Insights

Global Healthcare Leaders Study: 2017

May 15 2017

 

Global Healthcare Leadership Study: 2017

 

Healthcare pricing pressure is driving innovation in both science and new business models, with a high potential to transform the industry, according to Lazard’s Global Healthcare Leaders Study.

The Global Healthcare Leaders Study revealed surprisingly strong sentiment that the industry is being transformed by the development of value-based care business models, which would displace traditional fee-for-service pricing. These new business models are a response to the intense pricing pressure that is challenging healthcare companies across sectors and geographies. 

The study surveyed C-level executives and investors in the U.S. and Europe across three sectors: Pharmaceuticals and Biotech; Medical Devices/Technology and Diagnostics; and Healthcare Services.

Highlights from the study include:

    • Non-traditional pricing models may transform healthcare more than science over the next decade: almost half (47%) of healthcare C-level executives cite the adoption of value-based or risk-sharing pricing models as transformative over the next 5-10 years, compared to 38% who cite scientific breakthroughs.
    • The survey results suggest strongly that the move to value-based care in the U.S. will take place even under a new administration in Washington. Among U.S. healthcare executives surveyed after last year’s Presidential election, 55% said they expect the majority of U.S. healthcare payments will be value-based before 2020.
    • Almost one-third of respondents in medical devices/tech/diagnostics and in healthcare services believe that non-traditional competitors will have a transformative impact on the industry in the next three to five years.
    • Healthcare executives most frequently cited M&A, industry partnerships and collaborations, including with non-traditional competitors, as enabling the transformation of the industry over the next 5-10 years.
    • More than half of respondents expected an increase in acquisitions of public companies over the next 18 months, and more than two-thirds expected an increase in private company acquisitions.

 

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