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2014 Global health care sector outlook
Shared challenges, shared opportunities
Irish health care sector needs to adopt new business models, embrace technology and apply local innovation globally to meet health care demands.
Aging populations, access, cost and technology will challenge the sector in the coming years.
Rising demand of health care services coupled with technological advances will create new opportunities for the health care industry. However, continued pressures on cost, lack of access, and market conditions will present serious industry challenges in 2014 and beyond. This is according to a new report from Deloitte, Global health care outlook: Shared challenges, shared opportunities. Additionally, the sector will need to engage public and private organisations on the health care value chain to deliver innovative solutions to address local needs if they want to address emerging market growth and the world’s aging population in the coming years.
The report examines the current state of the global health care sector, provides a snapshot of activity in a number of geographic markets, and suggests considerations for stakeholders as they address funding, cost, and other issues. The report provides a useful reference for Ireland and confirms that many of the issues faced locally are consistent those faced in other western countries.
“Shared health care challenges may lead to shared solutions if individual countries endeavor to learn from other nations’ successful practices and adapt them to local needs,” said Harry Goddard, Deloitte Public Sector Lead in Ireland. “I t is imperative that health care organisations gain a clear understanding of transformational changes taking place in the global health care sector as the push to innovate becomes more apparent.”
“Ireland has begun to address many of the issues identified in the 2014 report, however this is just the start of the transformation journey for the Irish health sector,” noted Harry Goddard. “In particular, significant investment is required in the area of Information Technology, this has been recognised by the HSE in its Future Health document, the National Service Plan for 2014 and the recently published Health Business Services Strategy.”
“The concept of globalisation – thinking globally but acting locally – will move to the forefront in 2014 and subsequent years. In the face of change and innovation, there is an invaluable opportunity for Ireland to reach into global jurisdictions to learn and mitigate the risk of local change. Industry issues are global, even if care is usually delivered locally. And while the effects of these issues are influenced by local factors, many challenges are shared around the world to varying degrees, as are the opportunities for Ireland to innovate to help solve them," Goddard said.
Sector issues in 2014
Among drivers for growth in the global health care sector are spending increases in emerging markets, expected population growth, increasing consumer wealth, and government programmes to expand access to health care. Yet stakeholders also face four major issues in 2014: the impacts of an aging population and rising incidence of chronic diseases; the effects of cost and quality in the delivery of health care services; access to health care in both developed and emerging markets; and the use of health technologies and data management. The challenges and opportunities emanating from each of these areas can be both global and market-specific.
Issue #1: Aging population and rise of chronic disease
The shared, long-term trends of an aging population and an increase in people inflicted with chronic diseases are expected to drive demand for health care services in both developed and emerging economies in 2014 and beyond. The aging population, which is expected to more than triple again over the next half-century, and increasing life expectancies are expected to place a huge burden on the health care system in many markets. Another shared demographic trend creating increased health care demand is the spread of chronic diseases – heart disease, stroke, cancer, chronic respiratory diseases, diabetes, and mental illness, among others – which are, by far, the leading cause of mortality in the world, representing 63 percent of all deaths, and can be attributabled to the aging population, more sedentary lifestyles, diet changes, and rising obesity levels, as well as improved diagnostics.
Issue #2: Cost and quality
Whether a country is spending nearly 18 percent GDP on health care (like the U.S.) or recession-riddled Europe, which is spending around 10 percent, public and private funding systems are economically stressed – across the globe, rising costs are unaffordable and unsustainable. Health care cost increases can be attributed to numerous factors, such as industry consolidation, prolonged hospital stays, expensive biologics and diagnositcs which are outpacing traditional therapies, inefficient processes, and overuse of medicines. Unfortunately, higher costs do not necessarily correlate to better results or higher-quality care, even in developed countries. Sometimes, the biggest danger to patients is not their disease but the hospitals that treat them.
Issue #3: Access to care
Improving health care access is a major goal of governments around the world, and a centerpiece of many reform efforts in many countries. While facilitating increased health care access is an important and worthy endeavor, more people in the system means more demand for services that numerous health care systems are unable to accommodate due to workforce shortages, patient locations, and infrastructure limitations, in addition to the cost issues identified earlier. Many countries across the globe are facing a challenge to meet their required number of health care workers, a shortage that directly affects the quality of care. Uneven distribution of caregivers is also a problem. Patient location can be another deterrent to care. A third constraint on patient access is lack of health care infrastructure in certain countries and outdated facilities in both developed and emerging markets.
Issue #4: Technology
Across the world, health care systems are recognizing the need for innovation; advances in health technologies and data management can help facilitate new diagnostic and treatment options; however, these same advances are likely to increase overall costs, prompting widespread efforts by public and private health care providers and insurers to contain expenditure by restructuring care delivery models and promoting more efficient use of resources. Health care technology changes will be rapid and, in some parts of the world, disruptive to established health care models. Yet, acquiring and leveraging technology innovations require financial investments that many health care providers – even in developed economies – may struggle to afford in an era of cost-cutting and reform. The technology-enabled, transforming health care system is producing an immense volume of information and, more specifically, how to interpret and use that data will be important. Much rides upon its availability, integrity, and confidentiality. Potential patient safety, economic, and reputational damage may also arise if organizations lack appropriate security and privacy controls.
Download the report to explore market updates and local implications for the following countries:
- United States
- Middle East
- South Africa
- United Kingdom
- Southeast Asia