megatrends in the healthcare industry
TRANSCRIPT
*connectedthinking
Megatrends in the Healthcare Industry
Madrid, September 12th, 2006
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The HealthCast Series
HealthCast 2010
Disruptive Drivers of This
Decade
HealthCast Tactics
Success Strategies for
Next 3 to 5 Years
HealthCast 2020
Sustainability through Global
Lessons
Add image here
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Sustainability is ThreatenedProjected Health Spending as Percent of GDP
OECD countries are converging in spending trends
Global health spending will triple to $10 trillion in 2020
7%9%
11%13%15%17%19%21%23%
US OECD w/o US
21%
16%
Drivers:• Technological
advances• Aging• Rising standard
of living• Consumerism• China Source: OECD data, PwC
estimates
2003 US per capita spending on healthcare -- $5,670
Rest of OECD -- $2,3521
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Despite High Spending, Patients Often Don’t Get the Care They Need
0%10%20%30%40%50%60%70%80%
BreastCancer
Low backpain
High bloodpressure
Depression Diabetes Asthma SexuallyTransmitted
Disease
Hip Fracture
Source: McGlynn, et al., New England Journal of Medicine, 2003.
On Average, Adults Receive 55% of the Recommended Care for Many Common Conditions
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Medical Errors Are a Leading Cause of Death
Number of Deaths per Year
Sources: National Vital Statistics Report, Institute of Medicine
Medical Errors Compared to Other CommonCauses of Death
Medical Errors44,000-98,000
Motor Vehicles47,000
Breast Cancer41,000HIV
14,000
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Is Healthcare Spending Worth It?
0
50
100
150
200
250
300
350
400
1980 1990 2000
Mortality from Heart Attacks in Relation to Advances in Care
1980s
Blood thinnersBeta Blockers
CABG
Metal stents
ThrombolyticsImplantable defibrillators
Drug-eluting stents
1990s 2000s
StatinsACE inhibitors
Death Rate per 100,000
Source: www.cdc.gov/nchs; The Value of Investment in Health Care
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Adaptable Delivery
Roles and Structures
Quest for Common Ground
Quality and Safety Standards
Realignment Incentives
Digital Backbone
Climate of
Innovation
Strategic Resource
Deployment
Building the Sustainability Core:Seven Features of a Sustainable Health System
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Sustainability Feature 1.Common Ground
A vision and strategy balance public versus private interests and provide basic health benefits within the context of societal priorities.
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Efforts to Encourage Competition
Germany Public hospitals are privatizedReduction in costs, competition among private hospital groups
The Netherlands
Insurance companies contract with providers independently, forcing providers to differentiate themselves.
Begins in 2006
Singapore MediShield plus, a government plan that paid for hospital care, is privatized Under way
U.S. Medicare outsources drug benefit to private companies, which compete for beneficiaries Benefit starts in 2006
England, Ireland
Services, such as cataract surgery, outsourced to private companies Waiting lists reduced
AustraliaGovernment offers 30% tax rebate to encourage consumers to buy health insurance; premiums are cheaper to early buyers
Number of insured Australians increased from 30% in 1998 to 45% in 2002
CanadaIn 2005, the Canada Supreme Court rules long waiting lists violate patients' "liberty, safety and security" under the Quebec charter.
Enforcement delayed til 2006 while debate continues
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Transferable Lessons: Common Ground
- Collaborate across traditional sectors and territory boundaries
- Determine what care or benefits are basic to public health and structure an insurance system for the rest
- Use regulation to encourage and strengthen competition
- Access new sources of capital to remain competitive
• New Dutch system has mandatory insurance and basic benefits package.
• German hospitals privatized• Outpatient drug benefit
outsources to PBMs
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Sustainability Feature 2. Digital Backbone
Interoperable electronic networks accelerate integration, standardization, and knowledge transfer of administrative and clinical information
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The necessary digital transformation of the healthcare system
“Paper kills”
Newt GingrichFormer US House Speaker in describing the problems of paper health records
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The necessary digital transformation of the healthcare system
Patient
Doctor
Information and clinical decisions
Medical knowledge
Clinical record
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The necessary digital transformation of the healthcare system
MolecularMolecular(Genetic character(Genetic character of self pathogens) of self pathogens)
CellularCellular(Types, counts,(Types, counts,
receptors)receptors)
TissuesTissues(Metabolism(Metabolismpathology)pathology)
Organ SystemsOrgan Systems(Anatomic detail)(Anatomic detail)
InterventionsInterventions(Orders, meds,(Orders, meds,
procedures)procedures)
PatientPatientDecision SupportDecision Support
Clinical DecisionClinical DecisionSupportSupport
Computerized Computerized Patient RecordPatient Record
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The necessary digital transformation of the healthcare system
M.D.M.D.
