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2017 global health care outlook

Making progress against persistent challenges


2017 Global health care outlook | Making progress against persistent challenges

Overview and outlook 2


Global health care sector issues in 2017 5
Stakeholder considerations 19
Appendix 20
Endnotes 22
Contacts 25

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2017 Global health care outlook | Making progress against persistent challenges

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2017 global health care outlook |
 Making progress against persistent challenges

Overview
and outlook
The challenges of providing and funding health care
around the globe haven’t changed much over the
last few years—and they are unlikely to do so in
2017. Rising demand and associated spending are
being fueled by an aging population; the growing
prevalence of chronic diseases and comorbidities;
development of costly clinical innovations; increasing
patient awareness, knowledge, and expectations;
and continued economic uncertainty despite
regional pockets of recovery (Figure 1, next page).

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Figure 1: Global health care by the numbers 2017 global health care outlook |
 Making progress against persistent challenges

Global health care


expenditures are projected to
reach $8.7 trillion by 2020,
from $7 trillion in 2015, driven
by improving treatments in
Health care spending as a therapeutic areas (TA) coupled
percentage of gross domestic with rising labor costs and
product (GDP) should also rise increased life expectancy.1
slightly, from an estimated
10.4 % in 2015 to 10.5 % in
2020.2 Government health care
expenditures as a percentage
of GDP are projected to rise
more quickly in low-income
countries than other income Life expectancy is projected to
groups.3 increase by one year by 2020,
which will increase the aging
population (over 65 years old)
Chronic diseases are on the by 8%, from 559 million4 in
rise, assisted by rapid 2015 to 604 million5 in 2020.
urbanization, sedentary
lifestyles, changing diets, and
rising obesity levels.6 By 2020,
50% of global health care
expenditures—about
$4 trillion—will be spent on
three leading causes of death: China and India have the
cardiovascular diseases, cancer largest number of diabetes
and respiratory diseases.7 sufferers in the world, at
around 110 million and 69
million, respectively. Globally,
From 2015 to 2050 the the number is expected to rise
prevalence of dementia is from the current 415 million to
forecast to increase in every 642 million by 2040.8
region of the world. In 2015,
46.8 million people worldwide
are estimated to be living with
dementia. This number is
anticipated to double every 20 Communicable diseases are an
years, reaching 74.7 million in ongoing threat. HIV-AIDS
2030 and 131.5 million continues to affect 36.9 million
in 2050.9 people worldwide, with around
70% of them living in
Sub-Sahara Africa. The Zika
virus and associated upsurge in
microcephaly are major threats
in Latin America.10

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2017 global health care outlook |
 Making progress against persistent challenges

Since today’s health care demand and cost Can success in one clinical area, payment
challenges appear likely to persist in the model, or geographic region be replicated
near term—if not longer—stakeholders’ in another? Can new technologies solve
responses to them will have to turn the tide. old problems? Certainly, collaboration
Are governments, providers, payers, life will be essential to make progress against
sciences companies, and consumers making persistent challenges. This 2017 outlook
progress? Perhaps, but in some cases it reviews the current state of the global
may be too soon to tell. Established players, health care sector; explores trends and
disruptive entrants, and governments are issues impacting sector organizations; and
developing new solutions and approaches suggests considerations for stakeholders as
to improve care access and quality, and to they seek to deliver cost-effective, high-value
control costs. But are their efforts achieving health care.
the cost efficiencies envisioned? Lacking
definitive measurements, results to date
appear mixed.

Health care organizations need to do a


better job of managing clinical and financial
risk; integrating health care, mental and
behavioral care, and social services; and
moving from a break-fix model to one
that fosters preventive and personalized
care. Meanwhile, governments and other
stakeholders are trying to figure out the best
path forward: Here’s how much money we
have to spend on health care, here’s what
we plan to do, here are the tools we need
to provide high-quality care and services,
equitable access, and optimal outcomes for
patients at an affordable cost.

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2017 global health care outlook |
 Making progress against persistent challenges

Global health care


sector issues in 2017
Cost Even as countries strive to expand health dependence on consumer out-of-pocket
The world’s major regions are expected care access or institute forms of universal (OOP) expenditures (Asia, excluding
to see health care spending increases coverage, infrastructure issues are making Japan). Others are engaging in broad-scale
ranging from 2.4 percent to 7.5 percent it increasingly difficult for public health transformation of their existing financial and
between 2015 and 2020 (Figure 2). Health care systems to sustain current levels of care models.
care expenditures as a percentage of service and affordability. In response, a
GDP are projected to rise more quickly number of nations are looking at discrete Cost-containment measures
in low‑income countries due to limited cost-containment measures, such as While some might argue that all the low-
government reimbursements for respiratory leveraging private health plans to improve hanging fruit has been picked, governments
conditions; meanwhile, cardiovascular care provision (Latin America), reducing and health systems throughout the
disease costs continue to rise for lower- and the burden on public systems (Western world continue to implement cost-
middle‑income countries. Europe), moving care to less expensive containment measures aimed at reducing
settings (North America) and diminishing clinical and administrative waste and
Figure 2: improving operational efficiency. Common
tactics include:
Healthcare
Health carespending,
spending,2015–2020
2015-2020
CAGR (2015–2020) •• Physician-hospital, hospital-hospital, and
hospital-health system consolidation, as
8,734.6 well as the formation of chains and larger
Global
7,077.1 4.3% health care entities to achieve economies
of scale.
4,083.6
North America
3,306.2 4.3% •• Revenue diversification through
vertical integration and shifting care
2,006.6 from hospitals to lower-cost and non-
Western Europe
1,645.7 4% traditional settings, including urgent care
centers, retail clinics, and community-
1,964.9
Asia & Australasia and home‑based care as well as
1,537.5 5%
virtual environments.
400.5
Latin America •• Regional or health system-wide strategic
355.7 2.4% procurement for hospital supplies and
Middle East & 138.9 services to increase negotiating power
Africa 112.7 4.2% along the value chain.

Transition •• Clinical pathways to improve patient


246.1
economies 170.9 safety, enhance service efficiency, and
7.5%
regulate drug prescriptions.
0 2,000 4,000 6,000 8,000 10,000 •• Standardized clinical processes to better
USD
USD $ billion coordinate and distribute responsibilities
2020 (P) 2015 among departments and use resources
Source: World Industry Outlook, Healthcare and Pharmaceuticals, The Economic Intelligence more efficiently.
Unit, June 2016

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2017 global health care outlook |
 Making progress against persistent challenges

