trendtage gesundheit luzern

Competition in health care: an international comparison

Trendtage Gesundheit Luzern

Luzerne, 18-19 March 2015

Agenda

► Global health care market

► Country comparisons

► Socioeconomic and demographic factors

► Health care market dynamics

► Health care capacity and infrastructure

► Public health and other factors

► G20 country examples

► EY credentials

Global health care market

Health care is in the middle of a perfect storm

Cost containment

initiatives

1.5 billion over-65s

by 2050

€700 billion spent on

chronic disease in EU

Unsustainable growth in health care spending

14% of GDP by 2060, up from 6.2% in the ‘00s

Health care reforms Pricing pressures on

the industry

Changing demographics Unmet needs

Social

media

Medtechs HIT Co

Pharmacies

Payers Life

sciences

Telcos Consumer

electronics Retailers Food Co

Providers

Employers Information

companies

Distributors

How are different health care stakeholders responding to this shift?

By forming a new health

ecosystem, with the patient

at the centre

Families &

friends

Social

media

companies

HIT

companies

Payers Medical

technology

companies

Telecom

companies

Employers

Pharmacies

Life

sciences

Consumer

electronics Retailers

Food

companies

Providers

Information

companies

Self-managed

patient

► Social support

► Community

engagement

► Patient data

► Financing

► Risk sharing ► Remote

care

► Diagnostics

► Connectivity

► Counseling

► Drugs

► Efficacy insights

► Behavioral

change ► Access ► Nutrition

► Functional Foods

► Health literacy

► Medical

expertise

The pace of change is accelerating

3-5 years ago Today 3-5 years from now

Early debate, uncertainty

about move to value

Sweeping reforms in US,

Germany, France, UK,

others all based on value

“Pay for performance”

and specialty drug

prices put pressure on

drug cost increases

Most people had never

heard of “big data”

Growing number of

analytics initiatives with

large amounts of diverse

data

Real-world data,

prescriptive analytics:

less ability for pharma’s

to control the message

Wearable technologies

were novelties

Increasingly common;

Unobtrusive, non-

invasive; payers starting

to pay

Drugs increasingly

compete with non-drug

interventions

Much data (on cost,

quality, relationships,

clinical trials etc.) was

opaque

Transparency (apps,

govt. initiatives, industry

responses)

Transparency

scrutiny, pressure.

Trust is a source of

competitive advantage

Country comparisons

Socioeconomic and demographic factors

Urbanization

(WHO)

68% of the population is living in

urban areas

74% of population is living in urban

areas

85% of population Is living in urban

areas


areas

80%

of population is living in urban

areas, which is expected to

increase to 83% in 2030


areas

GDP/capita

(World Bank)

USD50,547

GDP/Capita is higher than

average in comparison to

other countries

USD46,269

GDP/Capita is above


other European countries

USD60,430

GDP/Capita is higher than


other countries

USD84,815

High GDP/Capita, when

compared to most developed

markets

USD41,787

GDP/Capita is on the lower

side in comparison to other

European countries

USD53,042

GDP/Capita is on the higher

side when compared to most

developed markets

Literacy rate

(CIA Fact Book)

98% Literacy rate is at par with

most of the developed

countries



countries



countries



countries



countries



countries

Aging population

(WHO)

24% of population is over 60 years

old


old


old


old

23%,

of population is over 60 years

old


old

United States United Kingdom Austria Sweden Switzerland Germany

Health care market dynamics

NHE/GDP

(WHO)

11.3% Total health expenditures as a

percentage of gross domestic

product

11.3% Total health expenditures as

a percentage of gross

domestic product



product



product



product



product is the highest of any

nation

Per capita total health

expenditures

(OECD)

USD4,110 (PPP)

USD4,039 (PPP)

USD3,447 (PPP)

USD5,104 (PPP)

USD2,761 (PPP)

USD7,662 (PPP)

Health insurance coverage

(OECD)

98.7% social health insurance,

compulsory for all or almost all

of the population and financed

through income-related social

contributions, though these are

often supplemented out of

general tax-financed

government revenues

99.6% social health insurance,

compulsory for all or almost all

of the population and financed

through income-related social

contributions, though these are

often supplemented out of

general tax-financed

government revenues

100% Automatic health coverage is

provided to the entire

population and financed from

taxes

100% social health insurance,

compulsory for all, but not

entirely financed through

income-related contributions.

