While everyone is focused on the Social Security privatization issue and what it means for businesses, I was attracted to a speech by Douglas Holtz-Eakin, Director of the Congressional Budget Office. In his opinion, the bigger problem is Medicare.
Almost all business leaders in companies of all sizes know the impact on the bottomline due to out of control rise in healthcare costs. General Motors will spend as much as $5.6 billion for health care of its employees and retirees in the U.S alone. The story is being repeated all over the country. While companies are coming up with creative solutions - for instance, Toyota is opening up its own pharmacies at its U.S. operations while others are passing on more of their costs to their employees. (Related article: Total spending on healthcare in America)
Two factors are contributing to the increase of Medicare costs - an increase in health care costs and the aging of America - resulting in a projected increase in Medicare spending of 9% per year over the next 10 years. Because of this, the Medicare trust fund will be depleted by 2019, according to Douglas Holtz-Eakin.
The World Health Care Congress has identified several priority areas that healthcare organizations are likely to focus on in the coming year. That means that several new business opportunities will be created in the coming years as these companies employ latest technologies to lower costs and improve business efficiencies:
- Accelerating technology implementations
- Enhancing reporting capabilities and integration of data
- Increase in investments in clinical information systems and the beginnings of a movement towards electronic health records (already highlighted by the President as a priority)
- Increased leverage of the Web by both payers and providers
As a management consultant I can say that right now we are in excellent position to employ most of these solutions since they are all IT based. We need to find high-value opportunities for IT and healthcare is definitely one of them. As the systems designs happen in the United States, we can take advantage of inexpensive resources in countries like India to not only work on these initiatives faster, but also at a lower cost. (Related article: Offshoring forecast to grow at 50%)
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