2019 Global health care outlook - Shaping the future - Deloitte
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2019 Global health care outlook Shaping the future
2019 Global health care outlook l Shaping the future
Overview and outlook 3
Global health care sector issues in 2019 7
Creating financial sustainability in an uncertain health economy 7
Using new care delivery models to improve access and affordability 10
Adapting to changing consumer needs, demands, and expectations 16
Investing in digital innovation and transformation 19
Maintaining regulatory compliance and cybersecurity 24
Recruiting, developing, and retaining top talent 28
Appendix 33
Endnotes 35
Contacts 40
22019 Global health care outlook l Shaping the future Overview and outlook The adage, “What goes up, must come down,” isn’t likely to apply to the global health care sector in 2019. Aging and growing populations, greater prevalence of chronic diseases, exponential advances in innovative, but costly, digital technologies—these and other developments continue to increase health care demand and expenditures. 3
2019 Global health care outlook l Shaping the future
Snapshot: Global health care
by the numbers
Global health care spending is projected to increase at an annual rate of 5.4% in 2018–2022, a considerable
rise from 2.9% in 2013–2017. This increase reflects the strengthening of the dollar against the euro and
other currencies, the expansion of health care coverage in developing markets, the growing care needs of
elderly populations, advances in treatments and health technologies, and rising health care labor costs.1
Per-person health care spending is expected to continue to vary widely, ranging from $11,674 in the United
States to just $54 in Pakistan in 2022. Efforts to close this gap will be constrained by higher population
growth in developing economies.2
Higher per-person spending does not always equate to higher-quality health care. When compared to 10
developed countries, the United States ranks last in overall health care performance, highlighted by per capita
spending that is 50% greater than the next country and last place rankings in efficiency, equity, and healthy lives.3
Life expectancy appears to continue to climb. It is projected to increase from 73.5 years in 2018 to 74.4 in
2022—bringing the number of people aged over 65 globally to more than 668 million, or 11.6% of the total
global population. Increasing life expectancy and years of productive life is a major achievement for health
care, because increased output per worker is associated with increased real GDP per capita. The effect is
expected to be most noticeable in Japan, where this share will likely reach almost 29%; in Western Europe it
is estimated near 22%. Even some developing countries, such as Argentina, Thailand, and China, are
starting to experience similar situations.4
The fight against communicable diseases—through better sanitation, improved living conditions, and wider
access to health care—is making notable gains. The number of AIDS-related deaths dropped from 2.3
million in 2005 to an estimated 940,000 in 2017, largely due to the successful rollout of treatment.5
Infections from tuberculosis are falling by around 2% a year.6 The estimated number of malaria deaths
worldwide fell to 445,000 in 2016, down from nearly one million in 2000. New vaccines and wider use of
treated nets have cut infection and death rates for all mosquito-borne diseases.7
Non-communicable diseases (NCDs)—most prominently, cancer, heart disease, and diabetes—accounted for
71% of the 56.9 million deaths reported worldwide in 2016; that share increases to over 80% in the most
developed markets. NCDs’ rise in both developed and developing markets is fueled by urbanization,
sedentary lifestyles, changing diets, and rising obesity levels.8
Ambient pollution contributed to 4.2 million deaths worldwide in 2016, with the Western Pacific region
among the worst affected.9 In China, the effort to fight pollution is a focus of the government’s health care
policy due, in part, to its negative impact on GDP (e.g., decreased worker productivity and the cost burden of
disease). One culprit drawing increased attention: diesel-powered vehicles, which are now known to emit
more pollution than previously thought.10
42019 Global health care outlook l Shaping the future
Health care stakeholders—providers, which requires a philosophical shift in platform interoperability.
governments, payers, consumers, and other focus away from a system of sick care, in
companies/organizations—struggling to which we treat patients after they fall ill, to It’s expected that health care’s evolution will
manage clinical, operational, and financial one of health care,11 which supports well- have far-reaching impacts as new business
challenges envision a future in which new being, prevention, and early intervention. models emerge that blur boundaries and
business and care delivery models, aided It is unlikely, however, that today’s health drive cross-sector and cross-industry
by digital technologies, may help to solve care system and players will be able convergence. The resulting “superclusters”
today’s problems and to build a sustainable to make this shift alone. They likely will of public-private providers, payers, and
foundation for affordable, accessible, high- need to partner with other traditional market disruptors could then use a smart
quality health care. sectors such as employment, housing, health community approach (figure 1) to
education, and transportation to address collectively drive innovation, increase access
This vision may have a greater probability the social determinants of health, and with and affordability, improve quality, and
of becoming a reality if all stakeholders new sectors such as retail, banking, and lower costs through more efficient delivery
actively participate in shaping the future— technology giants to improve data and models.
Figure 1: Characteristics of a smart health community
Appropriate treatments are delivered at the appropriate time, in the appropriate place, for the appropriate patient
Clinicians use technology to more accurately diagnose and treat illness and deliver care
All care delivery stakeholders across the ecosystem effectively and efficiently communicate and use information
The correct individuals do the correct work (e.g., nurses handle patient care, not administrative tasks)
Patients are informed and actively involved in their treatment plan
New, cost-effective delivery models bring health care to places and people that don’t have it
Efficiency improves; waste declines12
Standing at the epicenter of the new health health care delivery model from business- as consumers join other stakeholders
care value system will likely be informed and to-consumer (B2C) to consumer-to-business in accessing, analyzing, and sharing
empowered consumers—change agents (C2B). In response, stakeholders are information. In addition, disruptive trends
and active caretakers of their health who expected to use innovative technologies in health care delivery and mobility may
have high expectations of their health care and personalized programs to engage radically alter everything from the site of
ecosystem. These consumers will likely with consumers and improve the patient care to who delivers care and how.13
be “pulling” solutions rather than being experience. Data interoperability, security,
“pushed” services, flipping the current and ownership should move to the forefront
52019 Global health care outlook l Shaping the future
Is there a road map to this future state? Are care system? It’s highly likely that every and diverge. There is, however, a common
there directions to guide stakeholders’ steps organization’s journey will be unique; they departure point: Responding to the issues
along the path to an accessible, affordable, may be traveling with companions at times impacting the global health care community
high-quality, and sustainable health and alone at others; paths may converge in 2019 (figure 2).