Individuals pay community-

rated premiums to

competing private health

insurance funds that are not

allowed to deny coverage to

applicants.

100% Automatic health coverage is

provided to the entire

population and financed from

taxes

84.9% health insurance coverage,

covered by employer-

sponsored health insurance,

Medicaid, Medicare, direct

purchase insurance and

military programs

Source of insurance

(OECD)


Public 32% Employer &

Private 53% Public 100%

Private 11% Uninsured

15%

Public 89% Public 100% Public 100% Public 100%

Health care capacity and infrastructure

Physicians/ population

(OECD and WHO)

5 physicians per 1,000

population


population


population


population


population


population

Hospital beds/ population

(WHO)

76 beds per 10,000 population






Cellular phones

(WHO)

161 cellular phone subscribers

(per 100 population)











Internet users

(World Bank)

81 (per 100 people)

84 (per 100 people)

95 (per 100 people)

87 (per 100 people)

90 (per 100 people)

84 (per 100 people)

HC reform USD3.8b

Expected savings by 2016

from health care reform bill

USD11b Annual savings expected from

health reforms and AMNOG

act

Health care system is in a

state of flux as a result of the

implementation of a)

liberalization of the previously

state-monopolized pharmacy

system in 2009 with

pharmaceutical price cuts and

b) ongoing discussions around

value-based pricing reform.

Swiss voters rejected a plan

for a seismic shift from the

country's all-private health

insurance system to a state-

run scheme in order to reign in

soaring increases in premium

costs.

USD32b expected savings from NHS

Health and Social Care Bill

(2012-2014)

USD100b expected savings in 10 years

(starting 2013) from health

care reform


Public health and other factors

Obesity

(WHO)

19% of males

17% of females Adults aged ≥20 years who

are obese

23% of males


are obese

18% of males


are obese

18% of males


are obese

24% of males


are obese

30% of males


are obese

Smokers

(WHO)

46% of males

47% of females Prevalence of smoking any

tobacco product among adults

aged ≥15 years

35% of males



aged ≥15 years

25% of males



aged ≥15 years

31% of males



aged ≥15 years

22% of males



aged ≥15 years

2012 data not available

Hypertension

(WHO)

29% of males

20% of females Prevalence of raised blood

pressure

(≥ 25 years)

31% of males


pressure

(≥ 25 years)

30% of males


pressure

(≥ 25 years)

27% of males


pressure

(≥ 25 years)

28% of males


pressure

(≥ 25 years)

17% of males


pressure

(≥ 25 years)

Diabetes

(WHO)

7% of males

5% of females Prevalence of raised fasting

blood glucose

(≥ 25 years)

10% of males


blood glucose

(≥ 25 years)

8% of males


blood glucose

(≥ 25 years)

10% of males


blood glucose

(≥ 25 years)

8% of males


blood glucose

(≥ 25 years)

13% of males


blood glucose

(≥ 25 years)

Dementia

(OECD and CDC)

7% Prevalence of dementia,

population aged 60 years and

over which is about average

for EU28 countries



over which is the average for

EU28 countries




for EU28 countries




for EU28 countries



over which is the average for

EU28 countries

5m living with Alzheimer’s

disease.

By 2050, expected to grow to

14m


Key observations of country comparisons

Indicator Description EU average

GDP/ capita All countries are higher than the EU28’s average, but in this class, Switzerland has the highest GDP per

capita at USD84,815. USD25,037

NHE/ capita The US spends the most on national health care per capita at USD7,662 (PPP). USD2,193 (PPP)

NHE/ GDP There is a strong relationship between the overall income level of a country and how much the country spends

on health. The US has the highest at $8,467 (PPP int.$). USD2,452 (PPP)

Doctors/ 1,000

population

There continues to be concerns in many European countries about current or future possible shortages of

doctors, especially in certain medical specialties (e.g., primary care doctors) or in rural areas due to the ageing

of the medical workforce. Austria has the highest number of doctors at 5 per 1,000 people which is above the

EU average. 3.4

Obesity rate

Obesity is associated with higher risks of chronic illnesses and it is linked to significant additional health care

costs. The US has the highest rate of obesity for both sexes while Switzerland has the lowest. 16.7%

Dementia

The direct costs of dementia account for a significant share of total health expenditure in European countries.

The prevalence of dementia in the population age 60 or older in Austria, Germany, Sweden, Switzerland

and the UK is at 7% which matches the EU average. 7%

Cellphone

subscribers

Telemedicine can help to control health care costs so countries with a high population of cellular phone

subscribers are positioned for success in implementing technology such as mobile applications. Austria has

the highest number of cellular phone subscribers at 161 per 100 population. Data not available

Internet users

eHealth can help to control health care costs and improve quality of care. Countries with a high population of

Internet subscribers are positioned for success in implementing technology for the purpose. Sweden has the

highest number of Internet users at 95 per 100 people. Data not available

G20 country examples

Examples of initiatives to substantially bend the curve of high health care spending

and bring in efficiency

Issues/

Challenges What can be adopted from other nation’s best practices?

High health

care

expenditure

UK

► NHS budgets sets a capped overall budget for local purchasers.

UK &

France

► Both countries are increasing spend on preventative health to achieve concomitant long-term savings

► Both countries recently announced cost-saving telehealth deployment projects

Japan

► High cost of technology is an increasing burden. As result, the government required Hitachi and Toshiba to

produce less expensive, but equally effective scanners.

Providing

universal

coverage

Netherlands

► Universal coverage attained through a mandate that every individual purchase a basic insurance plan.

► Risk equalization systems reduce incentives for insurers to seek healthier enrolees, enabling redistribution of

funds among insurers on the basis population need.

Inefficient/

duplicative

resources

UK

► NHS Health and Social Care Act 2012 sets out a large-scale program to decentralize NHS operations

► Reviewing and constantly changing quality standards through establishment of NHS Evidence

Some developed nations are financing home-care and preventive health to reduce pressures from ageing population and the chronic disease burden

Issues/

Challenges What are some of the G20 countries doing to reduce demographic crisis?

Rapidly

ageing

population

France

Increased investment in long term care and financing home-care services entirely by SHI (statutory health insurance)

managed by CSNA (National Solidarity Fund for Autonomy)

Japan

► Introducing nursing care robotics

► Launched Long-Term Care Insurance System (LTCI) for the elderly in 2000

► Covering home-based care and accrediting home care providers (one of the few OECD countries to do so)

Increasing

chronic

disease

burden

France

► Applying health IT, e.g., SOPHIA experiment, a call centre dedicated to diabetes prevention and operated by SHI

► Final targets of quality indicators for GPs includes improving prevention of contraindicated drug

combinations, which can result in adverse reactions in people >65 years. The objective is to reduce prescriptions of

vasodilators to <7% of patients and of benzodiazepine (potentially dangerous and addictive) to >5%

Australia

Established Australian National Preventive Health Agency, in January 2011, to develop strategic partnerships

across all sectors, to provide technical advice and assistance, and to promote health and reduce health disparities

Europe – Examples of e-Health Initiatives

Spain

Since 2009: Sanidad en Linéa program Investment of €196 million to support projects, such as digital medical

records, ePrescribing, the doctor’s appointment system

United Kingdom

Since 2011: “eHealth Strategy 2011-2017” launched 3 million lives (3ML) campaign – use of telecare and telehealth

technology for improving the lives of at least three million people over

the next five years; expected to save GBP1.2bn a year.

