While the consensus view is the economic recovery will continue well into 2012 as consumer spending and employment increases, the "new normal" bodes well for medical tourism and retail medicine, according to Paul H. Keckley, Ph.D., executive director, Center for Health Solutions, Deloitte LLP.
Keckley said that increasing health costs for most working adults will consume more of their discretionary spending.
As a result, he said, "Insurance companies and employers will likely embrace cost-management strategies, including retail medicine and medical tourism, in benefits designs, buoyed by data showing technologies that facilitate coordination of care in these settings lend to safe and effective evidence-based care at lower costs for most non-urgent needs."
He added, "And social media may accelerate consumer knowledge of these alternatives as Generations X and Y embrace ‘disruptive innovations' that feature personal care tools and technologies." "Disruptive innovations" are those that can change an industry's paradigms like the Web did for travel distribution.
Keckley said that the Center for Health Solutions anticipates "substantial growth" in the medical tourism and retail clinic sectors.
Health care reform "that reduces costs and increases access to insurance coverage for those without is not likely to go away," noted Keckley.
He added: "Through a series of upcoming bills, changes to the financing and delivery system will likely come from the health reform movement: Three of these may drive strong demand for disruptive innovations like retail medicine, distance medicine, medical tourism and others."
The three factors include:
* The potential for 8%-10% insurance premium increases in 2010 to cover increased utilization and costs.
* More investments funding innovations that reduce costs and take market share from incumbent stakeholders.
* The increases in consumer adoption of alternatives to traditional methods of care.
Said Keckley: "The obvious impact of these is potential pressure on the traditional system to provide greater value to consumers - a challenge to many because costs are embedded. The impressive value proposition for retail medicine and medical tourism and the likely spike in health costs for insurance resulting from health reform will likely accelerate adoption and growth" of both sectors, especially if they are seen to provide better value.
"The U.S. system," Keckley said, "cannot sustain 6% annual cost increases for health care while its overall gross domestic product (GDP) is 3%. The system must transform itself to deliver better value."