Implementation of the Affordable Care Act – and the uncertainty it’s bringing with it – will be the biggest headache for the healthcare industry this year, according to a new poll of industry executives.
But despite unanswered questions about how millions of newly insured Americans will affect healthcare costs, hospital volumes and the insurance industry, three-quarters of respondents in GE Capital’s survey anticipated their companies would perform stronger in 2014 than they did in 2013.
Conducted ahead of the J.P. Morgan Healthcare Conference, GE Capital’s new outlook survey reached 418 senior executives from the pharmaceutical, medical device, hospital and healthcare service sectors.
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Three-quarters of respondents said they plan to invest aggressively in their businesses over the next year, GE Capital said. M&A and a revitalization of existing offerings are their primary strategies for growth (cited by 38 percent and 36 percent of respondents, respectively). One-quarter said they would launch new segments or lines of business.
It’s good to see that optimism among executives, but not surprising to see that they’re still wary of the impact of healthcare reform. PwC’s annual list of top health industry issues predicted that many healthcare companies would need to re-evaluate their roles and business models this year in light of shifts in how healthcare is being delivered and paid for. Meanwhile, GE Capital’s respondents also reported feeling challenged by regulatory scrutiny and the U.S. economy.
Encouragingly, fewer than 10 percent of respondents acknowledged that access to funding would be a primary challenge this year. That’s consistent with a National Venture Capital Association survey from late last year that predicted higher levels of VC investment in life sciences and more acquisitions in 2014.
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