The Future of Health in Europe

About this report

This report explores six pivotal questions relating to this transition to the future of health in Europe:

1. What is the envisioned state of European healthcare by 2040?
2. How might the shift to the future of health redistribute healthcare costs?
3. What implications might this healthcare transformation hold for incumbent business models?
4. What are the principal catalysts for such a shift?
5. How will the European healthcare system evolve for all stakeholders
6. Where do European nations stand when it comes to transitioning towards this model, and what should be their primary focus?

The future of health in 2040

Europe is facing substantial challenges in continuing to deliver high-quality healthcare services to its citizens. Ageing populations, cultural shifts, rigid and complex financing models, increasing costs of innovation, a scarcity of skilled personnel, rising health inequalities and health complexities stemming from climate change are threatening the sustainability and affordability of healthcare services, and adversely affecting citizens’ health and productivity. To ensure citizens’ future health and well-being, Europe will need to chart a new, cost-effective and sustainable approach to healthcare.

Deloitte’s Global Future of Health campaign, launched in 2017, is based on a strongly held view that emergent technologies and digital transformation, artificial intelligence (AI) and open secure platforms will enable a shift from the current reactive-treatment model to a continuous, forward-looking, proactive health management model. This shift will be focused on prevention and earlier diagnosis, aimed at sustaining well-being and improving the cost-effectiveness of healthcare. Moreover, by 2040 care will be organised around the citizen rather than around the institutions that drive the existing healthcare systems.1 These changes will affect the businesses and operating models of all stakeholders, including new non-traditional companies entering the healthcare space.

While the original future of health perspective was based predominantly on the US, the changes driving this future are also relevant to every healthcare system in Europe. With its 743 million residents spread across 44 countries, including the 27 nations within the EU, Europe is a significant player in the global economic landscape.3 Its economic stature and robust foundation in science and technology means Europe is well-poised to pioneer sustainable and innovative healthcare solutions. Considering this, we have explored how Deloitte’s global vision of the future of health could be used to chart Europe’s healthcare future.

Why Europe needs a new healthcare vision

Each European nation manages its own healthcare, resulting in a tapestry of distinct systems, each moulded by its specific cultural, economic and political environments. Healthcare financing comes primarily from three sources, namely, government schemes, social health insurance (SHI) and private health insurance (PHI). Some countries, like the Nordics and the UK, predominantly operate on a single-payer system. Comparatively, Germany, Switzerland and the Netherlands have systems of competing insurers, whereas out-of-pocket payments are the dominant source of finance in most Eastern European countries.4

Health spending is primarily dictated by political decisions and correlates with each country’s economic size (GDP). While nations aspire for universal health coverage (UHC), the range of services offered and cost-sharing varies substantially. For instance, the average European healthcare expenditure as a share of GDP was 8.8 per cent in 2019. However, the range was quite wide, from 11.7 per cent in Germany to less than 5.5 per cent in Romania. There is also a three-fold difference in average health expenditure per capita between high-spending countries in Western and Northern Europe and low-spending Eastern European countries.5

The COVID-19 pandemic caused a series of unprecedented health, economic and societal crises and compounded deep-seated structural issues that some countries managed better than others. The ensuing disruption resulted in all countries increasing healthcare spending by nearly one-third compared to 2019. The lessons emerging from the pandemic demonstrate that health is the foundation upon which resilient, productive economies and fair societies are built. They also highlight that emerging pathogens and other public health threats do not respect borders.6

Despite the differences, a unified ambition exists across European healthcare players to ensure accessibility, equity, quality and safety. While health spending is projected to continue rising, funding levels are anticipated to align more closely with the pre-pandemic growth rate of three per cent annually. Moreover, funding disparities among countries are likely to persist, albeit with a narrowing gap as consumerisation and public expectations rise and central funding from the Resilience and Recovery funds of the European Commission (EC) is targeted towards financially needy nations.7

Due to the diverse pricing and reimbursement models across countries, current access to new medicines and innovative technologies varies substantially across Europe.8 Industry experts believe these disparities make Europe less appealing for healthcare innovations, as evidenced by Europe’s declining share of pharmaceutical R&D investment, clinical trials and manufacturing outputs over the past decade.9 In response, steps like the centralised Health Technology Assessment system, slated for 2025,10 and the 2023 update of the EU pharmaceutical legislation aim to foster a more conducive environment for healthcare advancements to produce a more innovative, and competitive market.11

In 2023, a deteriorating economic outlook further accentuated the scale of the healthcare challenge.12 In addition, climate destabilisation, including extreme heat, increasing air pollution, and the spread of infectious diseases pose multiple threats to the health and well-being of Europe citizens, adding further complexity to already beleaguered healthcare systems.13

In light of these escalating health challenges, a thorough transformation of Europe’s healthcare systems is crucial. Existing reactive and paternalistic healthcare frameworks are falling short in the face of rising demand and high inflationary costs, making it vital to transition towards a more sustainable, resilient and citizen-centric model.

The EC has acknowledged that the healthcare challenge and rising health inequalities, exacerbated by the pandemic, require an urgent, transformative approach to ‘level up’ healthcare capacity and capability. In November 2022, the Commission launched a new EU Global Health Strategy, which recognises that securing the health of European citizens is paramount. The strategy identifies the need for:

• A profound transformation of European healthcare systems, including a relentless focus on digitalisation and building a more sustainable healthcare workforce;
• Incentivising ‘greener’ healthcare systems; and
• Having a stronger focus on primary care and a far greater emphasis on prevention and keeping people healthy while giving them a greater understanding of and more power over their own health.14

The present moment is pivotal for European countries, individually and as a whole, to reimagine the business and operating models running their healthcare systems, and adopt a more resilient, inclusive and innovative model that accentuates the well-being of its citizens. Such a transition shifts the focus from the current predominantly reactive and treatment-focused system, to one based on proactive health promotion, prevention and delaying and managing symptoms. This vision of the future of health could simultaneously meet escalating healthcare demands in a more cost-effective manner and solidify Europe’s position as a torchbearer of sustainable and accessible healthcare globally.