3 Ways to Stay (Nearly) Legislation-Proof in the Medical Industry
In a dynamic legislative environment, Marc Helberg, VP at Pariveda Solutions, shares insight on how to build a legislation-proof company
There is no constant in healthcare legislation.
In the United States, political opponents continue to argue over the future of former President Barack Obama’s Affordable Care Act: Democrats seek to broaden healthcare’s accessibility, while Republicans aim to minimize taxes and shift subsidies away from health-related issues. This is further complicated by conflicting polling surrounding hot-button healthcare issues. These variables and shifts in prioritization leave little room for compromise, inroads, and even public understanding.
Political feuds surrounding healthcare might not be as contentious everywhere, but that doesn’t mean the situation is comfortable. Around the world, medical providers, pharmaceutical companies, and businesses in the biotech and medical device industries must keep a close watch on legislative shifts.
All of this becomes exhausting after a while. In turn, medical companies must plan ahead to navigate a legislative minefield.
Walking the Medical Legislation Tightrope
Before the ACA, experts predicted that high deductibles would limit the effectiveness of increased healthcare access. This prediction proved to be accurate. Yes, the number of uninsured Americans dropped substantially from 2010 to 2016, and the ACA provided relief for individuals near the poverty line, but it failed to provide much-needed assistance to those just above it.
Looking at the aftereffects, it’s clear that the scope of the ACA didn’t address the broken processes within the healthcare industry. Without including outcomes in the mix, any attempt to fix a system will remain unsuccessful. Outcomes will hopefully earn their place in the spotlight soon — but before that happens, manufacturers should work to get closer to patients and own some of the value of these outcomes.
Pharmaceutical and medical device companies don’t want to bear the cost burden of old systems without receiving the benefits of new outcomes-based alternatives. At the same time, consumers shouldn’t have to front the $84.8 billion bill that pharmaceutical companies currently face.
For medical companies, the ever changing world of healthcare legislation presents many uncertainties. U.S. medical device manufacturers, for instance, found themselves responsible for a 2.3 percent excise tax under the ACA (which is also consistently challenged in government). This back and forth creates major headaches for medical device companies in particular.
Building a Legislation-Proof Medical Company
In such a tumultuous market, medical organizations don’t just need to stay the course and watch carefully for changes — they should work to become legislation-proof. Here are a few ways to stay ahead of the legislative curve and insulate from potential upheaval:
1. Focus on outcomes.
Reimbursement systemscontinue to change and expand. As this process unfolds, manufacturers in medical fields need to get creative with contracting and pricing.
Medical need does not always ensure reimbursement. This is especially true for medical device companies in a post-ACA world. When reimbursement fails to bring in enough actual sales, medical device manufacturers need alternative selling plans. By focusing on outcomes and developing closer patient relationships, these companies can limit their reliability on fickle reimbursement.
2. Eliminate duplication.
Amazon’s entry into the healthcare market promises major shifts: According to a report from Reaction Data, 59% of healthcare provider executives believe Amazon will be the biggest disruptor in healthcare. So what else stands to change? Do manufacturers need to follow traditional distribution methods, or do they have other options?
Existing players can’t continue to duplicate efforts and expect to survive. As disruptors such as Amazon continue to enter the industry, the companies that trim the most fat will be the ones most adaptable to change.
3. Participate in the process.
Businesses that help create legislative solutions will be the least likely to suffer. Medical companies should work closely with the government to participate in the legislative solution, and many already do.
In the U.S., healthcare costs make up around one-third of each state’s budget. Pharmaceutical and health industries also spend the most on lobbying, so this advice isn’t new — it’s essential. Any company looking to avoid issues caused by regulatory changes must earn its seat at the political table.
For healthcare organizations, safety from regulatory change isn’t a pipe dream. However, companies can’t watch from the sidelines and expect to remain unscathed. Only by actively investing in patient outcomes, optimizing processes, and participating in regulatory dialogues can healthcare organizations be prepared for change.