McKinsey Reports

Hospitals face penalties for high rates of readmitted patients, doctors will be rewarded for forming practices that focus on better care, and big drug companies could lose sales as effectiveness of their big brand-name products are tested.

Those are three things McKinsey & Co. predicts as a result of health reform, the New Republic reports today. In his blog, The Treatment, Jonathan Cohn cites a leaked document from the powerhouse consultant. The 44-slide PowerPoint presentation was drafted as a broad overview for the consulting firm's clients. In place of a name, the draft document refers to "Client X."

While reform has a way to go before there's a final bill, McKinsey is providing a best-guess scenario in its report produced sometime in August. While no one knows what a final reform measure will look like, McKinsey noted provisions it felt were sure to be included in a final package, according to Cohn.

Hospitals face “intensified focus on performance measurement and improvement,” and “Big Pharma faces the largest potential revenue risk,” Cohn says, quoting the document.

Studies that compare effectiveness of drugs are certain to lower sales of some products for pharmaceutical companies, Cohn writes.

McKinsey suggests drug companies can bounce back “by focusing on ‘productive’ innovation (supported by strong evidence), collaborating with payers and providers in new ways, and revamping commercial and R&D models to significantly improve effectiveness and efficiency,” Cohn writes.

The bottom line is that health care companies will survive after reform. They'll just have to make adjustments.

"There are opportunities for leading players (like Client X) to get out ahead and thrive in a more dramatically changed U.S. health care environment," the report says.