Category Archives: Middle East and Africa

A new frontier for Pharmaceuticals

What key trends will affect pharmaceutical companies’ operations and business success in 2016?

As we have already seen over the past years, there are a lot of changes in the pharmaceutical industry environment. We have various transitions and a very dynamic process behind this area, and important points that certainly affect operations and business in the pharma market are, for example: a) less launching of “blockbusters”, which represents less big or explosive revenues, b) the risks and dangers of the ‘patent cliff’, c) much more controlling strategies through payers (for example: drugs and medicines should be not only clinically effective, but also economically successful), d) more strength reimbursement policies, and also e) the continuously and quickly growing generic market.

Which strategies are most effective in managing supply chain for new innovative pharma products?

To face the coming problems and challenges, one of the key points to keep the pharmaceutical industry and advances in healthcare viable is, for example, the increase in the number and quality of innovative (truly innovative and not only “slightly different” or reformulations), economic – that is, cost-effective – new products. For example, for niche areas (such as orphan drugs), for areas with really no alternative up to now, smaller but more frequent launches, and with as low as possible marketing costs, in order to be able to invest more in RD costs, as RD must be ideal and optimized for real innovations. Minimizing marketing costs should occur through solid and emotionally empathetic relationships with the payers, prescribers and consumers. If these 3 “actors” from the healthcare systems work together, it would be possible to achieve the ideal development strategies for the right products. For example through partnerships between pharma and health insurance services aiming to achieve bilateral education; partnerships and cooperation between health insurance services and physicians and clinics or healthcare organizations, also to promote education and clarification and the development of common projects, as well as innovative projects, which aren’t so economically heavy or marketing-focused in order to comply with codes of conduct and regulations in different countries nowadays. Another alternative is the development of common projects with patient organizations – perhaps, for example, through a group of different pharma companies – but with a similar pipeline in some areas – and this would demonstrate to the population the true aim of “helping” and not only “making money” – as many people currently perceive the pharmaceutical industry. However, these are often ignored by the “big Pharma”- instead of joining all powers together, each sees the other as the enemy! This is not constructive.

What impact is the Patent Cliff set to have on the pharmaceutical industry in coming years?

The expiration of many patents during recent decades, the higher hurdles of reimbursement, the greater difficulties for new drug approval and continuously growing generic market makes the impact of the patent cliff ever more noticeable, and this will last into the coming years. So, small companies will most likely be bought or will merge with bigger ones, and there will come a time to rethink what to produce, in order to overcome this situation. There are still alternatives and possible strategies, as previously described, for a better interrelationship between pharma, patients and healthcare organizations – such as insurance providers, for example. The development of truly innovative medicines cannot occur without the help and support of the customers. However, the traditional kind of feasibility work that has been performed in pharmaceutical companies is very often completely beyond reality or far removed from “real life”. Even the development of clinical study documents, such as protocols and IBs, are sometimes extremely customer unfriendly. This occurs because there are a lot of people in the pharmaceutical industry – especially physicians – that have never worked with a real patient in a real medical or clinical environment. Many of these employees are involved solely in the theoretical aspects, and this can lead to serious mistakes during planning and performance of the drug development programs. However these issues are also often simply disregarded.

According to Andrew Ward writing for the Financial Times, dozens of big investors have backed a campaign by British activists for more transparency in the pharmaceutical industry. Helena Viñes Fiestas, head of sustainability research at BNP Paribas, stated that “open access to clinical data was as important for investors as for doctors and patients, because trial results heavily influenced the way that drug companies were valued.”

How will rising pressures for transparency impact the pharmaceutical industry?

Is the automobile industry transparent to such an extent? Are any other innovative industries? No one shows their plans before going onto the market – and neither should the pharmaceutical industry. There is also the issue of data safety, because during studies we work with human beings – individual people whose privacy must be protected. The pharmaceutical industry, together with patient organizations and healthcare organizations, have to work in cooperation to face this issue and only accept a level of transparency that would not be dangerous for all. The pressure will rise but must not be accepted in this way.

.

 

How will the health care supply chain be transformed in 2015?

Introduction

The healthcare system is transforming due to a myriad of internal and external factors.  The challenge common to Integrated Health Care Delivery Networks (IDNs), Accountable Care Organizations (ACOs) and others can be summed up in a single word – reimbursement.  A survey of thought leaders from these organizations found that over 70% expect their margins to decline 10-20% due to lower reimbursement.  Manufacturers see significant supply chain improvement opportunities through the adoption of new technologies such as cloud computing to reduce costs and increase revenue.  Quite clearly, healthcare in general and hospitals in particular need to rapidly change, adapt and embrace the benefits of supply chain management long employed by healthcare industry manufacturers and suppliers.

The Suppliers

Pharmaceutical, medical device and other suppliers have incorporated supply chain management systems into their companies.  A 2015 study found that supply chains are responsible for 25% of pharmaceutical costs and 40% of medical device costs.  Cleary, there is work to be done here given the annual spend of $230 billion on pharmaceuticals and $125 billion on medical devices. If the healthcare sector as a whole adopted the systems used in other fast moving industries such as consumer and technology, it is estimated that costs could fall for the above two mentioned segments by more than $130 billion.  The lead time from pharmaceutical plants to distribution centers is on average, 75 days.  Contrast this to approximately a week, from order to deliver, for a shipment of laptops from sources in the Far East.

Suppliers of healthcare will likely find 2015 supply chain solutions in cloud computing.  The Cloud offers a common supply chain platform that ameliorates many of the problems associated with implementing fully integrated, specialized supply chain systems and addresses the critical need for collaboration amongst all in the value chain, and yet, challenges remain.  Cloud computing is very dependent on legacy systems and although Information Technology (IT) departments are asked to do more, they only spend on average 10% of their budget on new applications.  As cloud computing becomes more widely adopted by large scale supply chains, they can look to enjoying the rewards of greater response speed, agility and resolving problems through greater collaboration between all stakeholders. These benefits can be expected to improve the bottom line, resulting in increased margins and revenue.

Hospitals

IDNs, ACOs and large hospital groups are faced with not only lower reimbursement, but the impact of legislation from the enactment of The Affordable Care Act (ACA), commonly known as Obamacare.  This alone has morphed the reimbursement focus from being volume based to incentive based. Instead of being paid on the number of procedures performed, hospitals must embrace end to end healthcare delivery supply chains to manage procurement costs, monitor cost per case, re-admissions and other factors that could jeopardize their continued operations.  It is a business tenant that you cannot manage what you do not monitor. Supply chain systems provide the data that can be turned into actionable management, system improvements and business critical cost savings.

Expect the distribution model to continue to change in response to market factors.  Many IDNs and ACOs are adopting Warehouse Management Systems (WMS) of their own, rather than ordering from large medical supply distributors such as McKesson, Cardinal and others.  Savings from these new procurement solutions is a significant opportunity for users.  Simply put, it immediately eliminates the distributor markup on products and does so in a very fast period of time. It is estimated that with self-distribution, where hospitals purchase directly from the manufacturer and assume the distribution responsibility by implementing WMS’s, the payback can be in as little as six months by moving just ten vendors from traditional to new self-distribution systems.

Summary

Healthcare is an extremely fragmented and non-standardized industry relying on traditional methods and systems to successfully overcome today’s rapidly changing challenges. Utilizing new technologies such as cloud computing, WMS and fully integrating and refining supply chain management systems will help both suppliers and users of healthcare products to deliver better quality of health care at a lower cost. Collaboration among all those involved in the value chain, IT software suppliers, manufacturers and end users, to name a few, is essential for the healthcare industry to profit, evolve and prepare for the business challenges of 2015 and beyond.

How will specialty drugs affect the global healthcare industry in 2015?

The recent price battle between competing Hepatitis C treatments from AbbVie (Viekira-PAK) and Gilead Bioscience (Harvoni/Sovaldi) for best placement on preferred drug coverage lists has revealed, once more, the complexity of commercializing innovative new drugs by pharma companies. Indeed, specialty drugs i.e. new generation therapies used to treat severe illnesses such as cancer, hepatitis C or autoimmune diseases (e.g. multiple sclerosis), are attracting increasing pharma/investor/government interest and are steadily replacing traditional drugs in the annual list of FDA-approved drugs (expected to account for >50% of all new approvals in the upcoming years1).