Figure 2: Global health care sector issues in 2019
Creating financial
Maintaining regulatory
sustainability in an
compliance and cybersecurity
uncertain health economy
Adapting to changing Investing in digital
consumer needs, demands, innovation and
and expectations transformation
Using new care delivery Recruiting, developing,
models to improve and retaining top talent
access and affordability
This outlook reviews the current state of patients, and other stakeholders; and
the global health care sector; explores suggests considerations for them as they
trends and issues in 2019 impacting health seek to shape the future of health care.
care providers, governments, other payers,
62019 Global health care outlook l Shaping the future
Global health care sector
issues in 2019
Creating financial sustainability in an uncertain health economy
The emergence of personalized medicine, or niche player—to remain relevant and annual rate of 5.4 percent in 2017–2022,
exponential technologies, disruptive financially viable. from USD $7.724 trillion to USD $10.059
competitors, expanded delivery sites, and trillion (figure 3), although cost-containment
revamped payment models is injecting Battling health system cost pressures efforts combined with faster economic
uncertainty into the global health economy Global health care expenditures continue to growth should maintain the share of GDP
and increasing the urgency for organizations escalate, shining a light on health systems’ devoted to health care at around 10.4
to plan when and how to make future need to reduce costs and increase efficiency. percent over the five-year period to 2022.14
moves—as a market leader, fast follower, Spending is projected to increase at an
Figure 3: Health care spending (USD billion), and CAGR 2017 - 2022
10,059
Global 7,724
4,175
North America
3,509
2,279
Western Europe
1,745
2,427
Asia & Australasia
1,766
437
Latin America
350
279
Middle East & Africa
196
239
Transition economies 2022
177
2017
Source: The Economic Intelligence Unit, Data Tool accessed on 16 August 2018
72019 Global health care outlook l Shaping the future
Similar with recent years, health care appear to be falling short of what is in 2016 and the subsequent creation of
spending in 2019 will likely be driven by needed to counter persistent challenges Integrated Sustainability and Transformation
the shared factors of aging and growing in accessibility (imbalanced distribution, Partnerships comprising both health and
populations, developing market expansion, including a rural-urban divide), affordability social care services, aimed at helping to
clinical and technology advances, and (especially for patients with low economic improve care quality and efficiency of
rising labor costs. In addition, the trend status), awareness (of lifestyle diseases, risk services, develop new models of care, and
toward universal health care is expected to factors, vaccinations), absent or inadequate prioritize prevention and public health.21
continue, with more countries expanding or infrastructure, and skilled human resources.
deepening their public health care systems Australian states, for example, appear to Cost pressures aren’t confined to the public
to reduce out-of-pocket (OOP) expenses.15 be struggling with increasing public health health care sector. As an example, private
Still, the short-term outlook for health care care costs. Australia’s federal government hospitals in India appear to be caught in
spending is expected to vary by region/ and state-based treasury departments are a pricing squeeze; as a result, many are
country: putting pressure on state-based health emphasizing financial management and
systems and public health networks operational efficiency by closely watching
•• Population aging, rising wealth, and the
(PHNs) to drive innovation that can lead to costs, using technology to become more
expansion of China’s health care system
sustainable cost-bending. efficient, and testing different channel
will likely drive increased spending in that
and product mix strategies to maximize
country, as will the rollout of a new health
The UK’s National Health Service (NHS) per-bed metrics. In Australia, a drop in
insurance program in India.16
is illustrative of the public health system the number of people holding private
•• A recovery in global commodity prices cost and funding conundrum: For health insurance is challenging private
appears to be helping to repair public example, in 2010–2011, just 5 percent of hospitals and insurers already dealing
finances and boost health care spending NHS providers in England overspent their with the systemic cost increases. The
in many resource-dependent countries; annual budgets. By 2015–2016, two-thirds decline in private insurance policies is
notably, in the Middle East, Latin America, of trusts (66 percent) were in deficit as a especially prevalent among younger,
and the former Soviet Union.17 slowdown in NHS funding took its toll. The healthier individuals who, in response to
2015 Spending Review provided additional increasing out-of-pocket expenses and
•• The United Kingdom’s economy and health
funding for the NHS, which contributed to lack of transparency in product coverage,
care spending could be dampened by its
a fall in deficits, but 44 percent of trusts are choosing to invest their income in
decision to leave the European Union (EU)
still overspent their budgets in 2017–2018. well-being: sports, recreational activities,
in 2019. Other EU health economies also
The NHS provider sector in total ended nutritional supplements and the like.