Germany

Since 2010: National eHealth Initiative

launched Use of electronic health card and telematics

infrastructure; for 2014 Health Minister has

announced eHealth law

France

Since 2010: Development Plan for the Digital

Economy In 2010, France invested EUR 3 m for telematic projects;

reimbursement of telemedicine services is at the same

levels as those for in-person visits

Europe

Since 2012: Launch of eHealth Action Plan 2012-

2020 Roadmap to empower patients and healthcare workers, to link

up devices and technologies, and to invest in research towards

the personalised medicine of the future

Italy

Since 2012: Launch of eGov2012 action

plan eHealth with a budget allocation of EUR329

million is included as a key pillar

Mega trends…

Industrialization of hospitals

• Standardization of clinical processes

• Evolution of chains

• Concentration on core business

Standardization and integration of health

insurers

Evolution of standardized IT systems

Claims management becomes key in coping

with health care complexity

Government drives health integration

• German government eHealth program

• Health reform (DRGs, GMG)

…and market opportunities Mega trends…

Large eHealth deals

• Application integration

• Large-scale service operation

Conservative business

• Hospital transformation

• CIS, SAP implementation

• BPO / ITO deals

• Health insurance transformation

• SAP platform in health insurance

• Health data management

• Integrated care

Government-led digital health integration in Germany

Continue the conversation

Progressions 2014

Navigating the payer

landscape

Beyond borders 2014

Global biotech report

Unlocking value

Pulse of the industry 2014

Medical technology report

Differentiating differentiation

Health Care industry

report

Voyage to value

Christian Egle

Partner – Health Care Advisory Lead

Ernst & Young GmbH

Tel +49 6196 996 21226

Mobile +49 160 939 21226

Email [email protected]

BACKUP

EY credentials

► EMEIA auditor market share* among the Big 4 firms

► Ranked #2 in EMEIA (Forbes Global 2000)

► Ranked #1 in 7 countries




► EY health care sector credentials

*not sector specific

Germany – Kassel

Hospital and Child

Hospital Park Schönfeld

- infrastructure, HR/

workforce productivity,

benchmarking, clinical

services redesign,

financial performance

Norway – Oslo

University Hospital –

LEAN – Clinical redesign

of the biggest Hospital in

Norway

The Netherlands –

Revaluation of home

care in the Netherlands

UK– Transaction

advisory services related

to the merger of Barts

and The London NHS

Trust (BLT), Newham

University Hospital NHS

Trust (NUHT) and

Whipps Cross University

Hospital NHS Trust

(WCUHT)

UK’s health care system is considered to be the most efficient

Pros Cons Financing Facilities Technology

►High life expectancy: 81

yrs. in 2012 (v. 79 OECD

average)

►Ranked #1 among seven

developed countries on

measures of efficiency1

►Short waiting times for

basic medical care and

non-emergency access to

services after hours

►Population ≥ 65 years old

grew from 12% in 1960 to

17% in 2012 (OECD)

►Many patients –

particularly the elderly –

over-utilize ERs rather

than preventative care

►Due to free medical

services provided to all

citizens, the public tend to

make extensive and even

excessive use of medical

services

► Health spending

declined 1.3% per year

on average in 2009-

2012 (v. the 4.7% OECD

average growth)

► Structural changes

reducing costs:

► NHS Health and Social

Care Bill reduced

admin costs by

USD31b in 2012-2014

► Increasing focus on

integrated care

► Health expenditure was

16% of total government

expenditure (v. the 14%

OECD average) in 2012

► Well-developed care-at-

home capabilities backed

by NHS funding to reduce

health care delivery costs

► In 2012, UK government

announced USD336m in

funding to provide new

homes to meet the needs

of elderly and people with

disabilities including no

stairs, adapted

bathrooms, etc.