The implications of this rapid growth are currently changing the landscape in the global healthcare industry. Boosted by a significant number of life-changing specialty drugs recently approved for “tough-to-treat” indications (e.g. metastatic melanoma), current pipelines of pharma companies are increasingly geared towards new specialty drug development. As such, an unprecedented number of new specialty drugs are being brought into clinical trials; these target not only “traditional” indications such as cancer, diabetes, hepatitis C or cardiovascular diseases, but also a wide range of rare/orphan diseases. Combining this approach with “breakthrough” drug development approval opportunities recently employed to bring revolutionary new drugs rapidly into the market (e.g. anti-PD-1 antibodies) is further expected to benefit patients across several therapeutic categories in a highly significant manner. From a financing perspective, the growth of specialty drugs is also shaping the investment industry as venture capitalists are clearly favoring investments in this development area (and are therefore driving biotech companies towards relevant approaches). Increasingly manifested during the last years, these trends will continue to influence the healthcare industry in 2015. Overall, we predict increasing investments, development activity and specialty drug approvals in 2015 versus previous years.

However, new specialty drug development doesn’t come without drawbacks. Although pharma companies argue for long term benefits of these treatments (utilizing reasonable arguments to their favor), regulatory agencies and governments are unwillingly called to pay the soaring bills. With the spending on specialty drugs expected to increase by 361% by 20201, the overall burden to the healthcare systems will thus be tremendous. Our prediction for 2015 is that price competitions such as the one between Gilead and AbbVie will continue. Moreover, we predict increasing reactions from regulatory agencies known for their price-cutting concerns/policies (e.g. NICE, UK); these will build up the pressure to the industry.

Notwithstanding the above, and thinking solely from a patient’s perspective, the upcoming years will offer lots of hope and optimism as a significant number of really innovative therapeutic options tackling critical diseases will hit the market. The question is of course if all patients will have access and/or can afford to pay for those treatments…

1 PWC Health Research Institute, “The cost of innovation: A closer look at specialty drugs” 2014, http://www.pwc.com/en_US/us/health-industries/behind-the-numbers/assets/pwc-pharma-specialty-drug-infographic.pdf

What are the top 3 challenges in turning the digital payments opportunity in Africa into an attractive revenue stream?

What is digital payment? It’s the use of a range of technology trends for the buying and selling of goods or services offered through internet or broadly to any form of electronic funds transfer. Some of the known trends accepted in parts of Africa include mobile money, money wallets, ATM cards, wire transfer, credit cards, electronic fund transfer etc.

In West Africa, Ghana to be specific, and some African countries have embraced the digital payment technology. In fact it is a fast growing technology in Africa and it’s creating a lot of competition especially in the banking and telecom sectors. In Ghana, it has become one of the strongest selling tools for the telecoms and the banks. It is bringing about a lot of healthy competition and innovations in these industries. Gone are the days when customers of banks were just sold a current account or a savings account. Now, this continent has come of age. Customers who come to, for instance, the bank leaves with about four products and these include; a current or savings account, internet banking, sms alert and a visa debit card to allow them further their transactions from other point of sale. 

Now a lot of customers of these institutions can do transactions online or on their phones in the comfort of their homes and offices, without going to the bank to queue, and people receive alerts on their phones as soon as a transaction hits their accounts. The growth internet usage and the emergence of smart phones on this continent have also helped making this dream come alive. In Ghana for instance, about 75% of the population are now using mobile phones.

Ghana and for that matter Africa as a whole is enjoying some flexibility with these innovative ways of doing business. But at the back drop of these simple and flexible ways of doing business lay a lot of challenges that is making digital payments in Africa very unattractive and slowing the growth of it.

I have identified the following as my top 3 challenges that are making digital payments unattractive; connectivity, illiteracy and cost

  1. Connectivity:  Internet connectivity is very critical when it comes to digital payment. About 80% of the digital payments depend on the availability of a free flowing internet. In this part of the continent it is a big challenge since some countries in Africa still remain unconnected to the most basic store and forward technologies. Even those who have providers present in their countries, lack the ability to coordinate information. There is no mutual national or international coordination due to political instability in some African countries (everybody wants to coordinate, but nobody wants to be coordinated). Aside some southern Africa countries, the majority of our links are connected via Europe and the Americas. My personal experience, I did a transaction through internet banking and it took three days to reflect. And this is a worry to a lot of customers. Also the monopoly tactics employed by some telecom giants in Africa also hinder the swift operation of digital payments. Some service providers are not allowed to provide the value added services due to the monopoly enjoyed by these telecom giants especially if they have government backing.
  2. The second challenge identified is Illiteracy. The aggregate of illiteracy on the African continent is hovering around 50%. In Ghana for instance, one of the biggest market you can find is situated in Accra central and majority of these traders are illiterates and are finding it very difficult to understand and adjust to the new trends of doing business (ie. Digital payments). They openly oppose the signing on or the usage of these payment solutions. I can’t base my claim on facts but I believe it cuts across the continent hence hindering the rate of adoption to digital payments greatly, considering the percentage of illiteracy on the continent.
  3. The final challenge I consider as a hindrance to digital payments in Africa will be Cost. There is a smart phone boom in Africa and strong demand for digital payment solutions but the high tariff charges and the cost of even educating the masses on the use of these payment solution is so high that some countries on the continent cannot afford it and resort to the use of analog links that are extremely difficult to integrate to newer technologies. The cost of building and maintaining the infrastructure needed to execute these payment solutions is so high that some telecoms or service providers shy aware from it and making it very difficult to make this dream a reality.