may be negatively affected by “Brexit,” as
the year with a deficit of £960 million.20 Looking ahead, Australia is expected to see
well as the long-running migration crisis.18
The situation is exacerbated by the UK’s consolidation in the private hospital sector
•• Tax reform and health policy changes continuing and unrelenting increase in to retain scale and drive efficiencies, along
in the United States will likely continue demand for hospital care despite initiatives with potential purchases by Asian hospital
to undercut the Affordable Care Act’s to reduce over-reliance on hospitals. groups. Private insurers, meanwhile, are
(ACA) programs to expand health care Concurrently, there is an increase in looking to offset decreasing policyholder
access and affordability. The end of the the number of people unable to get an numbers with claims reduction programs
individual mandate in January 2019 should appointment with a general practitioner with a focus on prevention and early
allow companies to offer their employees (GP) and a lack of community and district intervention, organizational redesign, and
cheaper, less comprehensive policies. services that limits NHS capacity to respond new revenue streams (e.g., stepping into the
While these changes will expand choice, to the growing demand. To address these provider space, running dental practices
they are likely to reduce coverage.19 challenges, England has embarked on that aren’t covered by public insurance,
longer-term transformational changes with buying optometry clinics and home health
Despite funding increases in numerous the creation of 44 geographically focused care services providers).
countries, public health systems’ budgets NHS Sustainable Transformation Plans
82019 Global health care outlook l Shaping the future
Competing with disruptive market •• Verily is also looking for opportunities to (NHC), which will enable Luye to cater
entrants enter the health insurance market through to the rising demand for cardiovascular
Health care profits have been eroding partnerships; initially, in the population treatment.32 Fullerton Health China became
over time and, in parallel, new entrants health market. Alphabet planned to invest a major shareholder in Shanghai Redleaf
are threatening to redefine fundamental USD $375 million in 2018 in the health International Women’s & Children’s Hospital,
aspects of the health care business. The insurance start-up, Oscar Health.28 its first investment in the specialty hospital
health technology sector is expected to sector.33 Ramsay Générale de Santé,
•• Philips’ “Connected Care Solutions” is an
reach USD $280.25 billion by 2021, at a the largest operator of private hospitals
intelligent health care service that collects
CAGR of 15.9 percent between 2016 and in France, announced in July 2018 its
patient data (generally related to chronic
2021.22 Among initiatives by top technology acquisition of Capio AB, a Sweden-based
diseases) and allows providers to monitor
companies to disrupt the health care sector: health care provider. The combined group
and deliver round-the-clock solutions by
would become a leading pan-European
•• Apple23 is working with startup Health linking patient data with hospitals.29
private health care services operator
Gorilla to add diagnostic data to the
spanning six countries.34
iPhone, including blood work, by Pursuing mergers, acquisitions, and
integrating with hospitals, lab-testing partnering
The search for alternative revenue sources
companies, and imaging centers. The Some health care organizations looking
is propelling vertical industry integration
offering is primarily geared to physicians to optimize financial and operational
as well. Grab, the leading ride-hailing app
and serves as a marketplace for them performance continue to turn to mergers,
in Southeast Asia, recently ventured into
to place orders and share medical acquisitions, and partnering to add
health care by partnering with Ping An Good
records. But it also has a free offering for capabilities and build scale. While horizontal
Doctor, an e-health platform in China, aiming
patients that promises to gather medical integration in the United States has
to deliver transformative online health
information in 10 minutes. The goal is somewhat slowed—government regulators
care services in Southeast Asia. The duo
to give iPhone users the tools to review, with a “big-is-big-enough” mind-set have
will provide an array of integrated medical
store, and share their medical information, denied some mergers—activity is brisk in
services, such as AI-assisted online medical
including lab results, allergy lists, and other regions of the world. For example,
consultations, medicine delivery, and
more.24 Malaysia’s IHH Healthcare Berhad acquired
appointment bookings through an online
India’s second-largest provider, Fortis
•• Alphabet’s Google unit has acquired platform.35 Similarly, Indonesian ride-hailing
Healthcare, which operates a network of
application program interface (API) giant Go-Jek announced the integration of
34 hospitals. The four-month-long bidding
management company Apigee to help its medicine delivery service Go-Med into
war saw interest from both domestic and
it create data pipes that will enhance the HaloDoc app, a platform that enables
international suitors.30 Additional deals
interoperability among hospitals, online consultation with doctors.36
have included Life Healthcare, one of South
physicians, and patients.25 The company
Africa’s largest private health care providers,
is also applying artificial intelligence (AI) The United States is seeing mergers
selling its 49.7 percent stake in Max
to tackle disease, from monitoring, to between health care insurance companies
Healthcare Institute Limited to KKR.31
detection, to lifestyle management.26 and pharmacy chains—especially those
with retail clinics. The combined company
•• Alphabet’s health care unit, Verily, is In other deals, Singapore-based Luye
could provide direct care to the insurers’
working on detecting diabetic retinopathy Medical Group, which owns 53 health
members and offer its workers one-stop
via a partnership with Nikon’s subsidiary care facilities across 26 cities in Singapore,
shopping for health insurance. In one 2018
Optos, which makes the machines for Australia, South Korea, and China,
example, health insurer giant Cigna agreed
retinal imaging tests and eye disease completed a majority equity investment
to acquire Express Scripts, the nation’s
detection.27 in Singapore’s Novena Heart Centre
92019 Global health care outlook l Shaping the future
largest pharmacy benefit manager (PBM), care; community- and home-based care. align their cost structure and care models
for $52 billion.37 In India, for instance, private clinics and with reimbursement trends and payment
start-ups are targeting select clientele by models, respectively.
