Only 30 percent of executives representing the health care industry in the United States say their companies are ready for reform and changing economic conditions, according to a McKinsey survey on how prepared industry players—payers, providers, and pharmaceutical companies—are for change.¹ However, 76 percent say the impact of reform on the industry will be significant, and 54 percent say the same about the effects of the current economic crisis.

The survey asked executives where their innovation efforts are focused, which areas are likely to provide the greatest benefit to their companies in the near term, how the importance of innovation has changed within respondents’ companies since the financial crisis erupted, and how ready they are to adapt to ongoing reform and the new economic environment.

The minority of companies whose executives say they are ready to adapt have a different strategic focus than the others. Their top priority is to increase the value of health care by, for example, reducing the misuse, underuse, and overuse of care or increasing the quality of care received. In contrast, at most companies, the top priority is increasing revenue or membership growth. Also, companies prepared for change innovate differently: they can count on leadership’s support, for example, and drive innovation in a wider range of areas, including product design, customer service, and IT.