► Increasing telehealth

investments:

► Whole System

Demonstrator (WSD)

program led to 20%

fewer emergency

admissions, 14%

fewer elective

admissions, 14%

fewer bed days and,

8% lower tariff costs

► NHS’ “3 Million

Lives” scheme

provides remote care

to 3m people (with

long-term conditions

and/or social care

needs) in 2011-2015,

with USD1.8b in

savings expected

annually

1 Commonwealth Fund, 2010

Australia is considered second most efficient system owing to its focus on preventive care and discouraging use of non-value added services


► Ranked #2 among seven

developed countries on

health system performance

based on measures of

efficiency*

► Government policies to bring

in efficiency to health care

system

► Initiatives encouraging cost-

savings:

► Skin cancers prevention

program, Sun Smart,

returned USD3.60 for

every dollar

► USD20m spent on a

national food

reformulation campaign

to reduce salt intake

saved expenditure of

USUSD1.5b on

antihypertensive drugs

► Policy changes in

hospital bills

reimbursement:

According to “national

efficient price”, events as

a result of mistakes or

negligence of hospital are

not reimbursed

► Accessibility of health care

facilities, especially in rural

and regional areas, needs to

be improved.

► Number of health care

professionals needs to be

increased.

► More effective utilization of

resources can prevent

wastage which swells the

cost. According to the

Productivity Commission

some public hospitals can

save more than 20% by

incorporating best practices.

► Government invested

USD31.2m in telehealth in

2013.

► Surge in home-care clients

seen from 2010–11:

► 26% increase in Extended

Aged Care at Home

clients

► 23% increase in Extended

Aged Care at Home

Dementia

► Home care services need to

mature so that it can help to

reduce hospital burden and

health care costs.

► Government aggressively

promoting home care via

various e-health solutions

* Commonwealth Fund, 2010

US has least efficient system despite highest health care spending per capita


► US has high screening

coverage and survival rates

for breast cancer among

OECD countries

► Quality of acute care in US

hospitals is generally good

► Proportion of adults who

smoke daily has been cut by

more than half over the past

thirty years, from 33.5% in

1980 to 14.8% in 2011.

► Life expectancy: 79 years

(OECD average=79 years)

► Underdeveloped primary care

sector: costly hospital

admissions, shortage of

doctors. In 2012 US had 2

physicians per 1,000 population

(OECD average=3 physicians)

► Highest obesity rates among

adults, 37% in 2011 (OECD

average=23%)

► US health care system

provides uneven care at high

price due to many

inefficiencies and duplications

► Cost-saving initiatives in 2010

Affordable Care Act:

► Partnership for Patients

program is a PPP that aims

to reduce hospital

complications and improve

care transitions in more

than 3,700 hospitals and

partnering community-

based clinical organizations.

Result: decline in hospital

readmission rate

► Medicare Shared Savings

Program: providers deliver

care through accountable

care organizations

(ACOs)— more than 4

million beneficiaries receive

care from more than 250

ACOs

► Comprehensive Primary

Care (CPC) initiative:

rewards high-quality

providers who reduce

health care costs through

investments in care

coordination. About 500

primary care practices were

participating in the CPC

initiative.

► US lags behind other OECD

countries on provision of home

care services with high focus on

nursing homes

► While in 2011, 4% of the

population over the age of 65

received long term care in

institutions (OECD

average=4%), only 3% of this

population received care at

home (OECD average=8%)

► Regulations for home health

agencies bear some similarities

to nursing home regulations,

but are less stringent than for

nursing homes, and the

regulations have focused more

on cost and access to care than

on quality

► Mass adoption of

telemedicine is moving at a

slow pace, but is expected to

change.

► Reasons of lack of universal

adoption of telemedicine:

► Reimbursement issue

► State licensing

requirements: Doctors

currently licensed by

individual states with no

federal licensing

► Introduction of changes in

policy in 2012:

► American Telemedicine

Association’s ‘National

Health Reform

Implementation’ focuses

on opportunities to help

telemedicine transform

health care delivery in the

US. The new legislation

includes several provisions

to advance telemedicine.




