the changing landscape of healthcare - demand and funding: current senario and future directions
TRANSCRIPT
Asia Healthcare 2011
THE CHANGING LANDSCAPE OF HEALTHCARE DEMAND AND FUNDING:
Rhenu BhullerVP Healthcare
Frost & Sullivan Asia [email protected]
CURRENT SCENARIO & FUTURE DIRECTION
Most people overestimate the amount of change that will occur
in two years and underestimate the
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underestimate the change that will occur
over ten years”
Bill Gates
The Healthcare World is Changing . . .
A Shift of Focus
The Global Megatrends Will Define Future Healthcare Market
E-World
More from LessWorld of Scarce
Resources
Personal TouchPersonalisation of
Global Megatrends are shaping future of healthcare industry. Healthcare industry will experience increased demand forhealthcare services attributed to growing consumption, which is the result of demographic changes (ageing), change in diseasepatterns (chronic, life long diseases), and lifestyle changes (bad habits).
Globalisation and technological advances will provide healthcare industrywith new tools and products allowing for greatermobility, connectivity, and personalisation.
Preventive/Wellness
Consumer Driven
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Future Global Healthcare Market
Digital & Natural
Convergence
On the MoveUrbanisation &
Increased Mobility
Personalisation of
Products &
Services
Divergent Demographics
Older, Hungry, and Demanding
Consumer Driven
Personalised
Mobile
Connected
Technology Driven
Changing Health Risks
5
Growing Demand for Healthcare Services will Need to be Reciprocated with Increased Supply Resulting in Stress on the System & Opportunities for Change
• Increase in population, aging
• Rural to urban migration
•50% of the world us under 25 years
Changing Demographics
• Increase in life style diseases
• Increase in chronic diseases
•Earlier diagnosis- treating begins at 30 rather than 60
Changing Disease Patterns
•Consumer expectations toward s government
•Private public partnerships
•Emergence of NGOs and patient groups: Important stakeholderPolitical Importance
• Cost• Access• Quality• Interoperability
• Cost• Access• Quality• Interoperability
Healthcare Market DynamicsHealthcare Market Challenges
6Executive Summary
•Change in value system: health is valued more
•Healthcare consumerism: consumers are making decisions about their own care needs
•Medical Tourism
•Preventive healthcare
Changing Consumer Behaviour
•Cheaper drugs, Cheaper diagnostics
•Personalization, genomics, roboticsTechnological
Advances
•New treatments are becoming very expensive
•Generics, biosiimilars as options
•Shift to outpatient / home careCost Pressures
• Interoperability• Interoperability
APAC Healthcare Expenditure at triple digit growth by 2020
G7$6147 billion50% increase 2010-2020CAGR 4.0%
APAC$2927 billion151% increase 2010-2020CAGR 9.2%
Japan$563 billionCAGR 3.0%
Hong Kong$20 billionCAGR 3.2%
South Korea$127 billionCAGR 5.5%
China$1446 billionCAGR 15.5%
BRIC$1958 billion212% increase 2010-2020CAGR 12.1%
USA$3922 billionCAGR 4.6%
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Australia$198 billionCAGR 3.0%
Singapore$23 billionCAGR 9.6%
Malaysia$25 billionCAGR 8.4%
Taiwan$65 billionCAGR 7.8%
India$331 billionCAGR 14.5%
Indonesia$47 billionCAGR 8.1%
Vietnam$31 billionCAGR 14.8%
Philippines$26 billionCAGR 11.5%
Thailand$25 billionCAGR 8.4%
Drivers•Will become diabetes capital of the world in terms of disease burden•Participation of foreign & non-HC companies in HC delivery•2020 HC plan: universal HC access•Urbanization will create super cities: concentration of high consumption
Drivers•HC expenditure as % of GDP: rise from 5.2% to 8%•Influx of diagnostic equipment and private hospital•Expansion of eye care hospitals & centers due to domestic & foreign interest
Drivers•Disposable income rising: reach $6 billion by 2014•HC privatization & govt plans will lead to more private & public hospitals•Urbanization growing by 3.3% per year
Healthcare Expenditure in China, India, and Vietnam will grow the fastest within APAC over the next 10 years
China Healthcare Expenditure ($ Bn)
India Healthcare Expenditure ($ Bn)
Vietnam Healthcare Expenditure ($ Bn)
Common Drivers: expansion of middle class, public private partnerships, rising chronic disease burden, aging populace
