NEW YORK, Dec. 19, 2007 (GLOBE NEWSWIRE) -- The health industries face a pivotal year ahead as they anticipate the outcome of the 2008 presidential election and adjust to a new Medicare payment system, additional reporting requirements, pressure on Big Pharma to cut costs and innovate, the rise of retail health services and the ongoing evolution of consumer-directed healthcare. The implications of these issues are addressed in the Top Eight Health Industry Issues in 2008, an annual review of the pressing issues in healthcare, released today by PricewaterhouseCoopers' Health Research Institute.

"The future strategies of hospitals, commercial insurers, pharmaceutical companies and life sciences firms will be influenced by big changes ahead in government policies, market pressures and global trends," said R. Carter Pate, Global and U.S. health industries and government services leader, PricewaterhouseCoopers. "With healthcare costs taking a bigger bite out of the assets of individuals, businesses and the U.S. economy, there is a demand for greater accountability from the health industries and a demonstration of the value they create."

PricewaterhouseCoopers' Health Research Institute identifies the following eight issues that will dominate health industry discussions in 2008:

 * Retirees Will Play a Greater Role in Funding Their Healthcare
   Coverage

   Three-quarters of executives at multi-national companies surveyed
   by PricewaterhouseCoopers in 2007 said that, while employers should
   help provide access to affordable retiree health benefits, they no
   longer should be expected to pay for it.  Is this the bell tolling
   for retiree health coverage?   PwC's report suggests that in 2008
   employers may reexamine their approach to retiree healthcare by
   capping and/or eliminating traditional retiree benefits from their
   balance sheets and shifting toward "defined contribution" or "no
   contribution" approaches.

 * New Medicare Payment System Will Create Hospital Winners and Losers

   The Centers for Medicare & Medicaid Services (CMS) has changed the
   way it pays hospitals, adding 200 diagnosis codes that more
   precisely recognize the severity of illness among patients.  As a
   result, hospitals that treat sicker patients will be reimbursed
   more for doing so, potentially leveling the playing field between
   general and specialty hospitals and between rural and urban
   hospitals.   That, combined with CMS's new stance to not pay for
   certain conditions resulting from medical errors, infections and
   other maladies acquired in a hospital, mean some hospitals may see
   a decline in revenue.  In 2008, watch for commercial payers to
   follow in CMS's footsteps and an increased demand for medical
   coding staff.

 * Retail Health Clinics Will Challenge Primary Care Models

   Driven by consumer demand for convenient and lower-cost medical
   care, the number of retail clinics in discount chain stores,
   grocery stores and drugstores throughout the U.S. is expected to
   quadruple, from 700 today to more than 3,000 in five years. In the
   year ahead, U.S. states, payers and policymakers will be crafting
   legislation and policies applicable to this new breed of healthcare
   provider, which lacks uniform regulation and quality controls.  The
   growth of retail healthcare could create opportunities for
   providers, or it could threaten the primary care delivery model.
   Pharmaceutical companies may choose to step up marketing directly
   to nurse practitioners who staff the clinics.

 * Individual Health Insurance Could Take Off

   Typically more expensive than group health insurance, individual
   health insurance could see market growth as more states mandate
   health insurance such as Massachusetts has done, and if an
   individual mandate or additional tax incentives come to fruition
   from proposals by Republican and Democratic presidential
   candidates.  Hospitals and other providers may suffer if these
   plans offer limited benefits, but in the long run would benefit
   from fewer uninsured Americans.  Look for insurers to tailor
   products and distribution strategies to individuals in the year
   ahead.

 * Increased Merger and Acquisition Activity Between Pharmaceutical
   and Life Sciences Companies

   Revenue growth is down for Big Pharma: The pipeline of new drugs
   coming to market is thinning, big money-making brand drugs are
   coming off patent, and the cost of bringing new, innovative drugs
   to market is increasing.  To address these woes, Big Pharma is
   joining forces with life sciences companies.  In the first quarter
   of 2007, life sciences firms recorded the most deal activity and
   the highest dollar amounts for mergers and acquisition deals than
   any quarter in their history.  With these collaborations, life
   sciences companies are now driving the industry whereas big
   pharmaceutical companies once had a significant advantage.  To fill
   the pipeline and accelerate innovation, look for greater
   collaboration between pharmaceutical and life sciences companies
   through mergers, collaborative risk-sharing, joint ventures and
   other co-development and co-promotion arrangements.  An unknown is
   whether regulators will clear a path for generic versions of newer
   biologic drugs, which could cause disruption to pharmaceutical
   companies' future revenue streams.

 * Asia Plays Bigger Role in the Pharmaceutical Industry, but Safety
   Concerns Loom

   Asia is poised to become one of the world's largest pharmaceutical
   consumers and producers.  The rising cost of drug discovery has led
   pharmaceutical companies to look outside the U.S. for a less
   expensive workforce and to outsource both clinical development and
   manufacturing operations overseas. Yet there are significant
   concerns regarding Asia's uneven protection of intellectual
   property rights and Asian drug safety.  If a large portion of
   fundamental intellectual property creation moves to Asia, the
   West's dominance and ownership in medical scientific breakthroughs
   may rapidly decline.

 * FDA Tightens Drug and Medical Device Safety Standards

   Congress granted the U.S. Food and Drug Administration increased
   authority to require, not just request, increased safety standards
   from drug companies, and it gave the FDA increased authority over
   post-market drug safety.  Under new FDA guidance, the
   pharmaceutical industry will face even more regulatory burdens,
   which could be costly.  Physicians and hospitals will need to
   adhere to new restrictions in prescribing and dispensing certain
   prescriptions.  Look for payers to track and report to the FDA
   insurance claims data that identify patterns of adverse reactions
   to certain medications, such as off-label drugs prescribed for use
   in ways not approved by the FDA.

 * IRS to Seek Full Accounting of Hospital Community Benefit

   The Internal Revenue Service wants hospitals to submit a full
   accounting of the benefits they provide to the community, reported
   in a uniform manner, as part of their annual tax return to the IRS,
   submitted on the proposed 2008 Form 990 and available for public
   inspection. Many hospitals document their community benefit, but
   have done so inconsistently.  In 2008, tax-exempt hospitals will
   need to start tracking community benefit efforts so that, when and
   if required, they can accurately report their activities for the
   year.

"The government and the public have high expectations that the health industries will deliver safe care and safe drugs and will meet consumer and patient demands for innovative products and services," said Dr. David Chin, partner and leader of PwC's Health Research Institute. "Now there is some real accountability behind many of these expectations."

A full copy of PricewaterhouseCoopers' Health Research Institute's Top Eight Health Industry issues in 2008 is available online at www.pwc.com/hri.

About the PricewaterhouseCoopers Health Research Institute

PricewaterhouseCoopers Health Research Institute (www.pwc.com/hri) provides new intelligence, perspective and analysis on trends affecting all health-related industries, including health care providers, pharmaceuticals, health and life sciences and payers. The Institute is part of PricewaterhouseCoopers' larger initiative for the health-related industries that brings together expertise and allows collaboration across all sectors in the health continuum.

About PricewaterhouseCoopers Health Industries Group

Committed to the transformation of healthcare through innovation, collaboration and thought leadership, PricewaterhouseCoopers Health Industries Group (www.pwc.com/healthindustries) offers industry and technical expertise across all health-related industries, including providers and payers, health sciences, biotech/medical devices, pharmaceutical and employer practices.

About PricewaterhouseCoopers

PricewaterhouseCoopers provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 146,000 people in 150 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice.

"PricewaterhouseCoopers" refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.

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