► Rated in the top 10 countries

among a group of 27 low-

mortality European countries

in categories such as overall

life expectancy, infant

mortality, cardiovascular

diseases and prevalence of

obesity*

► Despite three decades of cost-

containment measures, the

debt accumulated by SHI was

estimated to be around

USD151b in 2009

► Lack of coordination between

hospital and ambulatory

services; private and public

provision of care; and health

care and public health

► Among all European

countries, France had the

second highest health care

spending at 12% of GDP in

2012

► Initiatives encouraging cost-

savings:

► In 2012, scheme

established by SHI to

encourage use of generic

drugs rather than branded

drugs. Cuts in prescription

drug costs expected to save

USD593m in 2013

► Since 2011, the drug

reimbursement rate has been

curtailed and newly diagnosed

hypertension has been

excluded from the list of fully

covered chronic diseases

► In 2009, SHI launched a

series of individual contracts

with office-based physicians

(CAPIs) that introduced pay-

per-performance

► Home-care services are

entirely financed by SHI

(statutory health insurance)

managed by CSNA (National

Solidarity Fund for Autonomy)

► Increased investing in long-term

care (including home care) for

disabled and elderly

► In 2012, France’s total long-

term care expenditures were

12% (OECD average=31%)

► In 2007, 8.1% of the people

aged over 60 were receiving

financial support for a loss of

functional autonomy; among

them, more than 60% were

receiving care in their homes,

while less than 40% were

receiving residential care.

► Increasing investment in

telemedicine adoption and

working to deploy

telemedicine on large scale in

the coming years

► In 2010, France Ministry of

Finance invested USD3.4m

for projects that develop the

use of information

technologies adapted to

medical devices that serve

patients who are housebound

because of a chronic illness

► In 2012, General Director for

Care Provision,

Mr. Selleret announced

national support for eight

projects in the field of

telemedicine

France has one of the best health care systems in terms of overall performance, but budget deficit continues to threaten country’s financial sustainability despite cost saving measures




► Smoking rate among adults

has decreased from 28.5% in

1978 to 22% in 2009, (OECD

average=21%)

► Health care spending continues

to rise despite cost-cutting

strategies

► Over-provision and over-supply

of hospital services: 240 in

1,000 patients treated in

hospital per year, exceeds

OECD average of 155 in 1,000

► Shrinking labour force due to

ageing and falling birth rates

threatens financial sustainability

► German spending on health

care comprises 11% of its

GDP in 2012 (OECD

average=9%)

► In 2010, government

announced a USD3.9b cut in

health care spending

(including reductions for

doctors, hospitals, medicine

and administration) . Expected

to generate savings of

USD6.7b

► Under 2011 AMNOG act,

manufacturers need to submit

evidence of the added benefit.

Expected savings of

approximately USD2.2b/year

► Physicians are financially

liable if they exceed regular

volumes for their patient mix

above the prescription cap

► High focus on preventive care

to produce cost savings:

various national action plans

are conducted (child health,

eating disorders, women

health etc.)

► Germany has increasingly

focused on providing long-term

care (includes home care)

► Beneficiaries in German LTC

insurance in 2009: 69% are

cared for in their own homes

and 31% are cared for in

nursing homes

► Germany spent 29% of their

health care budget on LTC

(long-term care) in 2012

► In 2010, 3.8% of the population

over the age of 65 received

long-term care in institutions

(OECD average=4%) while a

7.6% of this population

received care at home (OECD

average= 7.9%)

► In 2012, amendment to the

Long-term Care Reorientation

Act introduced benefits of care

provided in the home, e.g.,

people with disabilities who

reside primarily in institutions

will receive the full share of their

nursing allowance for days on

which they are cared for at

home

► Germany has done little in

telehealth field

► In Germany, a public health

insurance fund (TAUNUS

BKK) mainstreamed home

telehealth within dedicated

disease management

programs from 2007

► Reasons for low telehealth

adoption:

► Limited funding and

heterogeneous IT

standards in ambulatory

and hospital care

► Different data protection

and privacy regulations of

the federal and state

governments

► Doubts of physicians and

patients as well as unequal

costs and benefits for the

various persons involved in

telemedicine

Germany needs to curb its soaring health care spending by increasing efficiency, reducing hospital burden, and realizing benefits of telemedicine in providing remote care

trendtage gesundheit luzern

Documents