Sunday, November 8, 2009

Butterfly effect of American Healthcare Reform

The fact that American Healthcare industry is going through a massive transformation is being closely being watched by most Americans. Last night’s “historic vote” on healthcare by the US House of representatives is just one step in the transformation sweeping across healthcare. More important is the impact of this on the global healthcare industry and the butterfly effect on the global economy. Just a few interesting s snippets why the debate on healthcare is so closely watched

  • In the US alone, about 580000 establishments make up the health care industry. As per the US Bureau of labor, “As the largest industry in 2006, health care provided 14 million jobs—13.6 million jobs for wage and salary workers and about 438,000 jobs for the self-employed. . . . Health care will generate 3 million new wage and salary jobs between 2006 and 2016, more than any other industry.”
  • Implication: Healthcare reform = impact on jobs
  • Per themedica.comThe United States of America has one of the largest medical and healthcare industries in the world, followed by Switzerland and Germany. The USA's medical industry comprises of more than 750,000 physicians and 5,200 hospitals. USA witnesses approximately 3.8 million inpatient visits and 20 million outpatients visit on a daily basis. Furthermore, the United States of America has the largest workforce i.e. one in every 11 US residents employed in the health care business.
  • Implication: Healthcare reform = Large lobbying interest. Some want change that can help them, some don't want to change the status quo.
  • The sheer size of the reform is mind boggling: House health bill totals $1.2 trillion
  • Implication: Imagine the proverbial 700 pound gorilla charging ahead and you want to change course!
  • The Global prescription drug market was $550 billion in the year 2006. Also, the total health care expenditures across the world were $4.5 trillion last year. Of which, US solely account for $ 2.2 trillion, $ 2 trillion in OECD countries and remaining $ 0.3 in other countries of the world. Indian drugmakers including Dr. Reddy’s, Ranbaxy etc have made inroads into the global generic drug industry and are also watching the reform closely.
  • Implication: Healthcare reform = Impact on globalization!

I like the way BioPharma Today blogs about this "The legislation wending its way through Congress is the center of the political process, but regardless of the outcome for Obamacare 2009, change is inevitable. The scale and timing will depend heavily on the legislation—and, whatever is enacted, the implications (intended or otherwise) will take years to untangle."

As a technologist, I am fascinated by the Technology Lead changes coming down the pipe, especially the opportunities for automation, integration and system changes.

Implication: Healthcare reform (or not!) = Impact on software industry is not hard to fathom. However, seeing the forest for trees and translating them into opportunities that can impact me? I guess, there is a million dollar question hidden here.


  1. Thanks to mohon babu for the post,where we know
    the revolution in US healthcare by butterfly effect.huge economical improvement in jobs as-well-as in drug market.

  2. Nicely put Mohan. Health care reform sure has been an acid test for Mr Obama. And the president has shown some mettle by making some bold moves.
    Like you rightly pointed, to such a gigantic Industry, the number of Interest groups are definitely huge.
    And it ought to have implications technologically. Not simply does every I.T company have verticals on the Health care Industry. :)

  3. Anamika
    Thanks for agreeing

    You hit the nail on the head. I.T companies are certainly watching the vertical more closely; but are they seeing the forest for the trees? ;-)