•• Increased use of generic drugs and A number of countries are exploring Population health management
biosimilars versus more expensive adoption of public-private financial models. Sector stakeholders, particularly in
branded products. China is issuing policies and launching trials advanced health systems, are advocating
to speed-up the growth of commercial the shift from a “break-fix” model of health
•• Shared services centers for back office
health insurance, which traditionally has had care to one focused on prevention and
support such as information technology
a minimal role in the health care system. the overall holistic health of populations
(IT), human resources (HR) and finance.
The coming years may see a reimbursement rather than episodic and transaction-based
•• Technology-assisted service provision scheme with public health insurance as the treatments. Canada’s provinces have started
and delivery methods, such as robots for pillar (covering basic care needs) and private to action this movement by targeting key
drug dispensing, e-prescriptions, novel insurance as a meaningful supplement. population segments to introduce new care
payment cards, patient administrative In Japan, concerns about increasingly models to improve outcomes. Mexico is also
systems, electronic medical records expensive therapies are prompting private focusing public health system programs
(EMRs), personal health records (PHRs), insurance companies to place more focus on and resources on prevention. As part of the
and telemedicine. offering plans that supplement government government’s goal to “consolidate protection
OOP subsidy programs, such as one that actions, health promotion and disease
Emerging financial models sets a monthly co-pay cap (approximately prevention,”15 Mexico is strengthening
Reimagining and reconfiguring economic USD $800 for those at a general income health services at the primary care level,
incentives so that health care organizations level). Similarly, in Southeast Asian markets promoting adoption of healthy habits that
are rewarded for doing the right thing at where public health funding covers improve quality of life, and generating
the right time to support their patients’ only a portion of oncology treatments, awareness among the population about the
health remains a critical frontier in the multinational companies (MNCs) are benefits of more frequent and proactive
push towards risk-sharing and outcome- experimenting with patient assistance medical attention.
and value-based payment programs. At programs to help finance their oncology
a macro level, outcome-based payments drugs. Finally, changes in Mexico’s regulatory Japan’s shift from medication to prevention
are continuing to grow in popularity over framework and the desire to improve can be seen in the Ministry of Economy,
historical fee-for-service (FFS) models in upon the quality of government-provided Trade and Industry (METI) program
response to increasing demand from health health care should drive new public- “Health & Productivity Stock Selection,”
care payers and consumers for high-value private associations. which awards enterprises that focus
health care.11 In the United States, for on and strategically carry out health
example, the Medicare Access and CHIP The United Kingdom is expecting to see and productivity management for their
Reauthorization Act of 2015 (MACRA) is a an increase in collaborative contracting employees. In Australia, population
payment law intended to drive major health and risk-sharing agreements. The National health management is the responsibility
care payment and delivery system reform Health Service's (NHS) shared planning of the Commonwealth government and
for clinicians, health systems, Medicare, and guidance for 2016/2017–2020/2021 outlined initiatives are largely managed through the
other government and commercial payers. requirements for health care systems Primary Health Networks. Social marketing
The law establishes a path towards a new to produce five-year Sustainability and campaigns targeting obesity, smoking,
payment system that will more closely align Transformation Plans (STPs).13 In January alcohol, and other drugs have been
reimbursement with quality and outcomes. 2016, local systems came together to form employed at various times with variable
The first performance reporting period 44 STP “footprints” aimed at transforming results. There is general recognition at a
under the law was scheduled to begin patient care and outcomes and closing government policy level that a population
January 1, 2017.12 deficits; STP implementation began later in health approach is required to bend the cost
the year. The UK‘s “lead provider” model of curve on health expenditures, although real
Still, financial models vary widely by funding is also anticipated to gain traction drivers to incentivize this approach have not
country. Australia, for example, retains a in 2017. In 2015, the NHS invited individual yet been fully implemented.
firm commitment to service-based funding organizations and partnerships to apply
in both its public and private health care to become “vanguard” sites for the new
systems although there is increasing care models program, as part of the NHS’
exploration of outcome-based payments Five Year Forward View. In this model, lead
schemes. Denmark is gradually reducing providers take control over budgets and
the use of DRG-based financial models in its financial risk, subcontracting services to
move towards a focus on service quality and partner organizations.14
relevance rather than volume.

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2017 global health care outlook |
 Making progress against persistent challenges

Despite increasing enthusiasm for had a devolved structure for over 15 years,

Aligning provider population-based health care, an


intransigent and expensive proportion of
is moving to consolidate its 84 regional
health areas into larger regions that
financial incentives the population that is unlikely to change promote better service planning and shared
behaviors/take ownership of its health and services. Finally, in Queensland, the health
well-being will continue to put pressure department has sought to downsize its
Founded in 2005, Germany’s
on health and social care systems. And central support services while encouraging
Gesundes Kinzigtal is a joint
there are other areas to improve upon devolved authority and accountability to its
venture between a network of
before population health can truly take health services and boards.
physicians in Kinzigtal and a
hold, namely: integrating coordinated
Hamburg-based health care
care management in provider and payer Local state representatives in Mexico can
management company, OptiMedis
organizations; implementing technological make health care budget decisions and
AG. Its population-based integrated
and analytics capabilities that enable adopt different types of solutions based on
care initiative is a shared savings
tracking patient care activities and their resources, capacities and needs. In
model that has demonstrated both
outcomes across different care settings; and another example, every local government
cost and quality improvements.
offering strong payment and contracting in Japan is required to anticipate its health
Gesundes Kinzigtal providers share
incentives. Consistent use of EHRs also care needs in 2025 and estimate the gap
the savings with its two sickness
remains a barrier. While progress is being between current-state and anticipated
fund payers (which manage the
made to increase EHR adoption, providers’ future-state resources. Based on this
health of about 35,000 people)
budget constraints are limiting their ability estimate, local governments will develop a
when costs fall below nationally
to make the necessary capital expenditure forward-looking health care plan including
determined benchmarks.16
investments. required medical resources and allocation
Although based on a fee-for-service
of hospital beds. Although hospitals are not
(FFS) compensation structure,
Localized health management compelled to follow their local government’s
provider financial incentives are
The world’s health systems share many plan, the national government’s medical
aligned to health outcomes through
similar care and cost challenges but each fee reform is expected to drive the
performance bonuses tied to losing
region, country, and community also required changes.
weight, quitting smoking, or
deals with issues based on uniquely local
improving clinical measures of
demographic, governmental, clinical, and In the United Kingdom, the 2015 “Devo
health, such as A1c for diabetic
financial factors. For this reason, numerous Manc” deal gives Greater Manchester
patients.17 A study conducted using
countries are moving from centralized to autonomy over the region’s £6 billion
data from 2004–2011 found that
more localized health management. health and social care budget.21 Similarly,
there was a decline in overuse,
the London Health and Care Collaboration
underuse, and misuse of health
Australia is a case in point: A number Agreement and London Health Devolution
care in the Kinzigtal region, as well
of state-based health departments are Agreement paved the way for London to
as improvements in patient
redefining their role to be strategic health gain increased autonomy over its health and
experience.18 Cost growth has also
care commissioners or system managers social care provision.22 Despite a potential
slowed: The Gesundes Kinzigtal
rather than service providers. Western slowdown in devolution due to a 2016
integrated care initiative generated
Australia has recently moved to establish cabinet reshuffling,23 the move towards
16.9 percent savings in overall
boards and executive management regional commissioning is expected to
health care spend between 2006
teams for each health district. New South continue. This has already been evidenced
and 2010,19 led primarily by a drop
Wales, which already has established that through reforms in NHS England Specialized
in hospital admissions.20
structure, is in the process of designing Commissioning—in which commissioning of
what the “second wave” of devolution will specialized services occurs through regional
be to provide more autonomy for the 17 area teams—along with the increased role of
local health networks. Victoria, which has regional STP “footprints” in commissioning.24

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2017 global health care outlook |
 Making progress against persistent challenges

Investing in prevention Case study:


