Business Intelligence

Healthcare systems around the world are under siege and many will be unsustainable in 15 years unless fundamental change occurs. Africa and other developing regions of the world are under the greatest threat, being financially and technologically challenged while shouldering a disproportionately heavy burden in terms of diseases like malaria and HIV/Aids.

Rising costs, diminished resources and growing demands are creating a crisis that is prompting healthcare policymakers around the world to seek urgent solutions � often outside their own borders.

If ignored, these trends will overwhelm health systems, thereby creating massive financial burdens for individual countries and devastating health problems for the individuals who live in them.

It is time to look outward for the solutions, says a new global healthcare survey conducted by PricewaterhouseCoopers. �The attitude that all healthcare should be local is dangerously provincial and, in extreme cases, xenophobic. The days of healthcare operators operating in silos must end,� states the survey report.

South African health industry thought leaders were among the people canvassed for their opinions on the future of healthcare by the PricewaterhouseCoopers Health Research Institute.

The survey, called HealthCast 2020: Creating a Sustainable Future, was the result of in-depth interviews with 578 healthcare executives, policymakers and employers, as well as with more than 120 health experts in 16 countries, including Australia, Canada, Europe, India, the Middle East, Japan, Singapore, South Africa, the United Kingdom and the United States.

HealthCast 2020 identifies best practices around the world that could sustain health systems in the future.

�Among the key observations is that global convergence is already changing the way countries think about health � once a notoriously local and parochial sector,� says Wim Oosterom, PwC Europe, Middle East and Africa Healthcare Leader. �Examples include South African companies contracting with Britain�s National Health Service to provide a variety of surgical procedures, and the US turning to Indian and Australian companies for outsourcing of radiology readings.�

But such practices often bring with them sustainability problems � with just one example being the well-publicised phenomenon of rich nations poaching nurses from developing countries like South Africa and the Philippines � where they are arguably more needed and are prohibitively expensive to replace. This illustrates the need for greater co-ordination.

Global healthcare spending will triple over the next 15 years to $10tn, consuming 21 percent of gross domestic product in the US, and 16 percent of GDP in other Organisation for Economic Co-operation and Development (OECD) countries.

Combine these projected cost increases with the anticipated impact of HIV/Aids and you become aware of the pressure that Africa and South Africa face.

Yet even in the most advanced countries � throughout Europe, Asia, the Middle East, Australia, Canada and the US � conventional approaches to healthcare are failing.

Financing future demand is crippling national health systems and economies. Creating a sustainable health system, one that balances cost controls with the need to provide citizens with safe, quality care, will be not only a moral obligation but also a global economic imperative, says the report.

Despite the complexity of the challenges, successful initiatives � often involving technological innovation, preventative care and consumer-focused business models � are happening in many places. These are efforts that have improved health outcomes while also saving money.

Oosterom says it is time to break down barriers, both within health industries and across national boundaries. �While no country has all the healthcare answers, the solutions are out there. Many are in practice. The lessons being learned can and should be transferable if we only open our minds and our eyes.�

In South Africa, private and public sector role-players need to focus on collaboration in order to manage the increasing demand and reduce the disparity between the service offered in both sectors.

�Innovative solutions to common healthcare challenges are emerging, primarily involving technological innovation, preventive care and patient-focused business models,� said Sandy Lutz, director of research for PricewaterhouseCoopers Health Research Institute and author of the report.

�These solutions are changing the way the Chinese think about financing hospitals, Americans recruit physicians, Australians reimburse providers for care, Europeans embrace competition and Middle Eastern governments build for future generations. More importantly, they are improving health outcomes while saving money.�

Globalisation has radically altered the business model for service and manufacturing industries. And health is becoming global as well.

A good example is the collaborative process practiced by the World Health Organisation (WHO) in devising a flu vaccine formula each year. The WHO�s network of 112 national influenza centres in 83 countries monitors the flu viruses, identifies new strains and targets the three most virulent.

This type of global knowledge transfer could easily be adapted to identify other best practices in health processes, treatment and funding mechanisms.

Global education about health issues began in the 1950s with the founding of the WHO and the acknowledgment that fundamental health improvement begins with public health initiatives like clean water and immunisation.

