How legislative healthcare reform efforts will affect pharmaceutical meetings.
The uncertain future of the country’s healthcare system has direct implications for biopharmaceutical and medical device companies, and in turn will affect the way these companies approachand healthcare provider education, said Kim Slocum during a keynote address at the Sixth Annual Pharmaceutical Meeting Management Forum. Organized by Medical Meetings and the Center for Business Intelligence, the forum was held March 14–16 in Philadelphia.
Speaking about the current healthcare reform debate in Washington, Slocum, who is president of KDS Consulting LLC, a healthcare consulting firm in West Chester, Pa., noted that despite efforts by congress, the country “may be in a more uncertain environment for reform than we were a year ago.”
Yet without reform “healthcare will certainly collapse and may take the U.S. economy with it at some point over the next few decades,” added Slocum. While both Republicans and Democrats agree that fundamental change is needed, there are deep party-line divisions in how that change should come about.
Healthcare Challenges Are Complex
Slocum detailed some of the most complex and pressing issues facing U.S. healthcare and the challenges the government faces in reforming the system.
Currently 47 million Americans are uninsured and 20 million are underinsured. While the reform debate has been centered on the issue of access, it is also important to address the rising cost of healthcare, which is a dire problem for this country, noted Slocum.
He cited the following data:
- $2.5 trillion will be spent on healthcare by the end of 2010—which equates to 17.6 percent of the country’s gross domestic product.
- In 2008, employers started to spend more on healthcare benefits than they were making in post-tax profits, according to a McKinsey study.
- Healthcare spending will consume the entire U.S. economy in about 60 years if the average growth rate of costs continues, according to the Congressional Budget Office.
The perception of many Americans is that healthcare costs far too much, added Slocum. One of the reasons reform is so difficult, “is because Americans are asking for mutually incompatible things” such as better coverage at lower costs. And as a result most American’s have an unfavorable view of the healthcare industry.
In fact, 60 percent of Americans believe the health insurance industry is to blame for the problems with our healthcare system, according to a Harris Interactive poll conducted in September 2009.
The public doesn’t trust the life sciences industry, said Slocum. “The average American believes that the drug and device companies make too much money and are squeezing everything out of us.”
In turn, the pharma and medical device companies have responded by increasing transparency in their pricing structures and physician payment structures. And more planners are being asked to track and document which healthcare providers their companies are paying, how much, and for what services, in order to comply with increased regulations, noted Slocum.
“Meeting planners should expect far greater public scrutiny of what they do than has been the case in the past,” he added. The healthcare industry has hundreds of bloggers who are looking to uncover a scandal and employees who are willing to be whistleblowers, he added. His advice to planners: “Make sure you understand why you are being asked to do what you do, and that you are comfortable with it.”
Another way drug and device companies are responding to perception issues and pricing pressures is by diversifying into emerging markets like Brazil, China, India, and Korea, where biopharma and med device sales are growing faster than they are in the U.S., said Slocum. “If you don’t have a footprint, get one,” he advised. “This is where a lot of the meetings are going to be held in the coming years.”
Smaller and shorter meetings will also continue to prevail over larger national sales meetings, said Slocum. Expect companies to hold more “fly-in” day meetings and to use more airport properties, as these are more defensible. He also predicted a rise in investigator meetings as companies focus on research and development in order to document the value of drugs and devices and recoup the return from these investments, as well as an increase in meetings that bring the patients to the table with healthcare providers.
Ultimately, heightened scrutiny and negative public perception will increase the pressure on meeting planners to prove their value to their organizations. Corporate planners will need to demonstrate why their role should continue to be an internal function and not an outsourced one, added Slocum. “Proving the value of what you do will be critical.”