S&P: 7 healthcare trends to watch in 2020

Healthcare leaders should keep tabs on several trends next year, including a continued threat of industry disruption, deterioration of credit ratings, and mergers among payers that will pressure pricing, according to a new report from S&P Global Ratings

Seven key trends:

1. Changes in healthcare may speed up. Heading into an election year with healthcare as a top, hot-button issue, S&P expects policies could result in a faster pace of change within the industry. 

2. Industry disruption will continue. Insurers will continue to look for ways to save money, placing pressure on providers and drugmakers. Ongoing investment in the sector may also lead to new ventures and new business models. 

3. Rating deterioration will continue. Credit rating downgrades have outpaced upgrades so far this year, and S&P expects that trend to continue in 2020. The rating agency blamed more pressures to cut care costs and more debt from mergers and acquisitions for the rating deterioration.

4. Mergers among payers and other players will pressure pricing. Two major mergers in the insurance realm — CVS-Aetna and Cigna-Express Scripts — were finalized in 2019. S&P expects that if they succeed in cutting healthcare costs, other payers will follow suit and put more pressure on healthcare organizations to cut prices.

5. M&A activity in the healthcare industry will remain elevated. Across the board in the healthcare sector, S&P expects M&A activity to remain high as "service providers seek to expand their offerings and size and scale, and pharmaceutical companies look to deepen their pipelines and diversify their portfolios in response to ongoing disruption in the industry."

6. Opioid litigation settlements will accelerate. Opioid settlement discussions will pick up the pace in 2020 as more trial dates near, placing pressure on pharmaceutical companies, wholesalers and pharmacy chains. 

7. Medical devicemakers will see a stable 2020. Relative to other providers and pharmaceutical companies, devicemakers will see a stable 2020, S&P predicts.

More articles on leadership and management:

Catholic Health to cut 200 positions
Words of appreciation: Thank-you notes from 15 health system CEOs
'Medicare for All' support wanes when voters hear trade-offs

Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Whitepapers

Featured Webinars