2018 global health care sector outlook

Analysis

2018 Global health care outlook

The evolution of smart health care

With quality, outcomes, and value being the watchwords for health care in the 21st century, sector stakeholders around the globe are looking for innovative and cost-effective ways to deliver patient-centered, technology-enabled “smart” health care, both inside and outside hospital walls.

Overview

With the ever-evolving policies, processes, and capabilities and the given magnitude and complexity impacting the sector, smart health care is not going to come easy. Clinicians, usually, have difficulty coordinating appointments and procedures, sharing test results, and involving patients in their treatment plan. In other words, care providers may be working hard but are they working “smart”? How is health care moving the barriers of the hospital walls? This 2018 outlook reviews the current state of the global health care sector; explores trends and issues impacting health care providers, governments, other payers, and patients; and suggests considerations for stakeholders as they seek to deliver high-quality, cost-efficient, and smart health care.

Global health care sector issues in 2018

Creating a positive margin in an uncertain and changing health economy

Public and private health systems have been facing revenue pressures and declining margins for years. The trend is expected to persist as increasing demand, infrastructure upgrades, and therapeutic and technology advancements strain the already limited financial resources. As a result, spending is expected to be driven by aging and growing populations, developing market expansion, clinical and technology advances, and rising labor costs. As health care costs increase though, affordability and insurance coverage remain problematic. Health care providers are also collaborating to gain competitive advantage.

Creating a positive margin in an uncertain and changing health economy
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Key takeaway

Health care stakeholders are pursuing new cost reduction measures, such as developing alternative staffing models, shifting patients to outpatient services, and reducing administrative and supply costs. In addition, they are exploring new revenue sources such as intellectual property (IP) capitalisation, investing in JVs, commercialising their foreign assets, and launching new companies and philanthropic organisations.

Strategically moving from volume to value

The health care industry is participating in risk-bearing, coordinated care models and continues to move away from the traditional fee-for-service (FFS) system. Stakeholders are moving from volume to value through reform policies, programs promoting operational efficiency, technology use, population health management, wellness, and addressing the social determinants of health.

Strategically moving from volume to value
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Key takeaway

A successful transition to value-based care requires that market players and consumers move beyond transaction-based treatment to the holistic health of populations; from treatment to prevention/wellness; and from individual to population health. Health care providers can also look at deploying innovative care delivery models based on data and analytics.

Responding to health policy and complex regulations

Health systems worldwide share overarching health policy and regulatory goals—ensuring quality care and patient safety, mitigating fraud and cyber threats. Digital health care technology solutions addressing better diagnostics and more personalised therapeutic tools are leading to the challenge of data protection.
The trends in data management and security include cognitive computing, cloud-based, interoperable electronic health records, and Internet of Things (IoT). Cybersecurity and data risk management continue to be front and center, especially with patients taking a more active control of their health, and wanting access and reliability to their data.

Responding to health policy and complex regulations
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Key takeaway

Holistic approaches to investments in people, processes, and technology will be key to regulatory compliance. A thorough assessment by health care businesses to understand how recent and upcoming policy changes will impact organisational priorities is an imperative. Care providers also need to explore strategies to build second-line defenses to reduce their administrative, financial, and reputational exposure.

Investing in exponential technologies to reduce costs, increase access, and improve care

Exponential technologies are driving less expensive, more efficient, and more accessible care delivery on a global scale. A few trends which impact care delivery are

  • Exponentials will reshape health care by impacting areas such as synthetic biology, 3D printing and nanotechnology, and companion diagnostics amongst others.
  • Hospitals of the future are being built through redefined care delivery, digital and AI technologies, and enhanced talent development.
Investing in exponential technologies to reduce costs, increase access, and improve care
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Key takeaway

Organisations may meet some of the objectives of care delivery through digitisation of the health care system. At the outset, keeping pace with rapid technology developments is likely to require massive investments in electronic patient records, eHealth/mHealth, interoperability, and big data amongst others. Organisations should consider strategic investments in people, processes, and premises enabled by digital technologies.