Acquisitions by the world’s largest e-retailers offering high-end diagnostics, maternity
have the potential to dramatically disrupt care, oncology care, senior day care, and Health plans that focus on affordability and
health care product and service delivery: other specialties. The UK’s Moorfields Eye create differentiation through innovation
Amazon’s 2018 purchase of online US Hospital is a specialist NHS eye hospital (i.e., member-focused digital service
pharmacy PillPack, which lets users buy and a center of excellence for ophthalmic offerings) could reduce the cost of care
medications in pre-made doses,38 is being research and education. Moorfields’ 2,300 provided to members and maintain strong
echoed by Alibaba Group’s investments staff treat people at over 30 sites in and margins.
in pharmaceutical companies. In August around London.41
2018, subsidiary Alibaba Health Information Providers and payers that embrace new
Technology acquired a stake in local Stakeholder considerations business, care delivery, and risk models
pharmaceutical company Guizhou Ensure Shrinking margins and rising costs are could offset the disruptive potential of
Chain Pharmacy Company Limited. driving public and private health systems powerful market entrants and emerge as
Ali Health engages in pharmaceutical to use technology innovations, M&A, leaders in the new ecosystem of affordable
e-commerce, intelligent medicine, and and other partnering arrangements to health care solutions. One suggestion is to
product tracking platform businesses in improve operational efficiencies and learn from industries outside of health care,
China, operating in the B2C pharmacy reduce expenses; however, doing so can be where we see technological and business
business. Guizhou Ensure Chain, along with complicated by price controls, misaligned process innovations that are applicable in
its subsidiaries, is principally engaged in incentives, and disruptive market entrants. a health care setting. For example, the use
pharmaceutical retail chain business.39 Yet there are ways to shape a more positive of robotic process automation to improve
fiscal future. claims time without overtime or increased
We also see continued convergence staffing is growing. Also, some offshore
between the health care and life sciences Governments that leverage private sector vendors handling health care providers’
sectors (often in cross-border deals) as strengths in cost-efficient operations, revenue cycle processes are replacing
both seek new business models and through public-private partnerships and full-time equivalent (FTEs) employees with
revenue sources. For example, the purchase other collaborations, could help bolster bots.42 While some leaders may be reluctant
of NxStage Medical, Inc., by Germany’s underfunded and/or underperforming to change the status quo, assessing and
Fresenius Medical Care, the world’s largest public health systems. Also, positioning taking risks will be an important part of
provider of dialysis products and services, requested investments in prevention and shaping a more sustainable global health
establishes Fresenius’s presence in the well-being as providing benefits in terms of care system.
US critical care space and positions the economically active citizens and improved
company as a global leader in home GDP may register more favorably with Using new care delivery models to
dialysis.40 These transactions reflect government treasury departments. improve access and affordability
the increasingly blurred lines between
traditionally separate spheres of the rapidly Health care providers that stress rigorous Focusing on value- and outcomes-based
changing health care ecosystem. financial management, efficient operational reimbursement
performance, outcomes-based care, and Health care systems will likely need to
Some organizations are sidestepping the innovative solutions development (e.g., innovate and embrace new business, care
“bigger-is-better” path to sustainability in moving certain procedures to outpatient delivery, and risk models to potentially
favor of single-specialty, niche areas: centers settings) could improve care provision, shape affordable, high-quality health
of excellence; low-cost/high-quality elective reduce costs, counter declining margins, and care solutions for the future. And while
102019 Global health care outlook l Shaping the future
change is never easy, a very important one •• The advanced alternative payment first year that other clinicians will receive
is already underway: the transition from model (AAPM) for Qualifying Participants QP incentive payments based on their
volume-based/fee-for-service (FFS) models (QPs), which allows clinicians who have participation in AAPMs. Additionally, for
to value-based care (VBC). Emerging VBC significant percentages of their practices in the first time, performance information
reimbursement models are edging out FFS risk-bearing, coordinated care models to for clinicians participating in MIPS will be
arrangements and creating a new paradigm receive temporary financial bonuses and publicly available via the Medicare Physician
in which health care services are delivered higher payment updates in the long term. Compare website.46
by a coordinated care community sharing in
the responsibility—and risk—of outcomes MIPS is budget-neutral; it produces savings Across Europe there is growing recognition
and costs.43 in comparison to the baseline through of the need to adopt a more value-based
minimal annual increases in the standard approach to health care; although adoption
Building an outcomes-based financial rates under the Medicare Physician Fee of VBC appears to be currently low, it
model and data infrastructure to maximize Schedule through 2026. AAPMs are more seems to be increasing.47 Likewise, local
VBC reimbursement pathways will likely wide-reaching and may involve both governments in Asia appear to be shifting
be fundamental to many health systems’ commercial and government payers, with their focus from volume-based to value-
sustainable growth. It’s expected that one potential to generate significant savings based care, although uptake is still slow.48
key to prospering in this volume-to-value both to Medicare and to the American Australia’s public health system appears
shift will be business integration and data health system at large. The AAPM’s risk- to be embracing the idea of a value- and
aggregation—both inside and outside of bearing coordinated care models are outcomes-based payment model but the
an organization, and across sectors and largely products of the Accountable Care country is likely a couple of years away from
models of care. Transformative actions Organization (ACO) movement, where getting real traction; efforts to date have
could include adopting a coordinated care providers that exceed quality and cost been confined to pilots and discrete groups
model, improving clinician engagement benchmarks receive financial incentives of patients. One example is the HealthLinks
and alignment, and building the technology such as retaining a portion of any savings or chronic care initiative in Victoria, which aims
infrastructure for sophisticated data receiving quality bonuses. In order to qualify to improve care for patients at high risk of
analytics and financial modeling. While the as an AAPM, an ACO needs to assume risk, multiple unplanned hospital admissions.
