healthcare challenges and trends
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DESCRIPTIONQuality healthcare is one of the most important factors in how individuals perceive their quality of life. In some countries, such as the UK with the National Health Service (NHS), the healthcare delivery organisation is a part of their national identity.
- 1. HEALTHCARE CHALLENGES AND TRENDSThe patient at theheart of care
2. 3Quality healthcare is one of the most importantfactors in how individuals perceive their quality oflife. In most countries, alongside the economy, it isthe major political issue. In some countries, suchas the UK with the National Health Service (NHS),the healthcare delivery organisation is a part oftheir national identity.We believe it is time for a new enlightenment in every aspect of the healthcare ecosystem, whereevery player, from governments to enterprises to individuals, is involved in improving healthcare. Wewant to bring you the best of our thinking, and the best of our partners thinking. Thats why we arewriting a series of whitepapers. While we concentrate on the challenges of healthcare in the firstpaper, later into the series, well look deeper at its correlation to the pharma industry, and the needfor collaboration between the two and also at the innovative solutions we offer for better healthcare.Globally, all health economies are facing similar challenges. In addition, the advent of new consumertechnologies is introducing more challenges (or bringing older ones to the fore). These disruptivetechnologies promote greater patient power.The most agile and forward thinking health economies have the opportunity to revolutionise the waycare is delivered, and in doing so to transform their societies. This whitepaper, the first in a seriesfrom Logica, outlines the challenges we see our clients struggling with, and some of the trends wethink will impact healthcare for the better. 3. 4GLOBAL CHALLENGESThere are global challenges that will impact healthcare in the near future. These include:Rising costsSpending on healthcare almost invariably grows faster than GDP; the rate of growth of healthcarespend has exceeded that of GDP since records began. Moreover, spending and economic recessionare closely linked. We can expect to see the rate of growth of healthcare spend in Europe outstripGDP growth significantly during the current economically difficult times.Macroeconomic factors like aging populations or insufficient public funding are challenging bothreceivers and providers of healthcare. Adoption and penetration rates of clinical informationsystems vary greatly. In fact, the number (and size) of buyers varies from country to country, and isnot necessarily dependent on the size of the country but rather on the structure of the healthcaresystem. Additionally, purchasing behaviour is shifting towards more coordinated, joint purchasing.Canada JapanUnited KingdomUnited StatesOECD %18.016.014.012.010.0 8.0 6.0 4.0 2.0 0.0 1960 1965 1970 19751980 198519901995 2000 2005 2010Figure 1: Health expenditure as a share of GDP, 1960-2009, selected OECD countries, Source: OECD Health Data2011. 4. 5Changing demographicsService is in demandThere is increasing demand on the healthcare delivery organisations. And this is happening inevery country. Thanks to advances in our understanding of the causes of diseases, and consequentimprovements in diagnostic techniques and treatments, people live longer. The average lifeexpectancy in OECD countries has now reached 80 years and continues to lengthen. However, notonly are people living longer, but increasingly people are living longer with chronic disease. Life expectancy at birth, 2009 Years gained, 1960-200983.0 Japan 15.282.3 Switzerland 10.981.8Italy12.081.8Spain12.081.6 Australia 10.781.6 Israel 9.981.5Iceland 8.681.4 Sweden 8.381.0 France10.781.0 Norway 7.280.8New Zealand 9.780.7 Canada 9.480.7 Luxembourg11.380.6 Netherlands7.180.4 Austria 11.780.4 United Kingdom 9.680.3Germany11.280.3Greece 10.480.3Korea27.980.0 Belgium 10.280.0Finland11.080.0 Ireland 10.079.5 Portugal15.6 79.5 OECD11.279.0Denmark 6.679.0 Slovenia10.578.4 Chile 21.478.2United States 8.377.3 Czech Republic 6.775.8 Poland 8.075.3 Mexico17.875.0Estonia 6.575.0 Slovak Republic4.474.0 Hungary6.073.8 Turkey25.573.3China26.772.6Brazil 18.171.2Indonesia30.068.7 Russian Fed. 0.064.1 India 21.751.7 South Africa 2.6908070 60 50400 51015 20 2530 YearsYearsFigure 2: Life expectancy at birth, 2009 (or nearest year), and years gained since 1960. Source: OECD HealthData 2011; World Bank and national sources for non-OECD countries. 5. 