PatientPatient
EHR/EnterpriseEHR/EnterpriseSoftwareSoftware
Trusted Sources /Trusted Sources /Info. BrokersInfo. Brokers
Search Engines /Search Engines /AgentsAgents
GossipScience
CollectivePatient
Experience
Case ManagerCase Manager
KnowledgeDomains
ConsensusCare Pathways
InfomercialsCollective
M.D.Experience
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Transferable Lessons: Digital Backbone
- Invest in shared IT infrastructure
- Leverage technology to eliminate duplication and administrative inefficiencies
- Make technology a reason to gather together
• EU health ministers move toward trans-European e-health system by 2010
• NHS investing £6.2 billion in national electronic network
• 200+ RHIOs under way• 40% of general practices in
Australia process claims electronically
• CAQH centralizes credentialing and moves toward streamlining claims administration
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Sustainability Feature 3.Incentive Realignment
Incentive systems ensure and manage access to care while supporting accountability and responsibility for healthcare decisions
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Transferable Lessons: Incentive Realignment
Transferable Lessons:
- Establish shared incentives to accomplish mutual goals
- Make wellness the preferred, if not mandated, lifestyle
- Make consumers more personally responsible for the cost of seeking care
- Put prices on the menu; disclose charges
- Reinforce clinicians’ roles as facilitators of appropriate care
• Italy finds limited results from co-pays, focuses on physician referrals
• Employers raise consumer contributions through co-pays, savings accounts and co-insurance
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Rules-based clinical referral
Co-pay effect
appropriate unnecessary
Level of Demand
Combining Co-Pays and Physician Incentives
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Effect of co-pay on physician utilization in Germany, 2004-2005
-8.7%All physicians
-11.3%Orthopedist
-17.5%Dermatologist
-15.1%Gynecologist
-11.6%Surgeon
-7.9%General practitioner
Source: German Resident Doctors Association
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Designing Incentives for Healthy Lifestyles
Obese Overweight NormalBack problems 9.9% 8.9% 6.9%
Hypertension 23.4% 12.5% 4.9%Diabetes 9.2% 3.4% 1.3%
Heart Disease 7.5% 4.7% 3.7%
Source: The Rise in Prelevance of Treated Disease: Effects on Private Health Insurance Spending, Health Affairs, June 2005
Prelevance of Treated Disease by Body Mass Category
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Sustainability Feature 4.Quality and Safety Standards
Defined and enforced clinical standards establish mechanisms for accountability, enhance transparency, and build trust
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Transferable Lessons: Quality and Safety Standards
Transferable Lessons:
- Harmonize quality standards
- Make error reporting voluntary and anonymous
- Incentivize clinicians for outcomes, not activity, through pay-for-performance
- Learn from existing systems when designing performance-based reimbursement
- Publish or perish
- Leverage quality to move the market
% who said pay-for-performance efforts had not started in their area
0%
5%
10%
15%
20%
25%
30%
35%
2002 2005
Source: HealthCast 2020 Survey
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Sigma Defects/Million 1 690,000 2 308,000 3 66,000 4 6,210 5 230 6 3.4
CEO Expectations: Six Sigma Quality
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Six Sigma Quality
Airline Deaths
Airline Baggage Handling
Missed diagnoses of acute cardiac ischemia in ERs
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Six Sigma Quality
Airline Deaths - better than 6 Sigma - < 3 deaths per million boardings
Airline Baggage Handling - approx. 4 Sigma – 6000 mishandled bags/million
Missed diagnoses of acute cardiac ischemia in ERs – approx. 3-4 Sigma – 45,000 misses/million
Source: Pope, et al, NEJM 342:16 pp 1163-1170, April 20, 2000
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Sustainability Feature 5. Strategic Resource Deployment
Resource allocation – capital, people and service lines -- appropriately satisfies competing demands for access and cost control
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Transferable Lessons: Strategic Resource Deployment
Transferable Lessons:
- Organise care around the patient
- Move information, not people
- Anticipate cream-skimming
- Think small
• Norway uses telemedicine to decrease costs of transporting patients to central centres
• In Australia, 45 hospitals offer “Hospital in the Home”
• Spain is building a regional network of 37 small, digital hospitals in Andalusia
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Sustainability Feature 6. Climate of Innovation
Technology and process changes are fostered to continuously improve care, efficiency and outcomes
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Transferable Lessons: Climate of Innovation
Transferable Lessons:
- Help workers and clinicians change jobs and processes
- Customise drugs and care to patients’ genetic and cultural levels
- Value technology’s impact on productivity and lifespan
- Listen to consumers
• Homecare providers in the Netherlands and US are training nurses and aides to use laptops and handheld computers that are Internet- or cellular-enabled
• Beverly is making long-term care centers with family-style meals and family areas
• Kaiser trains physicians to talk to patients with a “third person” computer in the room
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Sustainability Feature 7. Adaptable Roles and Structures
Flexible care settings and jobs provide avenues for care that is centred on the needs of the patient
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Transferable Lessons: Adaptable Roles and Structures
Transferable Lessons:
- Broaden and leverage nursing more widely
- Challenge conventional training and licensing models
- Anticipate ways to deliver care to patients who increasingly move and travel
• Australia gives NPs limited prescribing rights
• In Africa, former patients learn to repair fistulas
• The EU has a system for mutual recognition of medical professionals’ qualifications
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An exploration on the megatrends in the Healthcare industry
1. Healthcare is the industry growing most in the economy2. Demographic changes and changes in the patterns of diseases3. Great impact of the new medical technologies4. Great impact of the innovation, mainly related to IT5. Concern about quality6. Appearance of the “new consumer”7. Changes, but not radical ones, in the way of providing services8. Change of the paradigm of the biomedical model9. The emerging health economy10. A place for new global players?
