2017 global health care sector outlook

Cost

The world’s major regions are expected to see health care spending increases ranging from 2.4 percent to 7.5 percent between 2015 and 2020. Even as countries strive to expand health care access or institute forms of universal coverage, infrastructure issues are making it increasingly difficult for public health care systems to sustain current levels of service and affordability.

Cost-containment measures

Stakeholders continue to implement cost-containment measures aimed at reducing clinical and administrative waste and improving operational efficiency such as consolidation; vertical integration, shifting of care to lower-cost and non-traditional settings; strategic procurement models; clinical pathways; standardized clinical processes; use of generics; shared service centers; and technology initiatives.

Emerging financial models

Reimagining and reconfiguring economic incentives so that health care organizations are rewarded for doing the right thing at the right time to support their patients’ health remains a critical frontier in the push towards risk-sharing and outcome- and value-based payment programs.

Population health management

Sector stakeholders, particularly in advanced health systems, are advocating the shift from a “break-fix” model of health care to one focused on prevention and the overall holistic health of populations rather than episodic and transaction-based treatments.

Localized health management

Numerous countries are moving from a centralized to a more localized health management process to deal with uniquely local demographic, governmental, clinical, and financial factors.

Care delivery

Lack of access to basic health care services and variations in care quality are persistent problems in many of the world’s regions – not only those in which the majority of the population is served by a publicly funded health system but also in developed markets. Funding shortfalls combined with other market drivers can produce a variety of situations that negatively impact access. Lack of clinicians to properly diagnose and treat illness also limits patient access to care. Refugee crisis, ongoing large-scale people movement, and management of fast-moving diseases (e.g., Ebola, Zika) are straining health and social service systems and driving demand for more health care professionals around the world.

Adding social determinants to the care equation

There is growing recognition among governments, payers, and providers that to better manage population health and curb rising costs the sector needs to add social determinants of health and wellness to the care equation.

Innovation

Advancing innovation is a clinical and cost imperative. Already, robotic surgery, 3D printing, implantable devices, and other digital- and technology-enabled innovations that target prevention, monitoring, and treatment, are showing potential to improve outcomes and reduce costs. In addition, new R&D approaches, and big data and analytics use are creating opportunities for innovation but stakeholders are challenged to do so while under pressure to cut costs.

Top 10 innovations to achieve more for less in health care

• Next-generation sequencing
• 3D-printed devices
• Immunotherapy
• Artificial intelligence
• Point-of-care diagnostics
• Virtual reality
• Social media
• Biosensors and trackers
• Convenient care
• Telehealth
  

Operations

Both public and private health systems will likely need to implement new business and clinical operating models to deliver scalable, efficient, and high-quality care, and to reduce waste, redundancies, and costs that threaten system sustainability. Key ingredients are safe, standardized, and evidence-based processes that enable the provision of health interventions to those who need them, when and where needed, with a minimum waste of resources; a competent, well-trained workforce delivering safe, responsive, fair and efficient care; and effective use of innovative technologies. Other trends:

Vertical and horizontal consolidation – few players are “going it alone” in the battle against increasing competition and sharply climbing costs, opting instead to merge and form large health systems or chains that can leverage economies of scale and broader service reach to withstand rising clinical, financial, and regulatory pressures.

Market disruptors – The emergence of non-traditional health services and technology providers from the retail, high-tech, telecommunications, and consumer & industrial products sectors is disrupting the health care marketplace The potential impact of these innovators (many with deep pockets) could transform how established organizations prevent, diagnose, monitor, and treat disease.

Patient engagement – Addressing patients' clinical, financial, and emotional expectations have become major focus areas in light of payment pressures, a market shift to value-based and patient-centered care, and renewed payer emphasis on patient experience as a core element of care quality. Enhancing the patient experience is regarded as a potential driver of hospital performance, since it can strengthen customer loyalty, build reputation and brand, and boost utilization.

Regulatory compliance

Health care is one of the world’s most regulated environments. The primary driver is patient health and safety; however authorities’ approaches to protecting patients can vary widely – assessing and regulating health care practitioner quality, for example, is a hugely complicated process that differs from country to country. Adding to this complexity are factors including rapid clinical and technology changes; calls for increased financial and performance transparency as part of the move to outcomes-based payment models; more sophisticated risk-monitoring techniques; and coordination across agencies and regions. Primary regulatory focus areas include:

Clinical quality and safety – Global harmonization for the evaluation of quality, safety, and efficacy of drugs and medical devices could substantially reduce costs.

Cyber security – Cyber-theft and cyber-espionage continue to endanger patient privacy and the use of sensitive health data.

Counterfeit drugs – Numerous deaths annually are linked to the counterfeit drug trade.

Corruption – Compliance breaches such as life sciences company payments to doctors continue to bedevil the sector and carry the risk of fines and, more importantly, reputational damage.