Healthcare Industry Sectors

All five healthcare industry sectors contribute to better patient. 

• Providers
• Payers
• Pharmaceuticals
• MedTech
• Public Sector health

Who Are the Providers?

• Providers include the people who take care of patients and the facilities where patients are cared for. People providers are who you think they are—doctors, nurses, physical therapists, and other clinical staff. These professionals provide preventive, curative, or rehabilitative healthcare services.
• Provider facilities are things like hospitals, clinics, and skilled nursing facilities.

Who Are the Payers?

In healthcare, a payer is an entity responsible for covering the cost of medical services provided to patients by healthcare professionals (known as providers). They are the ones who pay bills for healthcare. Payers call their customers “members”. Payers do the following tasks.

• Offer health plans/coverage
• Collect premiums – They receive money from individuals, employers, or government sources to fund these plans.
• Process claims- When a patient receives care, the provider sends a claim to the payer, and then reviews and processes.
•  Engage members in wellness and care management programs.

Type of Payer-

• Major National Plans
• Regional and Local Plans
• Provider-Led Plans
• Government Plans

What are government payers?

Government/Public Payers- These are the programs funded by federal or state government to provide healthcare coverage to specific populations:

• Medicare - Primarily for individuals 65 and older and certain younger people with disability or end-stage renal disease
• Medicaid – Provides health coverage to low-income individuals and families and those with certain disabilities. It's jointly funded by the federal and state.
• CHIP (Children’s Health Insurance Program) – Provides low-cost health coverage to children in families who earn too much to qualify for Medicaid but cannot afford private insurance.
• TRICARE- Primarily for active-duty and retired uniformed officers and their families.
• Veterans Health Administration (VA)- Provides coverage to eligible veterans.

Who are the Pharmaceuticals?

Pharmaceutical manufacturers belong to a sector of the healthcare industry known as life sciences. In general, life sciences focus on research and manufacturing of drugs and devices used in healthcare. Life sciences include biotechnology experts, medical device developers, and pharmaceutical manufacturers.

A drug, also called a medication, goes through a long lifecycle before it gets on the market. Here are the stages it travels

1. Research and Development (R&D): Research is the scientific investigative undertaking that results in the discovery of a new drug. Development is when these findings are used to produce the drug, which is then tested in clinical trials.
2. Clinical trials: Carefully conducted clinical trials are performed on volunteers to determine if a treatment works, is safe, and is more effective than an existing treatment.
3. Regulatory review: In the US, findings from clinical trials are submitted for review by the Food and Drug Administration (FDA) to approve or deny the drug for sale.
4. Commercial marketing and sales: A new drug launches on the market with marketing campaigns targeted to physicians and patients, while pharma sales reps educate physicians on the new drug and how to prescribe it.

Pharmaceutical Products- If we were to list all the drugs on the market today, we’d need a while, because there are thousands! Instead, let’s talk about the different drug classifications. 

• Generic Vs Brand Name
• Brand Name Drugs -These are original drugs developed, tested, and marketed by pharmaceutical companies under a specific trade name. Example: Tylenol is a Brand name that has the Active Ingredient (Generic Name): Acetaminophen. Protected by patents for several years, meaning no other company can sell the same drug under a different name.
• Generic Drugs-These are copies of brand name drugs with the same active ingredients, strength, dosage form, and route of administration. Approval: Approved by regulatory bodies (like the FDA) only after the patent of the brand drug expires.
• Small Molecule Vs Biologic
• Small-molecule drugs are those manufactured in a lab by mixing different chemicals until the right compound is formed. Small-molecule drugs treat common conditions like infections, high blood pressure, diabetes, and high cholesterol. 
• Biologics, on the other hand, are much more complex. They’re discovered and manufactured in living organisms, like plant and animal cells. They’re used for conditions like cancer, multiple sclerosis (MS), and hepatitis C. There’s more to know, but that’s it for now.

Pharmaceutical Customers-There are four main customers in the pharma sector.

• Physicians prescribe the drugs to patients.
• Payers pay for most of the prescription cost—the patient pays the other portion in the form of a co-pay.
• Patients take the drugs or receive the treatments.
• Distributors store and distribute the drugs.

Who is the MedTech?

Medical devices and technology (MedTech) fits into the life sciences sector of the healthcare industry. Life sciences focus on the research and manufacturing of drugs and devices used in healthcare.

MedTech produces the familiar and the futuristic. MedTech companies include those that manufacture devices, like bandages or robotics, and those that provide services, like software to translate x-rays into images.

MedTech Customers

Many of the healthcare sectors serve the same customers, so you may be familiar with this list. Medtech customers include: 

• Payers
• Providers
• Patients
• Distributors

Who is Public Sector Health?

The public sector health system refers to healthcare services provided, funded, or regulated by the government. It aims to ensure affordable, accessible, and equitable healthcare for all citizens, especially the poor and vulnerable.