For these payments solutions to survive or work effectively in Africa, telecom companies must begin to work together in achieving singular goal instead of battling to dominate market share. Equally, banks telecom companies and merchants or retailers like, Game Shoprite, Palace, and Melcom should work closely together. Currently some of these retailers are of the view that these banks and telecom companies are out to exploit them and take their moneys. If the cost of operating the payment devices are reduced or shared equally amongst this group of people, I believe it will improve the patronage of the digital payments.

 Also if the target market for the digital payments is both the banked and the unbanked, then a lot of compromise must be made. There should not be frequent charges on the use of say money wallets or mobile money and the likes, and whatever will be charged must be explained thoroughly to the user. Lastly, governments put out clear and simple measures so that other service providers can also come in and support with trends and new technologies.

What are the 2014 global SaaS trends that will shape the industry?

Cloud Market Overview for 2014

2014 is set to be a stellar year for Cloud Computing in general and SaaS in particular. An estimated 70% of SaaS customers are from “Small to Medium Businesses” with 80% of Enterprises still concerned with the Risk issues of both Security & Compliance. With 2013 being hailed as the “Year of the Internet Breaches” where everyone from Amazon to Ebay, Facebook and Forbes, IRS to Target being hacked and literally hundreds of millions of customer data being compromised, it’s no wonder “Steve Wozniak” in his now famous 2012 statement, in respect to the public cloud saw “…horrible problems…” with the cloud due primarily to the blatant lies in marketing which claim the cloud is “safer than your own private enterprise infrastructure”, an actual claim on numerous websites and in interviews by executives at Amazon, Google and other major Public Cloud companies which, in my opinion (just like Steve said) has definitely harmed the whole cloud market from a trust perspective. As executives become more educated about the realities of cloud computing and the public cloud in particular, they realize those kinds of statements are far from the truth it, and it has left a bad taste in many executives mouths for the public cloud, which I’ve experienced first hand. What it has done is made enterprise executives who see these blatant lies for what they are, much more cautious which, in the long run is a good thing since, I believe, they should take time and not jump into the public cloud without careful consideration, a lot of planning and a complete & unbiased third party risk assessment.

So, although cloud sales are steadily increasing, with total Global Cloud spending expected to reach $75B-$100B globally (depending on which analyst you speak to) in 2014, I believe the frequent and highly publicized breaches have hurt the market and so, look for a slow-down in the SaaS market overall, as companies take stock to address the security and compliance concerns before they stick their big toe into the swamp that has become the cloud market, to “test the waters” so to speak.

SaaS Service Management

According to new research by Enterprise Management Associates (EMA), most IT organizations have limited visibility into the usage and cost of public SaaS applications. I believe in 2014 you will see more organizations seeking solutions to this problem and for that reason I see the “SaaS management” market as one to keep an eye on in 2014. Both new startups and existing “SaaS Management” businesses should see an increase in sales over the next few years and you should also see a market consolidation with the best players acquiring or putting out of business the lesser product/service vendors.

Security & Compliance

Security & Compliance will be the real winner in 2014. Again with 2013 being named the “Year of the Security Breaches” and hundreds of millions of private data being compromised at mainstream websites, look for SaaS Enterprise growth to slow down even more while start-ups race to secure market share of this massive new “Public Cloud Security & Compliance” emerging market.

Currently an estimated 80% of Enterprises fear to enter the Public SaaS market (according to multiple surveys), and for good reason as the risks have been shown to be astronomical indeed. As new software, hardware and services begin to appear to address these concerns such as the new CSPComply service by Compass Solutions, LLC of Washington DC and others, we should begin to see an uptick in SaaS adoption starting to appear, however I would not hold my breath for that to occur in 2014, look for this increase to be more pronounced in 2016 and beyond.