level of investment is likely to be substantial, meaning that failure to meet benchmarks HealthLinks is testing whether a flexible
the market shift toward VBC is anticipated to results in penalties or losses. Recent funding model can remove some of the
present unprecedented financial and clinical changes mean that a greater percentage barriers that inhibit effective and integrated
opportunities.44 of ACOs will be required to take on risk models of care, and promote innovative
over the next two years, and therefore models that produce better outcomes for
The shift to value-based care appears to be qualify as AAPMs under MACRA. While little patients at no additional cost to the public
most active in the United States, where a information is currently available on AAPMs’ health system.49
visible example is the Medicare Access and specific savings to date, ACOs in general
CHIP Reauthorization Act of 2015 (MACRA), were found to have saved Medicare $314 A successful value-based payments
which created two new Medicare Part B million in 2017.45 MACRA’s incentives for strategy likely requires payer/provider
payment tracks for clinicians participating in greater ACO participation may accelerate collaboration, sharing of patients’ health
its Quality Payment Program (QPP): this trend across all US payers. data, and IT and analytical support. Given
the interdependencies of public and
•• The merit-based incentive payment
It’s expected that 2019 will mark an private sector stakeholders operating in
system (MIPS), which provides positive
important milestone for MACRA: It is the a VBC ecosystem, it is logical to expect
or negative payment adjustments for
first year that payment adjustments under that coming years will likely see new and
clinicians whose practices are more closely
MIPS will be applied to Medicare Part B novel public-private partnership models
tied to FFS reimbursement; and
payments to participating clinicians and the emerge that promote risk-sharing, allow
112019 Global health care outlook l Shaping the future
for blended financing of critical health care
infrastructures and programs, and maintain
Social determinants of health include factors
system sustainability.50
like socioeconomic status, education,
Shifting health focus neighborhood and physical environment,
Aging populations and the rise of non-
communicable diseases are driving an employment, and social support networks,
as well as access to health care, including
industry shift away from curing disease
in the short term toward preventing and
managing disease and promoting overall
well-being in the long term. Emphasizing
income, education, and housing conditions.
these proactive measures, generally
grouped under the umbrella of population
Addressing social determinants of health is
health, will likely require a corresponding important for improving health and reducing
shift in the way governments, providers,
payers, and other community partners longstanding disparities in health and health
care that are often rooted in social and
interact: Instead of operating in silos that
create structural and cultural barriers
to care, they should work together to
coordinate care and services for the most
economic disadvantages.54
vulnerable people in the population. This
Coordinating efforts across government, can make it difficult to coordinate efforts,
may only be achieved, however, if there is
societal, and health care institutions integrate data, and assess shared impact.
a supportive financial incentive structure
and programs can be essential to
and rebalanced professional power across •• Although investments in one sector can
solving problems arising from the social
caregiving groups. affect outcomes and generate cost savings
determinants of health. This can be
in another, individual sectors generally
challenging, however, for the following
An important part of this approach is consider only their own investments and
reasons:
addressing the social determinants of benefits.
health—the conditions in which people •• There can be inadequate leadership
•• The multiple sectors that affect
are born, grow, live, work, and age— capacity and a lack of sustainable funding
health—often driven by a variety of
because they often have a greater impact mechanisms for health improvement
stakeholder and interest groups—may
on health outcomes than does health efforts. Current funding processes often
have different cultures, values, and
care.51 Health inequalities resulting from fragment the distribution of resources,
vocabularies and generally lack experience
negative socioeconomic circumstances discourage the coordination of funds, and
working together. This can likely impede
have a substantial economic impact, hitting can potentially limit the ability to jointly
partnership and collaboration.55
labor productivity and accounting for an address common risk and protective
estimated 20 percent of European health factors.
care costs (€177bn).52 They also take a social
•• Health care, public health, social services,
toll, having a cumulative effect throughout
and other sectors typically function and
a person’s life. Unemployment and financial
are funded in silos, with different funding
disadvantages pass between generations,
requirements and often-incompatible data
as vulnerable children become vulnerable
collection and information systems. This
adults.53
122019 Global health care outlook l Shaping the future
Moving health care outside hospital settings. Many surgeries and medical and and robotic surgery—and new anesthesia
walls diagnostic procedures that once required techniques that reduce complications and
Clinical innovations, patient preferences, and an inpatient stay can now be performed allow patients to return home sooner.56
financial incentives are prompting hospitals safely in an outpatient setting, thanks to Figure 4 describes the primary types of
and health systems to move certain improvements including minimally invasive hospital-based outpatient facilities.57
inpatient services to lower-acuity/outpatient surgical procedures—such as laparoscopy
Figure 4: Types of outpatient care
Emergency departments
Imaging service facilities
Also known as emergency rooms (ERs).
Facilities where imaging services such as X-rays,
They provide a broad range of emergency
MRIs, CT scans, and ultrasounds are performed.
services to higher-acuity patients.
Specialized outpatient clinics Primary care clinics
Facilities for providing care in specialty These are settings where patients are
areas such as cardiology and urology, seen by their primary care physicians
among others. (PCPs).
Ambulatory surgery centers (ASC) Retail clinics
Facilities that specialize in same-day Also known as convenient care clinics,
discharge of patients post-surgery. these are walk-in clinics offering
ASCs can be either hospital-associated preventive health service and treatment
or freestanding. for uncomplicated illnesses.
Urgent care centers Community health clinics
Facilities that provide medical services to Typically offer primary care services to patients
patients needing immediate care for certain with limited access to health care, including
lower-acuity illnesses and injuries that do not homeless individuals or migrants, and patients
require a trip to an emergency department. with low income or no health insurance.
Source: Deloitte Center for Health Solutions research.
132019 Global health care outlook l Shaping the future
Patients appear to be embracing treatment substitute, for care based on the needs of providers’ understanding of patients’
in outpatient facilities, as they tend to the patient population, capabilities of the health and medical data
cost less—and be more convenient— organization, and availability of resources.