Smoke-free schools in
Germany—tackling at-risk
Prevention and health promotion is •• Adult and child immunization
groups early improves outcomes
one of seven “vital signs” or markers of policies and programs supported
of primary prevention
a healthy health care system according and fully funded by government
“Be smart-don’t start” is an ongoing,
to a July 2016 Deloitte UK Centre for that aim to maintain or increase
school-based German campaign
Health Solutions report, Vital Signs: How rates of vaccination against
aimed at delaying and preventing
to deliver better health care across preventable diseases.
smoking initiation and moving from
Europe.25
•• Disease screening (for example, experimental to regular smoking.
breast, cervical, colorectal and prostate The campaign is supported by the
Prevention is an investment in people’s
cancer screening as well as child and Federal Centre for Health Education,
health. It reduces the burden of disease
senior health screening programs) all federal states, and a large
and contributes to the sustainability of
aimed at early identification of those number of public and private health
health systems. Investing in prevention
at risk of illness and helping staff and health care organizations.
is an opportunity to improve system
to target health care interventions Classes can participate after voting
efficiency while reducing inequalities.
more effectively. to be a non-smoking class from
There is wide consensus and evidence
November till April of each year.
that show health promotion and •• Health care-associated infection
(More than 7,500 classes registered
disease prevention activities are prevention policies and programs
for the 2015-2016 school year
cost-effective. They also contribute to to reduce the extent of such infections
competition.) Students must sign an
increasing longevity and improved and growth of antibiotic resistance.
individual contract and a joint class
health status. Unfortunately, health
•• Improved secondary prevention by contract promising not to smoke or
systems are still built on illness and not
educating and training primary care consume nicotine in any form during
health promotion. While policymakers,
staff to understand the benefits of the competition. Students engage in
payers, and providers acknowledge the
prescribing statins, anti-hypertensives, numerous health-related activities
need to shift focus from sickness and
anti-cholesterol drugs. etc., and and report weekly on smoking
cure to wellness and prevention,
prescribing in accordance with habits; a minimum of 90 percent
progress in tackling health inequalities
standard protocols and guidelines with of students need to refrain from
and managing long-term conditions is
targets to reduce risk factors such as nicotine-use for the class to remain
variable.
high blood pressure, high blood sugar in the competition. Successful
and low oxygen levels. classes enter a prize drawing. A
Good prevention encompasses a range
longitudinal study of the program
of approaches to reduce the risks of ill •• Utilizing every point of contact
published in 2012 showed smoking
health, including: between health and social care
rates in adolescents declined from
staff and the public (e.g., health care
•• Health literacy, education 28 percent in 2001 to 11.7 percent in
settings, schools and workplaces)
programs, and campaigns 2011 (around three million students
to promote prevention and healthy
aimed at improving knowledge and participated in the program over
lifestyles, including physical, mental
understanding of health and health that period).26
and sexual health.
care, especially in vulnerable and high-
risk groups; supporting people to self- •• Providing transparency of provider
manage, especially those with chronic, and clinician performance
long-term conditions; and modifying on prevention.
behaviors by encouraging healthy
lifestyle choices.

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2017 global health care outlook |
 Making progress against persistent challenges

Care delivery of situations that negatively impact access; Some health systems—Mexico and Australia
Lack of access to basic health care services among them, inadequate and/or outdated among them—are making increased
and variations in care quality are persistent health system infrastructures (facilities, use of public-private partnerships
problems in many of the world’s regions— technology, equipment, treatments). For (PPPs) to remedy the lack of health care
not only those in which the majority of the example, the number of hospital beds infrastructure. Most new capital funding
population is served by a publicly funded is declining in the transition economies projects in Australia are PPPs. Examples
health system but also in developed markets of Central and Eastern Europe (including include the recently completed Fiona Stanley
such as the United States, where The Russia and Ukraine), Western Europe, hospital in Perth which has all non‑clinical
Commonwealth Fund, in a 2016 11-country North America, Asia and Australasia (Figure services provided by Serco, and the
survey, found that one-third of U.S. adults 3), spurred by regional economic slumps, Northern Beaches Hospital in New South
went without recommended care, did not decreased government spending on health Wales (NSW) which is fully operated by a
see a doctor when sick, or failed to fill a care, hospital closings and consolidations, private hospital operator (Healthscope) but
prescription because of costs.27 Intermittent and pricing pressures attributed, in part, funded by the NSW government for public
or chronic funding shortfalls combined with to adoption of value‑based payment patients. There also is a growing appetite for
other market drivers can produce a variety mechanisms for clinical procedures. forming Non-Governmental Organization
(NGO) and private-sector consortia to
respond to population/outcome-based
Figure 3: Shrinking number of hospital beds
projects, particularly chronic disease
management and/or care for the elderly.
Regional comparison of number of beds
(per 1,000 of population) Conversely, the United Kingdom may be
moving away from PPPs. The UK was an
CAGR
early adopter of PPPs (also called the private
finance initiative, or PFI) for health care,
Economies in 7.70
introducing them in 1991.28 However, recent
Transition 8.29 (0.7%) developments—i.e., the reduction in NHS
funding at a time of increasing demand—
4.81 have limited stakeholders’ appetite for
Western Europe
5.14 further public-private collaborations. Indeed,
(0.7%)
the costs of PFI have proved cost-prohibitive
for a number of UK hospitals.
2.81
North America
2.91 (0.3%) Lack of clinicians—especially general
practitioners and specialists—to properly
diagnose and treat illness also limits patient
Asia and 2.01
access to care. Demand shock caused by the
Australasia 2.09 (0.4%) refugee crisis, ongoing large-scale people
movement (e.g., undeveloped to developed
2.12 countries, rural to urban settings), and
Latin America management of fast-moving diseases (e.g.,
2.05 0.3%
Ebola, Zika) are straining health and social
service systems and driving demand for
more health care professionals around
2020 2010
the world. Yet a comparison of physician/
population ratios for 2010 and 2020 shows
Source: EIU database, accessed on 10 August 2016 considerable regional disparities.

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2017 global health care outlook |
 Making progress against persistent challenges

Workforce shortages are being •• Physicians in China remain tied to public Increasing numbers of public and private
compounded by rising labor costs which, hospitals and focus on maintaining their health systems are embracing (and
along with pharmaceutical pricing, professional ranking within the public importantly, funding) technology-enabled,
higher‑acuity patients, and infrastructure system, despite initiatives to allow them virtual care—online, telehealth, mobile
needs, area key drivers of hospital cost to practice at multiple sites. Thus, private/ health (mHealth), wearable and implantable
growth.29 Workforce issues can be seen in foreign hospitals face the obstacle of patient monitoring devices, and other
both developed and emerging economies, recruiting reputable physicians to attract advancements—to help bridge the care
and often involve identifying and securing waves of patients. delivery gap, especially in remote areas.
the right mix of specialist, primary care, and RingMD is one example. This innovative
mid-level practitioners. Some countries are trying to mitigate online platform allows patients to connect
access issues through dual systems of with verifiably qualified doctors by video or
•• Both the NHS and the social care sectors
public and private health care—with phone from anywhere in the world. Patients
of the United Kingdom have been
varying degrees of success. In Southeast using the RingMD platform can schedule
experiencing issues in recruiting and
Asia there is an increasing gap between an affordably priced consultation in just a
retaining permanent staff. In 2014, there
the state-of-the-art hospital and treatment few minutes.32
was a shortfall of 5.9 percent (equating
infrastructure in private institutions serving
to around 50,000 full-time equivalents)
medical tourism and the well-to-do, and the Technology-driven health care may prove
between the number of staff that
very basic public infrastructure for the local to be a literal lifesaver in geographic regions
providers of health care services said
population. Unfortunately, private health with widely dispersed, rural populations,
they needed and the number employed,
care is unaffordable for most of the region’s such as Africa and Southeast Asia. The
with particular gaps in nursing, midwifery
consumers and private health insurance practice is also gaining traction in developed
and health visitors.30 Brexit will likely
uptake remains slow. The situation differs in countries including Australia and the United
lead to negative impacts on an already
China. Public hospitals provide 90 percent Kingdom. Australia already has introduced
constrained health care workforce, with
of the country’s health care services and telehealth and telemedicine services and
EU nationals accounting for 55,000 of the
retain a strong pool of talent and medical there is a growing appetite to consider the
NHS’s 1.3 million workforce. Ambiguity
resources. Still, riding a wave of favorable use of robotics, automation, and cognitive/
over future immigration policy is likely to
policies, strong demand, and an influx of artificial intelligence (AI) in clinical settings.
dampen the ability of the UK health and
private capital, private hospitals are making In the United Kingdom, the Chief Executive
social care sectors to attract and retain
improvements in process management, of NHS England has indicated publicly that
talent from the EU in the short term and
human resources, and medical equipment virtual health care has a strong future in the
many commentators are calling for the
and supplies, thus building their reputation UK and in August 2016 announced a new
government to clarify what arrangements
and service scope. Meanwhile, the £100 million funding pot to aid selected NHS
will be for EU health and social care staff.
government, under pressure from rapidly trusts in becoming centers of global digital
•• Japan has a lower physician-population increasing medical expenses, is encouraging excellence (CODE). This announcement
ratio compared to other developed private health insurance as a supplement of funding support follows other recent
countries, with two doctors per 1,000 to the public scheme. Allowing the announcements by NHS England stating
people (2012). The government promised establishment of private hospitals should that technology which enables patients
to train an additional “250,000 care stimulate private insurance development. to manage their own health is the key to
workers by the early 2020s” to satisfy improving care, promoting efficiency and
demand for elder care.31 cutting costs throughout the NHS.33