6Filling the resource gapEven as demand increases, there is a global shortage of clinicians. Countries with the highestnumber of clinicians per population will need to address graduate intake in to medical schools, whichis falling in real terms in many countries. The challenge isnt limited to doctors either, as enrolment innursing colleges has also fallen in some countries. Ireland 52.8Austria51.4Chile47.4Korea45.5Denmark42.9 Turkey42.9Finland37.8Australia37.3 Netherlands 36.4 Czech Republic35.3 United Kingdom34.5Germany34.3Poland 33.7 Slovak Republic 33.0Slovenia 33.0OECD 32.5Iceland31.7New Zealand30.3Hungary29.8 Canada29.7Portugal 28.3 Sweden27.5 Estonia 27.4 Italy 27.1Japan27.0 Belgium 26.9 United States 26.7 Norway26.6Greece 25.7 Switzerland 24.1 Spain 23.9 France18.2 Israel11.6 0 10 2030 4050 60Per 1,000 physiciansFigure 3: Medical graduates per 1,000 physicians, 2009 (or nearest year). Source: OECD Health Data 2011.Arguably, a storm is brewing in France, where the number of doctors over 55 is amongst the highestin the OECD. Combined with an overall reduction in the number of graduates emerging frommedical school, France may well see the number of doctors leaving the profession exceeding thoseentering. It is generally the case that a skills shortage increases costs (or reduces service quality)so a well run health system makes sure staff are properly equipped and doing the right tasks fortheir skills and training. This presents an ethical challenge, as European states seek to fill the gap byrecruiting doctors and nurses from other countries, thus depriving those societies of their healthcareprofessionals. 6. 7Easy accessThe graph shows the distribution of hospital sizes. As demand and spending increase, healtheconomies will increasingly need to balance ease of access to their services against the cost ofoperating smaller hospitals. For many countries, the rationalisation of the healthcare system meansthe closure of small regional hospitals, which becomes a politically-charged issue. This rationalisationalso has to take into account the increasing specialisation of tertiary hospitals, which we address later. 100% 90% 80% 70% 60% 50% 40%1-100 beds 30%101-250 beds 20%251-750 beds 10% 0% >750 bedsDenmarkFinlandFrance PortugalSweden Netherlands United KingdomCzech Republic Estonia Germany NorwayPoland SlovakiaSpainSwitzerland Total no.2452 3713128 123 298 366156920919 hospitals5156 26 50 21naFigure 4: Share of hospitals by number of beds. Source: Nordic Healthcare GroupFocus on qualityWhat patients expect is changingThe quality of care is increasingly important as patients begin to exercise their right to choose howand with whom they engage for their healthcare. They demand transparency of data and processes.As a consequence, healthcare organisations will need to focus on how quality outcomes can bepublished in a meaningful way for patients. Patient safety is the major focus of patient advocacygroups and healthcare leaders. They will enforce deeper investigations of medication errors, hospitalacquired infections, wrong site surgery or pressure sores, like never before.Becoming customer-drivenWhere the patient needs to be - at the heart of careTo address the needs of the expert patient, and to start the transition of healthcare to a demanddriven model, some of the worlds leading hospitals are placing the patient firmly at the centre ofeverything they do. For example, the Cleveland Clinic in Ohio has a clear mission to improve thepatient experience, and has a board-level Chief Experience Officer leading the Office of the PatientExperience. According to their website, the mission is to ensure care is consistently patient-centredby partnering with caregivers to exceed the expectations of patients and their families. ClevelandClinic, along with a handful of other pioneering hospitals, has always been a bellwether in patientcare, and it will be interesting to see how many European hospitals make similar arrangements. 7. 8Global healthcare trendsMove from being supply driven towards a demand driven consumer modelAs a society, we are changing rapidly, and this is apparent in the relationship between care providersand the citizen. Patients are increasingly becoming stakeholders in their own care journeys; theydemand transparency in access and information about their care and importantly, about the qualityof service provided. Universal access is the basis of virtually all socialised healthcare economies. Butcitizens are now demanding access on their terms. They want to schedule appointments when andwhere it suits them, not the provider. They want the latest drugs or clinical trials; and of course, anend to surgical waiting lists. Or they want to be given the option to go private without incurring apersonal cost.The internet is changing citizen behaviour. This means the way governments interact with theircitizens has to change too. Municipalities are providing more services to the citizen using technology.We will see healthcare providers do the same - adopt technological solutions to streamline processessuch as setting up virtual appointments with doctors or looking up lab results online.Healthcare is the last of the major supply driven industries. It will not be so for long. It will be thecitizen that demands the transition to an industry that answers their needs, fears and aspirations.Informed patients and the rise of social mediaPatients are becoming more and more involved in their healthcare, with a higher stake in the journeythan before.Patients are simply better informed than ever before. Information about medical conditions andtreatments are now easily available on the Internet. This has to som