Medical-Device Technology

Another emerging market which is expected to be massive indeed is the so-called medical-device market. Products such as the FitBit Flex wrist band and FitBit Aria wireless scale seem to motivate people to reduce weight and exercise more, as studies are beginning to show us. Currently there are socks, ankle bracelets and even sneakers which all work together as a unit with embedded sensor technology to show your heat dispersion pattern on your feet, how many miles you’ve walked, your average rate of speed, how many calories you’ve burned, your heart-rate and other data including your travel patterns.

Many of these devices utilize a SaaS infrastructure, which along with additional factors will lead to more “service” oriented SaaS business models being developed in 2014 and through the next few years, with the Medical-Device Market being a major influence.

“Hyperconverged Network Paradigm”

As technologies such as the next wave in wireless 802.11ac begin to take hold bandwidth in the first-wave 80MHz products will deliver throughout from 433 megabits per second on the low end to a maximum of 1.3 gigabits per second at the physical layer & more dense modulation schemes of up to up to 256 quadrature amplitude modulation (QAM), compared to 802.11n’s 64 QAM, for a 33 percent improvement. The new protocol doubles multiple input, multiple output (MIMO) capabilities. The increase moves from 802.11n’s four spatial streams to eight streams. For users, this means a speed boost, greater up-link reliability and opportunities for improved down-link reliability as well. For the internet this means massive increased bandwidth issues which, was why the IPv6 Protocol was developed in the first place…Look for IPv6 to also be a big winner in 2014 and beyond as more and more ISP’s, Backbone Providers and Telco’s begin migrating over from IPv4 do to the massive increase in bandwidth demands in 2014 and beyond.

  •  A growing number of manufacturers are already shipping first-wave 802.11ac products for consumers and plan to expand offerings for business and enterprise network environments in the coming year. A Second Wave in Performance Speed and efficiency will ramp up even higher when Wave 2 devices for 802.11ac arrive. They’ll offer additional improvements in channel bonding by handling up to 160MHz, along with support for four spatial streams. These capabilities will help second-wave devices achieve throughput of around 3.47Gbps. (Source Cisco)
  • Worldwide smartphone shipments grew 40%, to more than 1 billion units, in 2013 and are on pace to reach 1.7 billion units by 2017.  (Source: CDW)
  • In 2014 we will see an increase of both “Smart” mobile devices, increased access to unlimited storage space on these devices via the emerging free and subscription cloud storage, and a “Quadrupling” increase in bandwidth beginning as 802.11ac takes hold, and most important of all the majority of the mobile carriers will finish large portions of their 4G/LTE infrastructure upgrades over the next three years starting with some pretty large expansions this year which most analysts seem to ignore or forget even though this will be by far the largest contributor to the “hyperconverged” market, as wherever these increased bandwidths occur, increases in sales of “smart”, “handheld” mobile device sales increased dramatically. Look for all of these emerging technologies to trigger a number of unique situations as well as opportunities and even new markets. This type of increased traffic has never been experienced before and my prediction is it will cause many problems with unprepared SaaS infrastructure capacity which you should be prepared for in 2014. However, even more important will be the emergence of the “Hyperconverged” network, the increased importance of the end-point device within the Enterprise market and the increased importance of the emerging “Bring Your Own Device” & “Bring Your Own Technology” (BYOD/BYOT) market and the management of as well as the security & compliance issues associated with it. Look for these emerging technologies and markets to become major influencers receiving large boosts in both Capital investiture as we as large sources of new ideas and SaaS solutions to address the issues which will be created by this new paradigm.