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2017 global health care outlook |
 Making progress against persistent challenges

Adding social determinants to the


care equation
There is growing recognition among
ACE Study links •• People usually experience more than

governments, payers, and providers that to childhood trauma and one type of trauma—rarely is it only
sex abuse or only verbal abuse.
better manage population health and curb
rising costs the sector needs to add social
chronic disease
Ten types of childhood trauma are
determinants of health and wellness to the
measured in the ACE Study; five are
care equation. Scientists have known for The U.S. Centers for Disease Control and
personal and five are related to other
some time that social determinants, the Prevention (CDC)-Kaiser Permanente
family members. Each type of trauma
conditions in which people live and work, Adverse Childhood Experiences Study
counts as one instance. Two thirds of the
can directly and indirectly shape physical (ACE Study) 37 has identified a strong link
17,000 people in the ACE Study had an
and behavioral health.34 Among these between childhood trauma and the
ACE score of at least one—87 percent of
influencers are income, education, living chronic diseases people develop as
those had more than one. So, for
and working conditions, transportation adults, as well as depression, violence,
example, a person who’s been physically
availability, childhood trauma (see sidebar) being a victim of violence, and suicide.
abused, with one alcoholic parent, and a
and environmental factors (e.g., lead paint, The ACE Study is one of the largest
mother who was beaten up has an ACE
polluted air and water, lack of outlets investigations of the connection
score of three.39 As the number of ACEs
for physical activity). In general, people between childhood abuse and neglect
increases, so does the risk for these
with lower socioeconomic status have and later-life health and well-being.38
outcomes.
greater exposure to health-compromising Study results have shown that:
conditions.35 However, funding silos exist •• Childhood trauma was very common,
The wide-ranging negative
and communication and collaboration even in employed, white, middle-class,
consequences of ACEs highlight the
among social service agencies, primary care college-educated people with great
importance of preventing childhood
and behavioral health care providers is often health insurance.
traumas before they happen. The CDC’s
limited, disjointed, or absent, conditions •• There was a direct link between
Essentials for Childhood framework
that can impede care quality and drive childhood trauma and adult onset
proposes strategies that communities
up costs.36 of chronic disease—heart disease,
can consider to promote safe, stable,
lung cancer, diabetes and many
nurturing relationships and
Collaborative care models which address autoimmune diseases, among them—
environments for all children.40
behavioral and physical health or programs as well as depression, suicide, being
Essentials for Childhood can have a
which address social determinants have violent and a victim of violence.
positive impact on a broad range of
independently generated improved patient •• More types of trauma increased
health problems and on the
outcomes and lowered costs. However, the risk of health, social, and
development of skills that will help
these three factors are inextricably linked; emotional problems.
children reach their full potential.41
combining social determinants with
collaborative models in a fully integrated
care program may further improve
outcomes and provide the cost savings that Case study: Addressing social program uses proactive outreach to
stakeholders seek.42 However, implementing determinants" like we do for the one prevent hospitalizations and emergency
sustainable integrated care programs faces on page 8 room (ER) visits by focusing on timely
both financial and organizational barriers.43 The Connecting to Care program in use of community-based services,
In addition to a lack of financial incentives Saskatchewan, Canada, has shown including support for medical, mental
for addressing social determinants, certain promising results in cost-control and health, and addiction treatments, as well
activities associated with integrated care, health-outcome improvement by as assistance with social needs.46 While
such as consultations between providers, helping patients in ways that extend the two pilots’ formal evaluations are not
and visits conducted outside of a physician’s beyond the traditional prescription pad yet publicly available, one has reportedly
office (including telehealth and online and office visit. Launched in 2015 as seen reductions in both ER visits and
consultations), are often not reimbursed pilots in two cities, Connecting to Care hospitalizations. One patient’s hospital
under traditional FFS payment models. builds on the “hotspotting” approach, inpatient days were reduced by 84
Structural, communication, and information which mines administrative data to percent (from 120 days in the previous
management limitations also diminish the identify the subset of patients who year to 20); each day spent out of the
effectiveness of an integrated care model.44 account for an outsized proportion of hospital versus in it saved an average
health care utilization and costs.45 The of CAN$1,400.47

11
2017 global health care outlook |
 Making progress against persistent challenges

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

Top 10 innovations to •• Next-generation sequencing (NGS): •• Virtual reality (VR): Virtual reality can