As healthcare costs have spiralled upwards � fuelled by growing demand and medical advances � pharmaceutical companies have felt the pressure to innovate and compete more keenly and have broadened their global reach. Today, as the pharmaceutical industry races to develop genetically targeted drugs and conduct stem cell research, more and more clinical trials are being moved outside Europe and the US to territories where costs and other factors are more favourable. India, for example, has the world�s largest pool of diabetics, many of whom have never received any drugs for treatment; thus greatly simplifying patient enrolment and trial management.

This, in turn, has driven the cause of globally harmonised regulations on trial controls, and foreshadowed the need for broader standards in other areas.

The current phase of healthcare�s search for global solutions is largely �reactive�, declares the PricewaterhouseCoopers report.

This assessment is well illustrated by labour shortages in healthcare. The answer for many developed countries has been to ramp up international recruiting. South African nurses are aggressively recruited by England and the US, facilitated by a permissive visa policy. Filipino nurses can earn nine times in England what they would at home � fuelling the exodus of about 250 000 of them.

�Although physicians from Africa do not represent a significant share of the physicians coming to America, the loss of any physicians is a big problem for some African countries,� notes Edward Salsberg, director of the Centreer for Workforce Studies at the Association of American Medical Colleges.

Need to cut costs or expand services? Outsource to foreign health service firms. In a practice known as �nighthawking�, American hospitals have turned to companies in Israel, Australia and India to read CT scans overnight.

But, as mentioned, some of these activities are unsustainable in the long run. And they raise important questions in the realm of ethics and morality � not to mention international diplomatic relations.

The PricewaterhouseCoopers survey predicts that the next stage of globalisation of health is a focus on sustainability.

Communication advances have allowed information and best practices to be easily exchanged across continents. This inevitably results in comparisons being made � and challenges to practices that have developed over decades in various corners of the globe. But, to be sustainable, health executives need such information, metrics and transparency for better decision-making.

Transparency has become both an asset to learning and an ethical obligation.

There is, of course, another side to transparency and communication. In countries with higher tax rates where governments pay for healthcare, residents are increasingly demanding full disclosure as to how their taxes are being spent and how it helps them. Dutch hospitals, for example, are obliged to present their waiting lists on the Internet. In Ontario, Canada, there is a registry of waiting times for procedures such as cancer surgery and MRI scans.

So, transparency and the transfer of information enable a comparative focus on access as well as on the cost and quality of healthcare. Understanding costs is increasingly seen as a key to reforming many countries� health systems. T

his global staging is expanding to patients themselves. The World Tourism Organisation predicts global tourism will triple by 2020. Low-cost air travel, aided by ever-larger commercial jets that can travel farther and faster, is escalating the risks of disease migration.

During the 2003 outbreak of Severe Acute Respiratory Syndrome (SARS) in Asia and many other parts of the world, the WHO actively demanded an urgent improvement in China�s SARS surveillance system and more open and accurate reporting on the epidemic by the Chinese government.

The focus on sustainability also involves the issue of convergence � global convergence, as best practices are shared, and industry-wide convergence, as barriers between pharmaceuticals, providers, clinicians and biotechnicians fade away. Sustainability will require an understanding of the blended nature of health.

Concerns about sustainability grow as costs run out of control. In the US, the Medicare Trust Fund is projected to go bankrupt by 2019. But, ironically, in 2006, the US has initiated an expensive new drug benefit for the elderly � expected to cost $1,2tn in the coming decade. Alan Greenspan, former US Federal Reserve chairman, has stated: �As a nation, we may have already made promises to coming generations of retirees that we will be unable to fulfil.�

The French healthcare system, ranked the best in the world by the WHO in 2000, is also on the verge of bankruptcy, currently losing �23�000 (about $28�000) a minute.

In England, despite record increases in health funding since 2000, increasing financial transparency is exposing multimillion-pound deficits across some regional health systems. The combination of provider capture, where the provider has control of the market by determining activity, setting price and quality, and relatively weak purchasing power, has meant that the care provided is viewed as neither affordable nor appropriate.

The report says global and industry-wide convergence of healthcare, borne out of necessity and collaboration, will further blur lines between pharmaceuticals, life sciences, providers, payers and clinicians, and the role each plays in reducing costs, providing delivery care, creating access and ensuring patient safety.

Transferable lessons are emerging. The variety is astounding, yet so are the commonalities, concludes the PricewaterhouseCoopers report.

�Around the world and across all sectors of the industry, healthcare leaders are exploring many of the same solutions,� it says. �Across boundaries, languages and cultures, these are the strategies being employed by health systems across the world. The solutions are out there. In the global market of health.�

key findings of Healthcast 2020 include: