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Healthcare 101 & HLS Symposium
PreparationSeptember 15,2013
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Why Healthcare?
Size• Currently 1/6 of US economy• Increasing international access
Dynamic Nature•Healthcare reform•Changing and evolving population
Perpetual Innovation•Industry driven by need to continuously innovate (patent expiration)•New products, services, and markets present new marketing challenges
Positive Impact•Work for a company and industry that works to improve the length and quality of peoples lives
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Healthcare spending is exploding
Source: http://www.cms.hhs.gov/NationalHealthExpendData/downloads/proj2005.pdf
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
1999 2000 2001 2002 2003 2004 2005* 2006* 2007* 2008* 2009* 2010* 2011* 2012* 2013* 2014* 2015*
Year
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Spend Spending as % of US GDP
Nati
onal
Hea
lth E
xpen
ditu
res (
Billi
ons U
SD) N
ational Health Expenditures as % of GDP
U.S. Healthcare Spending
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Retail: Who buys? Who pays? Who chooses?
Amazon.com ConsumerPlaces Order using Visa
Ships Order
Credit Card (Bank)
Check card; bill
Pay $ Pay $
Bill Cardholder
Pretty simple to follow the money
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Healthcare: Who buys? Who pays? Who chooses?
Producer
(Pharma/
Device)
Wholesaler/
distributorsShip Product Ship Product
Payor(Gov’t, private
insurance)
Consumer
(Patient)
Pay $ (AWP)
Files “Claim”
Pays $ (Reimbursement)
Payment (“Premium”)
IT’S COMPLICATED
Provider(Physician, Hospital, or Pharmacy)
Pay $ (WP)“Co-Pays”
Product or Service
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Healthcare Landscape
Pharma/Biotech
Medical Device
Payors & Providers
Healthcare IT (EMR)
IndustryRegulatory
Uncertainty
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Pharma/Biotech is Growing
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Pharma/Biotech Leading Corporations
Industry lives and dies by patents; patent life is 20 years from filing “+10 years and +$1 billion dollars to bring a drug to market”
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Pharma/Biotech Leading Therapy Areas
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Medical Device is Growing
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Medical Device Market Split by Sector
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Cardiovascular Device Sector
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There are Many Types of Providers
Health Systems/Hospitals
/ACOsOutpatient Clinics
Physician Offices
Pharmacies
Home Health Agencies
Rehabilitation Centers
Hospices
Nursing Homes
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Hospitals in the US
Source: IBISWorld Industry Report “Hospitals in the US,” July 2013
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Payors: The private market follows the public trends
US Payors:
• Public (CMS): ~$1,200B in 2013• Medicaid• Medicare
• Private: ~$630B in revenue in 2013• Employer-sponsored• Out-of-pocket (exchanges)
Negotiation power:
• Access• Pricing• Gov’t > commercial > exchanges?
Global implications:
• International payors – usually governments & OOP
• Global benchmarking for pricingSource: IBISWorld Industry Report “Health & Medical Insurance in the US,” July 2013
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In 2010, private insurers collected $650B in premiums
2010 Rank (market share)
Health Insurance Company
1 United Health2 Wellpoint3 Kaiser Foundation4 Aetna 5 Humana6 HCSC Group7 Coventry8 Highmark9 Independence Blue Cross
10 Cigna
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Roughly 32 million Americans will gain coverage starting in 2014
Medicaid expansion (~ 16 million) Citizens with family incomes < 138% of the FPL will be eligible Newly eligible will mainly be childless adults
Private coverage through Insurance Exchanges (~ 16 million) Citizens with incomes between 100% and 400% of the FPL will be eligible
for premium tax credits
Young adults can remain on their parents plan until age 26 Has increased coverage by 2 million already
Regulatory: ACA increases insurance coverage
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Some use policy levers unique to the Federal government Reductions in Medicare payments to private health plans Reductions in the growth of Medicare reimbursement rates Reform of the tax treatment of employer-sponsored insurance
Many build on private sector initiatives already underway Integrated, accountable care Bundled payments Increased use of electronic health records
It is too early to judge ACA, but private sector developments may already be having an impact
ACA also aims to reduce the growth in spending
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Consulting
General Management
Finance
Marketing
Operations
Strategy/Business Development
MBA Opportunities
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Pharma / Biotech Medical Device Payer / Provider / Retail
Healthcare Recruiting at Ross
And many others….
Consulting
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HLS Symposium – BE PREPARED, BE PROFESSIONAL
Formal business attire (bring your name tags!)
Be on time
Come prepared with some questions
Know a little bit about the companies you’re interested in
Be nice, humble, and polite to recruiters and other students
Stay for the entire event
HAVE FUN!!
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Sources of Information
• Impact (several events this week)• HLS education events & corporate presentations• Kresge: Databases (tutorial on Monday) & Librarians• Students, Professors, Alumni
Internal (Ross)
• Company websites• Google & Fierce alters• Recruiters (use caution!!)
External
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Summer Intern Experiences