achieve more for less in Advances in genetic sequencing


could lead to the development of
engage patients in low-risk, artificially-
generated sensory experiences that
health care diagnostic tests that may identify at-risk could accelerate behavior change in a
populations where early interventions way that is safer, more convenient, and
could save downstream health care more accessible to the consumer.
Health care is an industry in need of
costs. Diagnostic tests also may help
innovation. Governments, health plans, •• Leveraging social media to improve
clinicians target specific medicines to
providers, and life sciences companies patient experience: Social media
patients who are likely to respond well to
are facing rising costs and inconsistent offers health care organizations a
them, reducing or eliminating the use of
outcomes in their pursuit of the triple potentially rich source of data to
ineffective treatments.
aim—improving care, improving health, efficiently track consumer experiences
and reducing spending. Deloitte •• 3D-printed devices: Manufacturers and population health trends in real
surveyed leaders across the health care and providers could use 3D printing time, much more efficiently than current
system to identify the innovations they to create highly customized, low-cost approaches. Organizations have the
think are most likely to transform health medical technology products that can be ability to track consumer experience and
care. We then narrowed the list to the tailored to suit the physiological needs of population health trends in real time.
top 10 by applying the individual patients.
•• Biosensors and trackers: Biosensors
following definition:
•• Immunotherapy: Immunotherapies, included in rapidly shrinking wearables
classes of drugs that strengthen the and medical devices allow consumers
Innovation: Any combination of
body’s ability to generate an immune and clinicians to monitor and track
activities or technologies that break
response, have the potential to more aspects of patients’ health,
existing performance tradeoffs in the
significantly extend survival for cancer enabling earlier intervention—and even
attainment of an outcome, in a manner
patients, without the negative side prevention—in a way that is much less
that expands the realm of the possible.
effects and associated health care costs intrusive to patients’ lives.
Defined in health care as providing
of traditional chemotherapy.
“more for less”—more value, better •• Convenient care: Retail clinics and
outcomes, greater convenience, access •• Artificial intelligence (AI): AI, the urgent care centers provide more
and simplicity; all for less cost, ability of computers to think like humans, convenient and lower-cost care to
complexity, and time required by the is anticipated to transform health care patients for a number of health issues.
patient and the provider, in a way that by completing tasks currently performed
•• Telehealth: Telehealth offers a more
expands what is currently possible. by humans with greater speed and
convenient way for consumers to access
accuracy, and using fewer resources.
care while potentially reducing office
Incorporating these top 10 innovations
•• Point-of-care (POC) diagnostics: visits and travel time. This convenient
into business models will require
POC diagnostics allow for convenient care model has the potential to increase
changing how health care organizations
and timely testing at the point of care self-care and prevent complications and
currently prevent, diagnose, monitor,
(e.g., physician office, ambulance, ER visits.
and treat disease. However, the industry
home, or hospital), resulting in faster,
needs to break current constraints and
more cohesive, and less-expensive Source: Top 10 health care innovations:
expand the frontier to achieve true
patient care. Achieving more for less, Deloitte Center for
breakthrough performance.
Health Solutions, 2016

12
2017 global health care outlook |
 Making progress against persistent challenges

To be a true game-changer, innovation Yet despite overall growth in investment, many patients don’t take their medicines
needs to begin as early as possible in the targeted treatments still have to go through according to schedule.56 With the cost of
R&D process and new approaches including the rigorous and costly R&D process. And non-adherence estimated at nearly $500
translational medicine are helping to because the treatments may only be used billion worldwide—including costs from
make that happen. A translational approach for a small subset of patients, the return on avoidable hospitalizations, nursing home
to R&D connects the traditionally discrete investment is potentially reduced. It is both admissions, and premature deaths—
steps of discovery, development, and in spite of and because of these challenges innovative solutions are essential to
delivery to facilitate a continuous process that momentum around precision medicine countering the avoidable adverse health
improvement cycle and accelerate time is gathering like never before.55 outcomes that drive-up health spending.57
to market.48 Big pharma and other life
sciences companies are using translational New treatment delivery mechanisms As mentioned earlier, increased adoption
medicine to develop novel therapies for may help improve medication efficacy and reimbursement of digital and
cancer and chronic diseases, focusing on and patient adherence. For example, as technology-enabled health care
gene sequencing, unlocking nanoparticles’ the number of people living with one or solutions can help mitigate care access
potential, and evaluating biomarkers. more chronic conditions has increased, so, challenges. In addition, technology-enabled
too, has the number of complicated daily care can help providers and consumers
Precision medicine offers the potential medication regimens needed to manage improve disease management and enhance
for using more targeted therapies— and treat these conditions. Unfortunately, the patient experience. According to the
targeting treatment to positively responding Deloitte 2016 Survey of U.S Health Care
patients—to improve outcomes and Consumers, respondents’ interest in and
reduce adverse events. When paired Case study: Polypill improves use of technologies for health and fitness
with companion diagnostics treatment adherence purposes are growing:
(an in vitro diagnostic device or an imaging Combining drugs commonly
•• Fifty-eight percent of prescription drug
tool that provides information that is prescribed together in a single
users report refilling prescriptions using a
essential for the safe and effective use of pill—a polypill— helps patients
mobile health application.
a corresponding therapeutic product49), adhere to their prescribed treatment
targeted therapies can help physicians to regimens.58 A cardiovascular polypill •• Forty percent of surveyed caregivers say
select an optimal treatment the first time, is being used in some European they would likely use sensors for location
avoiding the costly and risky practice of and Latin American countries. tracking and fall detection.
trial-and-error prescribing.50 Specialty The polypill includes a fixed-dose
•• Consumer interest in using telemedicine
drugs are another clinical innovation; combination of a blood thinner
ranges from thirty-two percent for a
when used with biomarkers to target (aspirin), a cholesterol-lowering drug
minor injury to forty-nine percent for post-
subpopulations, such drugs could improve (simvastatin), and an angiotensin-
surgical care.
outcomes, lower treatment costs, and even converting-enzyme inhibitor that
prevent disease.51,52 works to stabilize vessel walls and •• Of note to technology solution providers,
blood pressure (ramipril).59 The cost consumers have some concerns about
A recent report from the Tufts Center for for this pill is low: between $14 and using remote patient monitoring and
the Study of Drug Development shows that $18 per month in Latin America.60 telemedicine; specifically, that care
investment in precision medicine has nearly A trial in Argentina, Paraguay, Italy, would be lower-quality than if they saw
doubled in the last five years.53 One example and Spain showed that the polypill a provider in person; and their personal
is the United States’ Precision Medicine resulted in 66 percent adherence health information could be leaked.
initiative, which is focused on building a large to the treatment regimen, a 10
•• Consumers also express interest in using
research cohort for longitudinal studies, percent improvement over patients
robotics and drones for future health
and ensuring regulations are appropriate taking the three drugs separately.
care scenarios, such as medication
to facilitate sharing of patient data across Polypill users experienced
assistance for chronic disease (40
institutions and agencies. The program’s improvements in blood pressure
percent); disease diagnosis assistance (40
goal is to get more targeted treatments for and cholesterol management.61
percent); delivering laboratory samples (38
a variety of diseases to patients faster.54
percent); home maintenance (caregiver)
(35 percent); and disease diagnosis
replacement (32 percent).62

13
2017 global health care outlook |
 Making progress against persistent challenges

Health care digitalization, the collection Sophisticated data sharing, processing, a competent, well-trained workforce
and electronic exchange of vital biological and mining techniques can support the that operates in appropriately-sized and
and clinical data among life sciences development of personalized medicines balanced teams, delivering safe, responsive,
companies, providers, health plans, and and increase speed to market for new drugs fair and efficient care; and effective use
patients can improve drug and device R&D, and devices. Integrating and analyzing new of innovative technologies to contain
manufacturing, distribution, adoption, and types and sources of data also can be used costs, heighten staff performance, and
use. Examples include patient-level data to inform performance management of improve the comfort and safety of patients
to drive discovery of new drugs; electronic commissioned services and to flex payments and staff.68
medical record (EMR) use to establish the up and down (including incentives) according
safety signal of a questionable drug;63 to provider performance.66 As more data Three sector trends—vertical and horizontal
and wearable and implantable devices to becomes available from connected care consolidation, market disruptors, and
collect and transmit patient information sources, analytics should be able to help patient engagement—are indicative
to monitor treatment regimen adherence. detect hidden patterns in information and of health systems’ increasing focus on
To gain maximum value from new digital deliver actionable insights that are likely to operational transformation to offset
capabilities, health systems will need to play a major role in helping health systems persistent clinical and financial challenges.
integrate them into core processes and improve costs and quality.67
systems rather than use them as adjuncts to Vertical and horizontal consolidation
business as usual. The real and perceived value of health care Fewer hospitals and independent physician
digitalization is likely to generate increased practices are choosing to “go it alone” in
It is important to note that while adoption oversight of its use. For example, in June the battle against increasing competition
of digital- and technology-enabled care is 2016, China’s State Council issued guidelines and sharply climbing costs, opting instead
increasing, many health systems are still on for promoting and regulating big data to merge and form large health systems or
the first digital rung; for example, they don’t applications in health care provision. The chains that can leverage economies of scale
necessarily have coverage of computers guidelines also aim to promote sharing of and broader service reach to withstand
in primary or secondary care and are still the government health care information rising clinical, financial, and regulatory
working off paper records. Funding and system and public medical data by pressures. This continuing trend of “bigger
employee training issues may continue to establishing a database based on EMRs and is better” is apparent in the number of
exert downward pressure on widespread prescriptions. U.S. announced hospital mergers and
adoption and use. acquisitions going back as far as 1998
Operations (Figure 4, next page). Denmark’s
The combination of data and analytics is Both public and private health systems public hospitals are in the middle of a
being touted as the missing key to unlock will likely need to implement new business consolidation process, supported by a
new sources of health care value64 and and clinical operating models to deliver range of construction projects, which will
innovation. Hospital expenditures on scalable, efficient, and high-quality care, lead to fewer acute care hospitals. In the
analytics are anticipated to reach USD $18.7 and to reduce waste, redundancies, and United Kingdom, devolution has enabled
billion by 2020, up from USD $5.8 billion in costs that threaten system sustainability. vertical integration between providers in
2015, as hospitals focus on quality and cost Among key ingredients for productive health the Greater Manchester region. Salford’s
reduction.65 care operations are safe, standardized, Integrated Care Organization (ICO), which
and evidence-based processes that enable aims to integrate primary care, acute care
the provision of health interventions to and social care provision, was launched
those who need them, when and where in July 2016 and is moving towards
needed, with a minimum waste of resources; implementation in 2017.69

14
2017 global health care outlook |
 Making progress against persistent challenges

Figure 4: U.S. hospital M&A trends70

350

296
300 287

249 244
250
236

200
175 178
156
139 149
150
132 125
118
110 107
101
90 100
100 88
86 83 78 80 88
72
58 56 59 57 58 60
51 52
50
38

0
(1) (2) (3)
98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14

Number of Deals Number of Hospitals

Source: Irving Levin Associates, Inc. (2015). The Health Care Services Acquisition Report, Twenty-First Edition.
(1) In 2004, the privatization of Select Medical Corp., an operator of long-term and acute-care hospitals, and diverstiture of hospitals by
Tenet Healthcare Corporation helped to increase the number of hospitals affected.
(2) In 2006, the privatization of Hospital Corporation of America, Inc. affected 176 acute-care hospitals. The acquisition was the largest
health care transaction ever announced.
(3) In 2013, consolidation of several investor-owned systems resulted in a large number of hospitals involved in acquisition activity.

15
2017 global health care outlook |
 Making progress against persistent challenges

Announced Hospital Mergers and power, enable market expansion through •• Technology companies are looking
Acquisitions, 1998–2014 two-way referrals, and broaden the base at how to take blockchain technology
There is also growing appetite among of available clinicians for consultations beyond its origin as the public ledger
health care providers in the United and other services. Still, many health care for cryptocurrency transactions and
States, Denmark, the United Kingdom, alliances struggle with technical integration repurpose it to drive health care and life
and other countries for horizontal or and information-sharing, and rely on sciences innovation, strengthen security
system-level consolidation. Providers are poorly structured incentives that prevent of medical and product data, improve
developing Shared Service Centers aimed long‑term sustainability. health plan back-office processes and
at consolidating back-office functions systems, and enhance the health care
in order to achieve cost savings and Market disruptors customer experience.74 For example,
reduce administrative burden. In the The emergence of non-traditional health blockchain applications can provide
United Kingdom, a report issued by NHS services and technology providers from heightened visibility and improved
Improvement estimated that service the retail, high-tech, telecommunications, data-tracking at various points along the
consolidation between hospital providers and consumer & industrial products pharmaceutical and medical device supply
can contribute in some cases to operating (C&IP) sectors is disrupting the health care chain, combatting the ongoing problem of
cost savings of 12–14 percent (compared marketplace The potential impact of these counterfeit medications.75
to between 1–2.5 percent without innovators (many with deep pockets) could
consolidation) through standardizing transform how established organizations Patient engagement
and integrating work processes, support prevent, diagnose, monitor, and treat Anticipating and meeting patients' clinical,
functions, suppliers and investments. The disease. Among notable developments by financial, and emotional expectations
NHS report estimated that consolidating disruptors both small and large: have become major focus areas for
corporate and clinical support functions health system executives facing payment
•• Retail clinics and urgent care centers
alone can lead to cost savings 1–3 percent pressures, a market shift to value-based
provide more convenient and lower-cost
of turnover, within a time frame of six to and patient-centered care, and renewed
health care to patients than traditional
12 months.71 payer emphasis on patient experience as
physician offices and clinic settings.
a core element of care quality.76 Enhancing
Typically located within shopping centers
In the United States and elsewhere, health the patient experience is regarded as a
or other public spaces, these alternative
plans are also “defragmenting” via mergers potential driver of hospital performance,
care sites offer extended hours, more
and acquisitions (M&A) and collaborative since it can strengthen customer loyalty,
locations, and shorter wait times. The
relationships with providers to create build reputation and brand, and boost
use of physician assistants, nurse
powerful data-sharing networks that help utilization of hospital services through
practitioners, and pharmacists, under
drive integration across the continuum increased referrals to family and friends.77
the supervision of physicians, lowers
of care.72 Furthermore, research has shown that
costs. As retail clinics expand their
better patient experience correlates
services to include areas such as chronic
Joint ventures and other collaborative with lower medical malpractice risk for
care management, educational and
agreements are also on the upswing. physicians78 and lower staff turnover ratios.79
behavioral counseling, care coordination,
Japan’s government has established
and infusion centers, their impact may
measures to promote collaboration among What are some of the main drivers of patient
increase. According to the Deloitte Center
medical facilities that allows them to share experience in health care? Deloitte’s 2015
for Health Solutions 2015 Survey of US
physicians and hospital beds and increase Survey of US Health Care Consumers found
Health Care Consumers, 77 percent of
purchasing power. In China, ongoing that staff engagement measures (such as
respondents choose retail clinics for their
medical reform is driving hospitals to quality of staff, staff communication and
convenience, 72 percent for speed of
create alliances and partnerships to gain responsiveness, and appointment ease),
securing an appointment, and 60 percent
operational efficiencies and cost savings. among others, were the most important
for after-hours care.73
Such arrangements improve participants’ drivers of patient experience. Improving
upstream and downstream bargaining hospital staff’s and, in particular, nurses’