•• Care management process to improve
than inpatient services. Health plans and The overall goal is to improve access to
patients’ understanding of and
government program payment policies are critical services and reduce cost constraints
engagement with their treatment plans
also supportive of lower-cost outpatient across the continuum of care.60 Common
surgical facilities58 and community- and applications of virtual health include: •• Patient adherence to improve medication
home-based care. Factors critical to the adherence, health tracking, and patient
•• Synchronous care to improve patients’
future growth of these care delivery options accountability
ease of access to providers
are scale and responsivity: Scale often helps
•• Care coordination to improve payer/
providers secure a lower cost-per-activity/ •• Physician-to-physician communication to
provider relationships61
service from other partners. Responsivity improve patient care through information
builds patients’ confidence in the quality sharing
Several key factors appear to be elevating
and timeliness of the services they receive in
•• Chronic disease management to improve consumer and provider interest in
outpatient settings.
monitoring and alerts for chronic disease implementing virtual health programs:
patients expected physician shortages, increased
Investing in virtual health/telehealth
patient demand, and the evolving policy
could expand outpatient services while also •• Virtual social work to improve
landscape. One big game-changer:
helping hospitals bend the cost curve and communication and care for underserved
Internet access and connectivity, which has
boost revenue.59 Virtual health is the use of populations
increased 1,066 percent since 2000.62 As
teleconferencing, mobile apps, and other
•• Telehealth care to improve patient of June 30, 2018, there were 4,208,571,287
digital technologies to enable continuous,
monitoring (e.g., eICU, telepsychology, Internet users around the globe—55.1
connected health care. Virtual health goes
telestroke) percent of the total population.63 Asia
beyond simply enabling video visits; it can
dominates the world’s regions in Internet
act as a complement, or even a complete •• Remote patient monitoring to improve
usage (figure 5).
Figure 5:
Internet users in the world by regions - June 2018
Europe Latin America/Caribbean Africa North America Asia Middle East Oceania/Australia
16.8 % 10.4 % 11.0 % 8.2 % 49.0 % 3.9 % 0.7 %
Source: Internet World Stats - https://www.internetworldstats.com/stats.htm.
142019 Global health care outlook l Shaping the future
Also spurring provider uptake of virtual In China, remote registration appears to Stakeholder considerations
health is continued growth in advanced be the only telehealth element that is fully It appears that it’s time to hit “refresh”
technologies. For example, an AI-powered developed. on health care financing and operational
nurse avatar by Sensely is being piloted at models if we intend for the system to be
Mayo Clinic. It interacts with patients by The Deloitte 2018 Surveys of US Health sustainable for future generations. Clinging
asking questions and collecting data from Care Consumers and Physicians have found to fee-for-service as the basis for provider
wearables, sensors, and biometric devices; that both stakeholder groups agree on the reimbursement could burn a deep hole in
assesses the symptoms and medical benefits of virtual health. Consumers point any country’s budget, as the cumulative
history; and analyzes the combined data to convenience and access (64 percent) as costs of managing elderly and chronic
for the physician to consider before the important benefits.69 Physicians agree that disease patients are simply too high for
in-person patient examination.64 In South virtual care supports the goals of patient- individuals, governments, and payers to
Australia, Clevertar’s intelligent virtual centricity. The top three benefits from bear. Similarly, continuing to use hospital
agents (IVAs) offer personalized health care physicians’ perspective are improved patient facilities to conduct low-risk, routine
coaching and support for patients with type access to care (66 percent); improved surgeries drives up costs for payers and
2 diabetes and individuals suffering from patient satisfaction (52 percent); and staying patients.
mild to moderate depression and anxiety.65 connected with patients and their caregivers
Consumers using the Helfie app can take (45 percent).70 As they look beyond hospital walls to shape
a picture of any spot, mole, or mark on a more cost-efficient future, public and
their skin and get it checked by a doctor Despite seeing eye to eye on the benefits, private health systems—especially those
instantly.66 Singapore AI start-up KroniKare consumers and physicians diverge in their that receive a large portion of their revenue
has developed a mobile app that assesses intent to use virtual care. While only 23 from value-based contracts—will likely
chronic wounds and presents a preliminary percent of consumers have had video need to expand outpatient services. Doing
assessment to nurses or other health care visits, 57 percent of those who have not so may require investments in facilities,
workers.67 used them yet are willing to try them in the staff, and technology to grow capacity and
future. The interest from physicians is much infrastructure for outpatient services. A
Importantly, virtual health has an ability lower: 14 percent of physicians have video good place to start is partnering with or
to expand access to care for patients in visit capability today and only 18 percent acquiring health care organizations and
rural and underserved areas that may of the rest plan to add this capability in the physician networks that already have the
lack medical facilities. Telehealth, often next year or two.71 Lack of reimbursement, capacity (e.g., ambulatory surgery centers,
considered the heart of the “smart hospital” complex licensing requirements,72 and outpatient clinics, and retail centers) and
model, has five main elements: remote the high cost of the technologies73 have people to support care in outpatient
registration, remote diagnosis, remote contributed to slow adoption. Reliability and settings and grow the volume of services
consultation, remote medical treatment, and security are also issues: The survey found performed there.75 Upgrading health
telecare. Regions including the Americas, that physicians are concerned about medical information technology (HIT) also may
Europe, and Africa are implementing errors (36 percent) and data security and enhance outpatient capabilities: Health
telehealth backed by technologies like AI privacy (33 percent).74 An implication is that systems can use case management,
and analytics—in the United States, for health systems likely will need to work on supported by analytics, to help decide which
example, 3,000 rural sites are connected overcoming physician-related barriers as a care setting is the most effective, safe, and
to 200 telehealth networks for specialty strategy for wider adoption. Developing an efficient for a patient’s procedure.