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1. Healthcare is the industry growing most in the economy
Evolution and forecast % GDP in healthcare in the US
Health Spending Projections Through 2013Stephen Heffler et alHealth Affairs-Web Exclusives, W4-79
1993
1998
2001
2002
2003
2004
2005
2013
13,4%
13,1%
14,1%
14,9%
15,3%
15,5%
15,7%
18,4%
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2. Demographic changes and changes in the patterns of diseases
• Ageing of the population
• More importance place on chronic diseases
• More more importance place on mental diseases
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3. Great impact of the new medical technologies
Health and Healthcare 2010 The Forecast, The Challenge. Second Edition. The Institute for the Future, 2003
RATIONAL DRUG DESIGN
ADVANCES IN IMAGING
MINIMALLY INVASIVE SURGERY
GENETIC MAPPING AND TESTING AND PHARMACOGENOMICS
GENE THERAPY
VACCINES
ARTIFICIAL BLOOD
XENOTRANSPLANTATION
Development of new chemical entitities by looking at the physical structure and chemical composition of the target and designing drugs that bind to those molecules
Advances in the four key areas: energy sources, technology of detection, analysis of the images and display technologies
Advances in the fiber-optic technolgy, miniaturization, image digitization and navigational systems for vascular catheters
To date, clinical test have been develop for more than 500 human genetic disorders, a number that will continue to grow. That permits predictive medicine and more personalized treatments
The insertion of a functional gene into targeted cells of a patient to correct and inborn error or to provide the cell with a new function
New uses of vaccines for non-infectious diseases. It is foreseen a new role to prevent virus related cancers and also to treat some cancers
The FDA has recently approved products with synthetic hemoglobin, that could be an ideal substitute of blood transfusions
That will avoid the scarcity of organs and also to treat some other diseases, such as diabetes and Parkinson
STEM CELL TECHNOLOGIESThe impact could be really huge. Damaged heart muscle could be substituted, also pancreatic islet cells in diabetics or some kind of neurons in patients with Parkinson’s disease
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3. Great impact of the new medical technologies
1. MRI and CT 2. ACE inhibitors to treat high blood pressure 3. Balloon angioplasty to open blocked blood vessels of the heart 4. Statins to improve lipid metabolism and reduce risk for coronary heart disease and
other vascular diseases 5. Mammography 6. Coronary artery bypass graft 7. Proton pump inhibitors and H2 blockers to treat gastro-esophageal reflux disease 8. Selective serotonin reuptake inhibitors and new non-SSRI anti-depressants 9. Cataract extraction and lens implant
10. Hip and knee replacement
“Physicians’ Views of the Relative Importance of Thirty Medical Innovations,” Victor R. Fuchs, Ph.D., and Harold Sox, Jr., M.DHealth Affairs, 2001
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4. Great impact of the innovation, mainly related to IT
1. Pay-for-performance programs 2. Introduction of electronic health records into medical practices 3. Add-ons to EHRs--instant medical histories, coding devices, prescription-enabling
modules, or Web sites that permit registration, virtual visits, prescription refills and open-access scheduling
4. Software facilitating office dispensing and prescription writing 5. Software enabling self-care, self-service and self-empowerment of consumers 6. New practice business models (concierge, cash and retail) 7. High tech/high touch remote patient monitoring with patient interactive capacity 8. Personal health records with and without EHRs 9. Disease management programs 10. The transparency movement as part of the consumer-driven care movement
The Top 10 Healthcare Innovations for 2006By Richard L. Reece, M.D., for HealthLeaders News, August 1, 2006
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5. Concern about quality
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6. Appearance of the “new consumer”
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7. Changes, but not radical ones, in the way of providing services
It is not foreseen the appearance of any new healthcare organization capable to substitute the individual medical visits and the hospitals as predominant ways of healthcare provision
New complementary ways of provision:
• On line healthcare services
• E-visits
• Telemedicine
• Focused factories
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8. Change of the paradigm of the biomedical model
Biomedical model Future
Episodic care Management of chronic diseases
Objective: cure Control and adaptation to the disease, when there is no cure
Fee for services Subscription
Process leaded by the provider
Process leaded by the consumer
Curative medicine Predictive medicine
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9. The emerging health economy
Cosmetics
Food and Supplements
Fashion
Security
Building Supplies
Wellness
Traditional Health Care
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10. A place for new global players?
USA, Hong Kong, India, Malaysia, The Philippinnes, Portugal
Sweden, Denmark, Finland, Norway, France, Germay, United Kingdom, Spain
United Kingdom, Australia, Ireland, Saudi Arabia, Spain, Thailand, Hong Kong
Germany, Belgium, The Netherlands, Luxemburg, Portugal, Check Republic, Norway, Sweden, Spain and China (representation office)
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www.pwc.com/healthcare
Thank you
Ignacio [email protected]
+ 34 629 12 86 58