16
2017 global health care outlook |
 Making progress against persistent challenges

work environment, therefore, could lead to •• Employee skills in using interactive Regulatory compliance
improvements in patient experience.80 technology and automatic information Health care is one of the world’s most
delivery methods to give patients a regulated environments. The primary
Effective patient engagement is foundational greater sense of control over their care driver is patient health and safety; however
to a positive patient experience. Patient without them feeling overwhelmed by too authorities’ approaches to protecting
engagement is the idea that patients and much information.82 patients can vary widely—assessing and
caregivers are actively and collaboratively regulating health care practitioner quality,
involved in care operations—processing for example, is a hugely complicated process
information, deciding what types and Case study: Patient-centered that differs country to country. Adding to
timing of treatment would fit best with care this complexity are factors including rapid
their lives, and acting on their decisions. Valencia, Spain’s Ribera Salud clinical and technology changes; calls
Patient engagement is crucial for achieving initiative shows that patient- for increased financial and performance
a sustainable and cost-effective health centered care delivery, potentially transparency as part of the move to
system. However, effective engagement enabled by new health information outcomes-based payment models; more
is dependent on health literacy and technology (HIT) solutions, could sophisticated risk-monitoring techniques;
consumers having the appropriate help improve health outcomes and coordination across agencies and
knowledge and confidence to evaluate and and lower costs.83 Launched in regions. In 2017, organizations of all sizes will
navigate the health care system.81 Health 1999, Ribera Salud is an integrated need to continue navigating and complying
information technology (HIT) solutions, care company with a patient- with a highly complex, changing set of global,
social media platforms, and performance centered, population health regional, country, and industry-specific laws
analytics are important patient engagement management orientation. The and directives.85 Primary regulatory focus
aids to improve consumer decision-making, regional government engages areas include:
health behaviors, self-care, and treatment Ribera Salud as a private contractor •• Clinical quality and safety—Global
compliance. Other potential enablers of to manage and maintain primary, harmonization for the evaluation of
patient activation and engagement include: acute, and specialist care services quality, safety, and efficacy of drugs
•• An organizational culture that prioritizes in exchange for a fixed annual and medical devices could substantially
and supports patient engagement capitation payment. Ribera Salud reduce R&D costs (which are then passed
uses a tightly integrated clinical and on to payers), encourage sharing of
•• Formal channels for involving patients business model with considerable knowledge and resources, and result
in the design, management, and consumer choice, a rigorous in fewer clinical trials. For example, the
achievement of positive health outcomes management culture that adheres Identification of Medicinal Products (IDMP)
•• Processes to chart progress on patient to high standards of quality and Data Standards86 are being developed
engagement; for example, using consistency, and a networked health and implemented by the International
surveys to collect feedback including information system shared among Organization for Standardization (ISO),
feedback on patient-reported outcome all service providers. Since Ribera regulators, trade associations, and other
measures (PROMs) Salud is responsible for the cost stakeholders in response to a worldwide
when consumers seek care outside demand for internationally harmonized
•• Peer support, self-management education, the system, providers have strong specifications for medicinal products.
health coaching, and group activities for incentives to maintain high levels of There also have been increasing calls for
improved health and well-being clinical and customer service quality. greater control and stringent monitoring
•• Workforce training in the use of patient Several recent studies found that of medical devices in the wake of Europe’s
activation measurement and in assessing the average cost per patient was PIP breast implant scandal,87 a widespread
levels of patient engagement between 23 and 38 percent lower hip replacement recall, and other incidents
in the areas where Ribera Salud which have highlighted the current
•• Investments in the right technology and operates relative to other regions system’s regulatory weaknesses.
services to empower patients to become in Spain.84
collaborators in their own care

17
2017 global health care outlook |
 Making progress against persistent challenges

•• Cyber security—Cyber-theft and •• Counterfeit drugs—According to •• Corruption—Compliance breaches such


cyber‑espionage continue to endanger the World Health Organization (WHO), as life sciences company payments to
patient privacy and the use of sensitive 100,000 deaths annually are linked to the doctors continue to bedevil the sector
health data. Developed markets, including counterfeit drug trade.90 Legitimate drug and carry the risk of fines and, more
the United States and United Kingdom, manufacturers and distributors will need importantly, reputational damage. The
have suffered economic losses of more to continuously invest in countermeasures United States and China, among other
than $279 billion due to cybercrime.88 such as product traceability and countries, continue to aggressively pursue
Cyber security measures, including authentication technologies and and prosecute corruption within their
implementing frameworks, integrated implement safeguards along the entire health care systems.
systems management programs, and supply chain, particularly at dispensing
security patch applications to identify sites including hospitals and pharmacies.
data breaches, have strengthened the
health care sector’s ability to respond to
threatened and actual cyber incidents.
However, the security infrastructure needs
to be even more robust, as life sciences &
health care organizations experience 340
percent59 more security incidents than the
average industry.89

18
2017 global health care outlook |
 Making progress against persistent challenges

Stakeholder
considerations
Without exception, health care systems Public policies also can play a key role in Additionally, organizations should
around the globe should continue to source encouraging and maintaining collaboration standardize their clinical and business
and implement strategies that can help to across sectors, as well as creating incentives processes to improve quality and efficiency;
improve outcomes and hold the line on for different sectors to contribute what enhance hospital information systems to
costs.91 While there is no such thing as the they can to the cause of improving support evidence-based decision-making;
“perfect health system” there are examples population health.94,95 and use M&A and alliances to share
of good performance in most countries resources and enhance capabilities. Insights
which can provide valuable learnings for all Innovation—Health care leaders should and evidence should inform where future
health care stakeholders92 consider building ecosystems that embrace strategic and tactical investments will be
nontraditional players and sources of made to improve and operations and realize
Cost—Providers finding it difficult to gain knowledge outside their own four walls. greater value.
further cost and operational efficiencies Stakeholders also should consider building
after picking the low-hanging fruit should pilots before investing in scale, learn Regulatory—Taking a standardized,
turn their attention to more transformative to embrace change, and evaluate new consistent approach to compliance
initiatives to bend the cost curve. This revenue sources. Additionally, organizations planning, execution, and monitoring
means breaking through the constraints of a should strive to be agile in anticipating and makes good clinical and business sense
traditional care delivery model; shifting from adjusting their strategies as innovations in today’s highly regulated global health
longstanding FFS payments to outcome- continue to evolve.96 From a tactical care environment. Provider, payer, and life
based, cost-sharing financial models; moving perspective, incorporating digital health care sciences organizations should promptly
from acute, episodic medical treatments and analytics into daily practice can help assess potential capability and data security
to proactive and holistic population health to streamline care pathways, reduce costs, gaps, define their vision and needs,97
management; and transitioning from increase patient satisfaction, and improve establish a forum and governance process
manually intensive clinical and business quality. For example, technology-enabled for risk-related decision-making, secure
processes to technology-enabled solutions. solutions like a polypill or an app designed adequate funding and appropriately trained
to help manage a chronic condition have the staff, and develop effective implementation
Care delivery—Today’s health challenges potential to improve treatment adherence, and remediation programs. Cyber security
are complex and interrelated so care particularly if implemented as part of a should be a major focus area: Organizations
delivery models that use a multi-pronged, high-value health care delivery model. can avoid or mitigate cyber breaches with a
collaborative, and technology-enabled Finally, health care organizations of all sizes centralized security program that contains
approach are more likely to yield positive should embrace innovation and calculated authoritative, uniform, and efficient policies
results. For example, integrated care that risk-taking, and stop waiting for the “perfect” and decisions; encourages employees to
addresses patients’ social, behavioral, and solution—try, learn, and continuously evolve. recognize and report potential threats;
physical needs can help improve outcomes and verifies the cyber security and privacy
and reduce costs; however, implementing Operations—Sector stakeholders can and practices of third-party business partners
a collaborative care model is likely to should learn from the journeys of others, that handle PHI.98 Finally, information-
generate organizational challenges. For both including those in industries outside of sharing and partnering can help to reduce
providers and payers, it can be difficult to health care. Just like commercial enterprises, health care operational and regulatory
overcome employees’ resistance to new providers and health plans should invest in risks. Countries in the EU and elsewhere are
roles and procedures without strong leaders tools and processes to better understand working across governments and agencies
to champion integration and improved HIT their target market and customer segments, to promote a more systematic approach
to enable widespread adoption.93 Improved and improve the patient experience to to regulatory rule-making, monitoring,
education and reimbursement incentives engage more effectively with today’s active and enforcement.
may drive adoption rates and usage. and informed health care consumers.