consultations, continuing medical education appropriate infrastructure and operating
(CME), and other services.68 Meanwhile, the model along with the technology is likely to Adopting a whole-system, whole-life
Middle East and parts of Asia appear to still be a key differentiator. approach to funding and delivering health
be in the initial stages of implementing basic care likely increases the potential to reduce
tele-consulting for health care accessibility. costs, boost quality, and improve access and
152019 Global health care outlook l Shaping the future
affordability—if all members of the health consumers are expecting solutions that are As patients
care ecosystem unite behind the common coordinated, convenient, customized, and
goal of long-term sustainability. Each accessible78—and they are making their increasingly “shop”
stakeholder group has an important role to
play in this effort:
opinions known. Numerous factors are
contributing to this shift: for health care
•• Governments—Position preventive •• The increasing prevalence of chronic services, enhancing
health care, wellness, and social care diseases that require long-term patient-
funding as an essential driver for broader provider engagement and management patient experience
economic growth; leverage public- and
private-sector strengths in cost-efficient
•• Financial scrutiny due to high-deductible is regarded
insurance plans and other cost-sharing
partnerships and programs that could
reduce health care inequalities.
models that push more costs onto the as a potential
•• Providers—Complete the transition to
patient
driver of hospital
•• An explosion of digital tools to inform,
value- and outcomes-based business
models; also, move certain services
educate, and empower patients with the performance, since
ability to actively manage their well-being
outside hospital walls using less-costly
care delivery options.
and their costs it may strengthen
•• Payers—Make effective use of
•• Customers’ product and service customer loyalty,
experiences in other industries, leading to
increasingly available population health
data to measure the return on investment
a rise in classic consumerism build reputation and
offered by interventions and suggest •• Emerging competition from consumer- brand, and boost
process improvements that could centric, technology-savvy companies that
potentially lower costs of insurance bring a nontraditional mind-set to health utilization of hospital
coverage. care delivery.
•• Patients—Improve health literacy and
services through
actively contribute to the design of local
As patients’ role and influence in their health
care increase, providers and payers must
increased referrals
and national programs that support
prevention, care management, and
likely shift accordingly and take advantage
of emerging opportunities to establish
to family and friends.
wellness.
more direct, personal relationships with Deloitte research
•• All stakeholders—Embrace analytics the consumer.79 Digital technologies can
and digital technology to provide more improve engagement, enable convenience- shows that good
efficient and cost-effective health care.76 driven access to care, and nurture a two-way
relationship for the long term. Organizations patient experience
Adapting to changing consumer needs,
demands, and expectations
that understand and act on how consumers
would like to use digital health, telehealth, is associated with
Providing consumer-centric care
wearable monitoring and fitness devices,
online resources, social media, and other
higher hospital
Not only are regulatory policy and payment technologies will likely be well-positioned profitability.83
reform driving some of the transformation to develop patient engagement strategies
to value- and outcomes-based health that help individuals make informed
care, patients and caregivers appear to be health care decisions.80 These engagement
demanding change.77 Dissatisfied with poor strategies, in turn, could help health care
service and lack of transparency around organizations improve effectiveness,
price, quality, and safety, today’s health care efficiency, and value in service delivery;
162019 Global health care outlook l Shaping the future
excel on quality measures that reflect the •• Apple85 announced it is entering the which coordination between stakeholders,
patient experience; and outperform their personal health record (PHR) space with therapy, and care is limited or ad hoc, to
competition by attracting and retaining Apple Health,86 a new platform that will a proactive model in which engagement
actively engaged customers. interface with electronic health records tools and support bolster both patients and
(EHRs) at 12 US hospitals.87 health care providers.91 Effective patient
A challenge is developing engagement engagement could improve self-care
•• Amazon joined with J.P. Morgan Chase
strategies, products, and services that could and help achieve better outcomes; many
and Berkshire Hathaway to establish
bridge gaps between providers, payers, and health care stakeholders are investing in
an independent, not-for-profit health
patients and work across myriad consumer solutions to address this issue. In addition,
care company for their one million US
segments.81 In some cases, consumers some researchers are trying to understand
employees. The trio’s goal is to improve
are taking matters into their own hands what motivates individual patients and are
health care services and cost efficiency for
by subscribing to tools such as b.well, a working on developing tailored solutions
their employees. With these corporations
personal health app that allows individuals that incorporate individualized goals.92 For
being closely monitored in the market,
to safely and securely store, manage, and example, women typically are the drivers
their success could act as a model that
share their medical records and family of health care spending—not only for their
other businesses can embrace.88
health history in one place; view financial own health but for that of their spouses,
information about their benefit plan, co- •• Walmart signed a deal with Anthem, one children, and aging parents. Yet most
pays, deductibles, and prescription costs; of the United States’ largest insurers, to traditional engagement practices have not
integrate and sync wearables and other entice more Medicare enrollees to buy been designed with women in mind.
self-reported data to track sleep, fitness, over-the-counter medications and health
nutrition, and more; and take a personalized supplies at its stores.89 Even with a wealth of new digital tools
health assessment and use genomic and buy-in from governments, providers,
•• Amazon rolled out a line of private label
screening to learn how to make healthy and payers, establishing and sustaining
over-the-counter medicines, the Basic
decisions.82 consumer relationships remain a challenge.
