South Carolina’s Health Care Sector at a ‘Watershed Moment’
The South Carolina health care sector is confronting a watershed moment, as industry leaders grapple with the challenging landscape of affordability, consumer behavior, and systemic flaws. At the heart of the discussion is the question of whether current practices and systems are providing affordable and adequate health care to Americans in South Carolina.
Innate Challenges for Health Care Affordability
Thornton Kirby, CEO of the South Carolina Hospital Association, identified three critical challenges during a panel discussion at the 2024 SCbio conference. Firstly, unlike most consumer services or products, people do not necessarily price shop when it comes to health care. The primary focus is often on the best possible care rather than the cheapest treatment option.
Secondly, most Americans desire top-quality health care but wish someone else to bear the cost. Furthermore, they often resist behavioral changes that could positively impact their health and thereby reduce health care expenses. Lastly, the overall health status of Americans is deteriorating, thereby increasing the volume of health care consumed.
System Flaws and Impacts
John Stanford, co-founder of Small Business Roundtable and executive director of venture capital advocacy group Incubate, emphasized the importance of understanding the U.S health care system’s strengths and weaknesses. He stressed that we should not allow short-term incentives or flawed policies to guide the system.
In 2024, Congress passed the Inflation Reduction Act, aimed at reducing the prices of prescription drugs contributing to increased health care costs for millions of Americans. However, embedded in the policy are certain provisions favoring biologics over small molecule drugs that can impact drug development direction and even patient care costs.
Effects on the Health Care System
As well as reviewing systemic flaws, the panel discussion noted that hospitals are experiencing an upshot of non-value-add care, increasing the financial strain on the overall system. Compounding the issue is the rise of high deductible health care plans since the introduction of the Affordable Care Act, leading to situations where health insurance doesn’t effectively serve as a safety net for many families.
In addition, Stanford contends that the focus on reducing patient costs has inadvertently placed an insurmountable financial burden on patients who can least afford it. He advocates for a reexamination of the entire structure of the health insurance system to ensure its function as a societal safety net.
A Watershed Moment
Patrick Plues, Vice President of State Government Affairs at the Biotechnology Innovation Organization, aligns with Stanford’s views. Describing the current state as a watershed moment for the industry, he raised concerns over emerging constraints on investment, growing pressure for more with less, and an impending harsher environment for small molecule companies and drug development.
The South Carolina health care industry is undoubtedly bracing itself for challenging times ahead. Driven by complex issues such as affordability, systemic flaws, and changing consumer behavior, it faces a crucial moment of decision-making and potential reform.
