2012 to bring more health business models, provider-payer partnerships

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Under the pressure of health reform and increasing costs, more healthcare institutions will engage in collaborative business arrangements next year, according to a PwC Health Research Institute report released today. However, those business arrangements will be contingent on "legislative wildcards," according to a press release.

In addition to healthcare reform and economic uncertainty, hospitals and other providers face new state health insurance exchanges, reporting requirements, and increasing drug shortages, which--for better or for worse--have them collaborating and coming up with new business models.

"2012 will be a seminal year for the health industries as businesses wade through economic, regulatory and political uncertainty," PwC U.S. health industries practice leader Kelly Barnes said in the press release. "One of the ways the health industry is responding to these uncertainties is by connecting in new ways with each other and their consumers as they rethink existing business models and previous notions about competition, cooperation and collaboration."

For example, as evidenced by the payer-provider mergers and acquisitions this year, PwC predicts more providers and insurers will team up for population health. Health insurers have already committed more than $2 billion in the last year to acquire or align with physician groups, clinics, and hospitals, according to the report. In 2011, Highmark-West Penn Allegheny, Humana-Concentra, UnitedHealth-Monarch HealthCare, Partners-Neighborhood Health Plan, and WellPoint-CareMore and are among the big-name partnerships, working together on care quality and cost effectiveness.

In addition, nearly three-thirds of consumers said they prefer integrated healthcare models. Thirty-eight percent of consumers said they believe an integrated approach would lower costs, and 36 percent expect that quality of care to improve. With shared savings models, PwC says there should be an uptick in payer-provider relationships in 2012.

For more information:
- read the press release
- check out the study

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