Care line, and is building a business
Among hurdles to overcome: providers
selling a wide array of medical supplies to
Adding another wrinkle to patient and payers will need to boost the currently
doctors, dentists, and hospitals.90
engagement—and introducing a major low levels of health literacy and find more
disruptor into the health care value chain— effective ways to motivate or “nudge”
Beyond guiding health care purchases,
is the well-funded market entry of non- consumers to take ownership of their
patient engagement strategies may
traditional companies from the consumer, health (see sidebar, next page). Unlike many
positively influence patient behavior,
retail, and technology sectors, as well as employer-provided health plans, the current
one of the key components of disease
increased activity in the retail pharmacy US Medicare and Medicaid health systems,
management amid an increasing prevalence
space.84 The rise of these alternatives for example, have no financial penalty for
of chronic conditions. There is emerging
to traditional providers and payers was consumers who make lifestyle choices that
support for moving away from a reactive
particularly notable in 2018: negatively impact their health (e.g., smoking,
approach to chronic care management, in
overeating, excessive alcohol consumption).
172019 Global health care outlook l Shaping the future
“Nudging” toward better health93
No matter how effective a medication, Sometimes this engagement requires a team embedded within a health system.
protective a vaccine, or beneficial a little “nudge,” a change in the way choices Led by Dr. Mitesh Patel, professor of
lifestyle modification, clinicians must are presented or information is framed Medicine and Health Care Management at
recommend a treatment and patients that alters people’s behavior in a the Perelman School of Medicine at the
must follow through on it to achieve predictable way without restricting choice. University of Pennsylvania, the Nudge Unit
desired health improvements. But both For example, small changes within an EHR uses behavioral economics and
traditional and precision medicine have a can lead to significant differences in the psychology to design and test approaches
“last mile problem” involving patient way clinicians order tests and treatments. to steer medical decision-making and
behavior change. The annual cost of Similarly, social networks can give subtle behaviors toward higher-value and
medication nonadherence in the United nudges that influence how individuals eat improved patient outcomes.95 Among the
States is estimated at more than $250 and exercise. Nudge Unit’s projects:
billion, and most post-surgical hospital
readmissions are due to patient The Penn Medicine Nudge Unit, created in
nonadherence to discharge protocols.94 2016, is the world’s first behavioral design
Enable choice Guide choice through changing defaults
Prompting clinicians to make an Changing health system-wide
active choice in the EHR led to a EHR prescription default settings
35%–40% increase in ordering increased generic prescribing
influenza vaccination, rates from 75% to 98%
colonoscopy, and mammography
Guide choice through incentives Frame information
Framing financial incentives Displaying prices for inpatient
as a loss increased physical laboratory tests impacted
activity goal achievement clinician behavior differently
by 50% among overweight based on how they were
and obese adults targeted and framed in the EHR
Source: Penn Medicine Nudge Unit website, http://nudgeunit.upenn.edu/about.
Effective nudge projects need buy-in. The design also needs to be scalable to a
Physicians want to have autonomy over large population, not just a handful of
how they practice medicine, so they patients; that calls for top health system
should be part of the process and have leadership at the table, as well as the IT
input on the design of the intervention. team.
182019 Global health care outlook l Shaping the future
Stakeholder considerations helps consumers compare cost and quality
As health care becomes more “shoppable” information and enables them to make Digital’s potential
and consumers increasingly pay a larger
percentage of their care with their own
confident decisions about health care in a
manner that more closely mimics alternative
in “heart of the
money, enhancing patient experience is purchasing and customer service models business” operations
regarded as a potential driver of hospital like retail. Technology that lives out
performance. Hospitals’ reimbursements front—where patients, members,
are increasingly tied to quality performance Given the new emphasis on patient and customers can see it—can help
metrics that capture patient experience as experience as a core element of care quality a health care organization shine. But
well as clinical outcomes, and many public and value, health systems should consider the technology at the core—which
and private payers have begun to recognize investing in the tools and technologies to most people never see—makes an
patient experience as a core element of better engage patients and enhance patient organization work. Back-office
quality.96 experience. Also important is delivering systems, and the quality of their
educational insights to inform patient connections with front-end
Being patient-centered and taking steps decision-making and behaviors. Possible enterprise functions, are the critical
to engage patients in their own health solutions include medical information and infrastructure that make pricing,
care is not simple, but it is seen as an pharmacovigilance, nursing educational product availability, logistics, quality,
industry imperative. Organizations should support, and between-visit care.97 financials, and other “heart of the
understand how consumer behaviors business” information available
and expectations are transforming care Investing in digital innovation and where it is needed. Although health
delivery and adopt a more consumer-driven, transformation care organizations are approaching
retail mind-set and approach—with a the digital mandate from numerous
focus on greater convenience, service, and “Being digital” angles, one issue remains
support. Again, women use their family and Major advances in wireless technology, consistently important: harnessing
social networks to recommend services miniaturization, and computing power are emerging technologies to enable
and physicians, yet health systems don’t fueling an exponential increase in the pace core systems and back-office
routinely take this into consideration when and scale with which digital health care processes to reinvent how daily
planning their engagement strategies. innovations are emerging98 and impacting work gets done.99 Some provider
both clinical and business operations (see organizations are already taking
Both providers and payers may need sidebar). These advances are also driving an steps toward using machine learning
to re-orient themselves around greater increase in the expectations of consumers and robotic process automation
transparency—of costs, quality, processes, that “going digital” is not enough—“being (RPA), cloud-based
and services. Organizations also should digital” appears to be the new necessity for software-as-a-service (SaaS)
more effectively communicate the value all health care organizations. offerings, and predictive tools to
of products and services in a way that improve two primary core functions:
revenue cycle and supply chain.100
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