- Similarly, McCain's plan for tax credits to replace the current employer-based health care system is viewed favorably by a majority of respondents.
- BCG analysis suggests caution--the McCain tax credit plan could reduce total health care industry revenues by as much as 3 to 6%, and the uplift from Obama's expanded coverage would accrue mainly to the provider sector.
Senators John McCain and Barack Obama are both touting big plans for health care reform. Those proposals may play well with average voters, but health care industry executives say the candidates have their priorities misaligned, according to a survey conducted by the Boston Consulting Group (BCG) and FDC-Windhover. Seventy-nine percent of respondents in the Boston Consulting Group poll claim that the biggest issue in US health care is the high cost to employers and individuals, versus 34% who name access as a top priority.
Yet access issues receive top billing from the candidates according to survey respondents, who worry that their businesses may suffer as a result of some of the more populist proposals. Pharmaceutical and medtech industry executives are most concerned about the atmosphere for continued innovation, which they expect to fare poorly under many of the programs put forward by the Democratic and Republican challengers alike.
On the positive side, the focus on access is expected to deliver more paying customers--encouraging industry leaders across all four health care sectors surveyed (pharmaceutical, medical technology, hospital, and payors).
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