Next Things First

More on Health Care and the Recession by Rob Coppedge
October 5, 2008, 8:00 am
Filed under: disease management, economy, palliative | Tags: , ,

Based on my post the other day, I’ve gotten a few messages asking about which health care sectors will fare the best during recession. While this is a work in progress, here’s our current thinking on the subject:

First, the potential victims:

1. Medical products companies: growth in medical products companies may be hampered by increased regulatory hurdles, capital constraints and the perception that their products are discretionary expenditures.

2. Providers, especially hospitals: Due to the growing uninsured population, potential reimbursement changes and the uncertain ability of a new Administration to drive meaningful reform of health care finance, health care providers may see continued margin compression causing more selective purchase decisions for new, non-clinical services and technologies.

3. Companies offering higher-end health care services to consumers: Again, middle- and upper-middle class discretionary spending will be cut dramatically, and the bells and whistles of concierge medicine, cosmetic surgery, etc. should see a hit. (I haven’t looked at numbers here – just a gut feeling.)

The potential winners:

1. Disease management and prevention (with hard ROI – or, as in some of the models we’ve seen recently, a low enough price point that it doesn’t matter)

2. Companies focused on new solutions for efficient, effective and less-costly communication within the delivery system (clinical coordination, care management, workflow solutions)

3. And, as a very experienced colleague pointed out, palliative care should fare well.

These business models – and lots of others like them – address pressing financial needs, have clear revenue models, are consistent with major demographic trends and should see substantial growth even during an economic downturn.

Posted by RobC


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[…] Rob talked about  how the recession  might affect different sectors within the industry, “More On Health Care and the Recession“.   A hospital, like any business, relies on a variety of financial instruments to maintain […]

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