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2017 global health care outlook |
 Making progress against persistent challenges

Appendix
Explore the latest health care sector insurers cut costs, manage risk, improve MACRA: Disrupting the health care system
research from Deloitte members or visit: customer service, grow their business, and, at every level
www.deloitte.com/us/healthsolutions ultimately, bolster the bottom line. How can MACRA is expected to drive care delivery
www.deloitte.co.uk/centreforhealthsolutions a cryptocurrency technology like blockchain and payment reform across the US
www.deloitte.com/healthcare potentially solve these problems and more? health care system for the foreseeable
future. Congress intended MACRA to be
2016 Global health care outlook: Battling Health system analytics: The missing key to a transformative law that constructs a
costs while improving care unlock value-based care new, fast-speed highway to transport the
Across the globe, governments, health care Talk of analytics and “big data” is health care system from its traditional
delivery systems, insurers, and consumers everywhere in the health care industry fee-for-service payment model to new risk-
are engaged in a persistent tug-of-war these days. Many stakeholders agree that bearing, coordinated care models. It has the
between competing priorities: meeting the analytics provide insights that can enable potential to be a game-changer at all levels
increasing demand for health care services organizations to improve quality and reduce of our health care system. This page serves
and reducing the rising cost of those costs, a combination that is essential to to be a one-stop shop for the latest on the
services. So pivotal is the role of cost on the implementing effective value-based care legislation, including what the MACRA final
global health care ecosystem that it is at programs. As health systems continue to rule means for you.
the core of the many issues—demographic, face shrinking margins, tightening budgets,
financial, operational, innovation, and and evolving payment models, analytics are No regulation is an island: EU regulatory
regulatory—impacting sector stakeholders being touted as the missing key to unlock changes and their impact on the global life
in 2016. new sources of value. sciences industry
The life sciences industry operates in one of
Blockchain in health and life insurance: High-value health care: Innovative the world’s most regulated environments.
Turning a buzzword into a breakthrough approaches to global challenges Life science organizations must navigate and
Health and life insurers are among the Health care organizations across the globe comply with a highly complex set of global,
many players scrambling to determine how are innovating to deliver higher-value health regional, country, and industry-specific laws
blockchain could be adapted to improve care. What are pioneering health care and directives as well as industry standards
the way they maintain records, execute providers, health plans, and life science and codes that span a drug or device’s
transactions, and interact with stakeholders. companies doing to anticipate patient developmental and commercial lifecycle.
Key questions center on whether needs, reduce costs, and improve overall Recent and ongoing European regulatory
blockchain’s unique attributes could help health outcomes in the US and globally? changes are anticipated to be among
the most significant yet for the global life
sciences industry.

20
2017 global health care outlook |
 Making progress against persistent challenges

Precision medicine: Bridging the gap experience is associated with higher hospital determinants have independently generated
between potential and reality profitability. This association is strongest for improved patient outcomes. However,
Precision medicine offers the potential aspects of patient experience most closely these three factors are inextricably linked;
for more targeted therapies—targeting associated with better care—in particular, combining social determinants with
treatment to positively responding nurse-patient engagement. collaborative care models may further
patients—and reducing adverse events. improve individual and overall outcomes,
Despite investment growth, we would be Top 10 health care innovations: Achieving and provide the cost savings that health
remiss to forget that targeted treatments more for less plans and states are looking for.
still have to go through the rigorous and Health care is an industry in need of
costly research and development process. innovation. Health plans, providers, life Vital Signs: How to deliver better health
And because the treatments may only sciences companies, and the government care across Europe
be used for a small subset of patients, are facing rising costs and inconsistent With many more people living longer but
the return on investment is potentially outcomes. They are working to improve care developing multiple, complex long-term
reduced. It is both in spite of and because and health outcomes, all while reducing conditions, it has become more important
of these challenges that momentum costs and spending. What innovations are than ever to ensure health systems
around precision medicine is gathering like most likely to help stakeholders achieve are fit for the future. So how well are
never before. these goals and transform health care over health systems across Europe meeting
the next 10 years? this challenge?
The value of patient experience: Hospitals
with better patient-reported experience Social determinants and collaborative
perform better financially health care: Improved outcomes, reduced
Higher patient experience ratings are costs: Implications and opportunities for
associated with higher profitability. health plans and states
Improving the patient experience can help Three factors can dramatically influence
a hospital improve its financial performance a person’s health status and associated
by strengthening customer loyalty, building health care costs: physical health, behavioral
reputation and brand, and boosting health, and social determinants. Research
utilization of hospital services through has shown that collaborative care models
increased referrals to family and friends. which address behavioral and physical
Deloitte research shows good patient health or programs which address social

21
2017 global health care outlook |
 Making progress against persistent challenges

Endnotes
21. “Devolution: What it means for health and social care in England.” King’s Fund,
1. World Industry Outlook, Healthcare and Pharmaceuticals, The Economic 2015. See also: http://www.kingsfund.org.uk/publications/devolution
Intelligence Unit, June 2016
22. “Groundbreaking health and care devolution plans for the capital launched
2. Ibid today.” NHS England London, 2015. See also: https://www.england.nhs.uk/
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24
2017 global health care outlook |
 Making progress against persistent challenges

Contacts

Mitch Morris, MD Yvonne Wu Abdel Hamid Suboh


Deloitte Global Life Sciences & Health Care LSHC Industry Leader LSHC Industry Leader
Industry Leader Deloitte China Deloitte Middle East
Deloitte Global Health Care Sector Leader yvwu@deloitte.com.cn asuboh@deloitte.com
Health Care Provider Sector Leader
Deloitte Consulting LLP (United States) Dr. Gregor-Konstantin Elbel, MD PhD Valter Adão
mitchmorris@deloitte.com LSHC Industry Leader LSHC Industry Leader
Deloitte Germany Deloitte South Africa
Rebecca George gelbel@deloitte.de vadao@deloitte.co.za
Deloitte Global Public Sector Health Care Leader
regeorge@deloitte.co.uk Charu Sehgal Mohit Grover
LSHC Industry Leader LSHC Industry Leader
Adriaan Lieftinck Deloitte India Deloitte Southeast Asia
Deloitte Global Health Care Sector Leader, csehgal@deloitte.com mogrover@deloitte.com
EMEA region
ALieftinck@deloitte.nl Yoritomo Wada John Haughey
Health Care Sector Leader LSHC Industry Leader
Stephanie Allen Deloitte Japan Deloitte United Kingdom
Health Care Provider Sector Leader yoritomo.wada@tohmatsu.co.jp jhaughey@deloitte.co.uk
Deloitte Australia
steallen@deloitte.com.au Jorge Romero Greg Scott
Health Care Sector Leader Health Plan Sector Leader
Enrico de Vettori Deloitte Mexico Deloitte LLP
LSHC Industry Leader jorgromero@deloittemx.com Deloitte United States
Deloitte Brazil grescott@deloitte.com
enricovettori@deloitte.com Mathieu Van Bergen
Health Care Sector Leader
Lisa Purdy Deloitte Netherlands
LSHC Industry Leader mvanbergen@deloitte.nl
Deloitte Canada
lpurdy@deloitte.ca

25
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