“However the reality is that all of these devices as they begin to communicate back to the cloud will begin to seriously erode the bandwidth capabilities of the current infrastructure, so look for startups with unique ideas of mitigating this increase in traffic to play a niche yet exciting and influential role as the “idea” people and “Think-Tanks”  & “Brain-Trusts” such as the new “Synapse Synergy Group” begin to come into their own in 2014 and beyond” – Quote by Jarrett Neil Ridlinghafer

 Market Consolidation

Finally, we should see a lot more consolidation of the SaaS market with the winners and losers become clearer in 2014. Look for Amazon to steam ahead and broaden their lead, Salesforce will continue to be strong although they are already looking for ways to broaden their market as their primary business slows down, Microsoft will attempt to reinvent themselves in the Cloud with their new CEO at the helm and Oracle and IBM should begin to capture more market share as both of their new services start to take hold. As for VMware it still seems a bit too early to say one way or another. They did not come out with a big splash and a few Billion Dollars to throw around like IBM and they actually do very little marketing, which makes one wonder, are they really ready or did they jump early in order to stop their slide to cloud obscurity, or are they so confident they just don’t need to advertise their cloud offering? They obviously have a massive private cloud and enterprise infrastructure base from which to draw on, so one would hope with their vendor specific offering, that all those VMware Enterprise infrastructures will pay off as Hybrid becomes a much larger player over the next 3-5 years in the Enterprise.

What are the key trends in global mHealth industry and which of its segments will be the key growth drivers over the next 12 months?

  1. Monitoring services (up to 66% of the Global mHealth market share)
  • Remote Patient monitoring
      • (e.g. Obesity Management
      • Healthy Living
      • Pregnancy Tips
      • Elderly Care
      • Smoking De-addiction
      • Infectious Diseases
      • Reproductive Health
      • Child Health / Child Care…)
  • Video conferencing and online consultations
          • e.g. Telephone-based consultations
          • Video consultations
          • Text-based consultations…
  • Personal healthcare devices
  • Wireless access to patient records and prescriptions
  • Chronic disease managementIndependent ageing applications in developed markets 
  • Post acute care monitoring services
  • Monitoring of patients with metabolic conditions such as obesity and Diabetes (is expected to comprise about 40% of the chronic disease management Segment)
  • Monitoring patients with cardiovascular conditions such as hypertension, coronary artery disease and congestive heart failure (is expected to contribute about 45% to chronic disease management revenues in the US and about 80% in China).
  • Analysis of general health and wellness data gathered by mobile devices

 2. Diagnostic Services (up to 16% of the Global mHealth market share)

  • Interactive messages that help patients self-diagnose minor ailments
  • Medical call centres / help-lines manned by healthcare professionals
  • Telemedicine solutions that enable doctors to ‘see’ patients through wireless broadband
  • A majority of the revenues from Diagnosis services are expected to come from call-centre and mobile telemedicine solutions.              
  • The adoption of Diagnosis services is expected to support developing markets in bridging their healthcare access challenges.

 3. Treatment Services (up to 11% of the Global mHealth market share)

  • Emergency Response
  • Ambulance based Solutions
  • Treatment Compliance
  • Appointment Reminders
  • Use of mobile device to explain/demonstrate during office visits
  • Provide patients access to portions of their medical record
  • Drug adherence and other health-related communication

 4. Healthcare System strengthening Services (up to 7% of the Global mHealth market share)

  • Patient-centred care
  • Wellness (up to 3% of the Global mHealth market share)
  • Prevention (up to 1% of the Global mHealth market share)
      • e.g. Drug Abuse Prevention
  • Information Lookup and Decision Support
  • Health Surveys & Healthcare Surveillance
  • Healthcare Practitioner Support
  • Healthcare Administration& administrative communication

Courts Impact on Clinical Diagnostic Companies

More than regulation and reimbursement, court decisions regarding key US patents are shaping the landscape for innovative molecular diagnostic tests and the fortunes of companies that develop them. The first case this year was decided in June by the Supreme Court of the United States. The decision of the Court invalidated some of Myriad Genetics’ patents covering its well-known BRAC ½ test that is used in determining a woman’s risk of developing breast and ovarian cancer based on their genetic profile. This opened Myriad’s virtual monopoly on BRAC ½ testing to new and some very adept competitors such as Ambry Genetics, GeneDx and the largest commercial reference lab in the world, Quest Diagnostics. Continue reading

Hospital Mergers Yield Many Benefits

The largest surge in hospital mergers over the past ten years is having an unexpected benefit. These new super-sized healthcare systems are gaining leverage over managed care systems as they negotiate new contracts. Two recent reports in the New York Times and by Pricewaterhouse Coopers cite that this round of hospital consolidation will give large regional hospitals systems the ability to not only negotiate more favorable terms with payers, but also to raise prices, even in face of lower reimbursement rates from payers such as Medicare and Medicaid. According to Booz Allen, up to 1,000 of the nation’s approximately 5,000 hospitals may merge over the next 5 years. Continue reading