Engaging with consumers and improving the patient experience

Hospitals can provide more personalised care through better engagement with consumers and elevate patient experience by using digital solutions to aid omni-channel patient access, including customer apps, patient portals, personalised digital information kits, and self-check-in kiosks. Other digital channels, and tools to enhance provider-consumer interactions include:

  • Leveraging social media to improve patient experience
  • Telehealth
  • Virtual reality/augmented reality
Engaging with consumers and improving the patient experience
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Key takeaway

Health care organisations should consider extending their focus beyond price and quality of care to creating a customer-centered relationship. Health care has an opportunity to learn from other industries (consumer products, financial services, and hospitality, as examples) how to more effectively target, serve, communicate with, and retain customers and patients.

Shaping the workforce of the future

Workforce challenges in the health care industry, such as staffing shortages in hospital specialties and nursing shortages are evident across the globe. Compounding the problem is a scarcity of next-generation skills to guide and support the transformation to becoming patient-centric, insight-driven, and value-focused organisations. When planning for the future of work, health care organisations will need to assess the physical proximity, automation level, and talent category.

Shaping the workforce of the future
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Key takeaway

Digital technology, robotics, and other automated tools have enormous potential to resolve current and future health care workforce pain points. Health care providers should embrace strategies where talent can collaborate with technology to improve efficiency instead of competing against each other.

Visit our 2018 Life Sciences Outlook to learn more about the trends and issues impacting the life sciences sector.

Cost

Cost is the biggest health care issue facing most countries in 2015. Pressure to contain costs and demonstrate value is coming from all sides. Political uncertainty, persistent economic stress, and austerity measures in numerous countries are calling into question the sustainability of public health care funding. In addition, questions and concerns exist about the amount of funding needed to better align supply to demand and, in particular, how to fund integration and primary care while meeting increasing demands for acute activity. Also, the high cost of targeted therapies, personalised medicine, genetic-based medicine, medical devices, and other advances continues to add to the health care cost burden along with the impact of waste, fraud, and abuse. 

Adapting to market forces

Change is requiring providers and health plans to rethink traditional business models to better address shifting or emerging health care challenges and opportunities.

Increasing role of government – Governments’ pivotal – and growing – role as payer, regulator, and market-shaper in the global health care sector cannot be understated.

Scale to prosper – Converging market forces are setting the stage for what may be a period of rapid consolidation among health care providers, particularly in the U.S. Both vertical and horizontal consolidation has been increasing, despite heightened regulatory scrutiny. In addition, cross-sector convergence is expected to rise with the shift towards an “eco-system” of product and service providers.

Competition for talent – As their populations and health care needs grow both developed and developing countries are struggling to supply adequate numbers of trained, qualified health care professionals, especially physicians and nurses.

Improving access to care – Workforce shortages, patient location, lack of health care infrastructure in certain countries, and outdated facilities in both developed and developing markets are major contributors to health care access problems around the world.

Consumerism – Patients facing large deductibles and cost-sharing for medical treatments and services – including specialty pharmaceuticals and medical devices – are becoming more cost-conscious and more involved in their health care decisions.  

Regulations & compliance

The global health care regulatory landscape is complex and evolving. The primary driver is patient health and safety; however authorities’ approaches to protecting patients can vary widely from country to country. Adding to this complexity are factors including rapid clinical and technology changes; increased scrutiny by governments, the media, and consumers; more sophisticated risk-monitoring techniques; and coordination across agencies and regions. Payment transparency is also taking center stage. Protected health information impacted by security breaches and cyber attacks will also continue to be of importance to stakeholder. 

Market updates

Download the global report from the link at the left, or explore market updates and local implications for the following countries/regions:

 

2015 Global Health Care Outlook
2015 health care outlook: United Kingdom

'The UK's dominant health care issue is likely to be the May 2015 elections, with the different political parties using health as a political football...'.

 

View/download the United Kingdom section of the 2015 Global health care sector outlook report

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