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Restraints• Majority of population still lives in rural
areas—far below OECD average for HC infrastructure & resources
Restraints• Majority of population still lives in rural
areas—far below OECD average for HC infrastructure & resources
Restraints • Approx. 89% of population lacks HC
access• Dearth of primary care physicians• Low implementation of IP protection
could limit pharma & biotech industry investment
Restraints • Approx. 89% of population lacks HC
access• Dearth of primary care physicians• Low implementation of IP protection
could limit pharma & biotech industry investment
Restraints • Approx. 66% of population lives in
rural areas, lacks HC access• HC quality and infrastructure still low
quality with outdated equipment• Majority of health consultation are paid
out-of-pocket
Restraints • Approx. 66% of population lives in
rural areas, lacks HC access• HC quality and infrastructure still low
quality with outdated equipment• Majority of health consultation are paid
out-of-pocket
CAGR: 15.5%
0.0
200.0
400.0
600.0
800.0
1000.0
1200.0
($ Bn)
0.050.0
100.0150.0200.0250.0300.0350.0
($ Bn)
0.05.0
10.015.020.025.030.035.0
28% of the Japanese population will be 65 years by 2020
To
tal
Po
pu
lati
on
(m
illi
on
s)
•Large senior generation: Japan, Australia, South Korea, Singapore—have the highest per capita GDP expenditure
•Large young generation: Philippines, Indonesia, Malaysia, India, Vietnam--young workforce will fuel rapid GDP growth
1000.0
1200.0
1400.0
1600.0
7. China11. India
14%67.7%18.3%Australia
11.4%72.9%15.7%Korea
22.9% 64%13.1% Japan
73.6%
64.9%
77%
15-64 yearsCountry
0-14 years
65 years and above
Singapore 13.8% 9.2%
India 29.7% 5.5%
China 17.6% 8.9%
14%67.7%18.3%Australia
11.4%72.9%15.7%Korea
22.9% 64%13.1% Japan
73.6%
64.9%
77%
15-64 yearsCountry
0-14 years
65 years and above
Singapore 13.8% 9.2%
India 29.7% 5.5%
China 17.6% 8.9%
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Proportion of Population Age 65+ (%)
To
tal
Po
pu
lati
on
(m
illi
on
s)
Source: UN, Frost & Sullivan
-200.0
0.0
200.0
400.0
600.0
800.0
0.0 5.0 10.0 15.0 20.0 25.0 30.0
1. Japan
Median age: 48
2. Hong Kong
3. Australia
4. South Korea
5. Singapore
6. Thailand
8. Vietnam
9. Malaysia
10. Indonesia
12. Philippines
4.7%61.1%34.3%Bangladesh
4.3%61.1%34.6%Philippines
5%65.4%29.6%Malaysia
66.5%
61.1%
73.6%
4.3%34.6%Vietnam
6.1%27.3%Indonesia
China 17.6% 8.9%
4.7%61.1%34.3%Bangladesh
4.3%61.1%34.6%Philippines
5%65.4%29.6%Malaysia
66.5%
61.1%
73.6%
4.3%34.6%Vietnam
6.1%27.3%Indonesia
China 17.6% 8.9%
While most people are focusing on Baby Boomers – Asia will have a
significant Gen –Y Population
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Urbanization Adds to the Increased Burden of Chronic Diseases
• Increased urbanization has gone hand in hand with the increase in both the incidence and prevalence of noncommunicable diseases (cardiovascular diseases, cancers, diabetes and chronic respiratory diseases)
• Changes in diets (tied to the availability and increased mass marketing of packaged foods and junk foods) and physical inactivity contribute to this higher rate of “lifestyle diseases” among urban populations
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According to the WHO• One in three urban dwellers lives in slums, or a total of 1 billion people worldwide • Urban air pollution kills around 1.2 million people each year around the world, mainly due to cardiovascular and
respiratory diseases.• Tuberculosis (TB) incidence is much higher in big cities. In New York City, TB incidence is four times the
national average. In the Democratic Republic of the Congo, 83% of people with TB live in cities. (WHO)
The Healthcare World is Changing . . .
Changing Requirements
� Avoid paying for unnecessary services
� Help me and my family become and remain healthy
� Ensure my financial security
� Protect my assets from being taken or destroyed
Many Stakeholders, Many Motivations…
PATIENTS INSURERS
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� Get paid for services rendered
� Facilitate Innovation
PATIENTS
PROVIDERS
INSURERS
POLITICIANS
� Stay in office while balancing the budget
� Make health care affordable and conveniently accessible
Changing Focus
In the Past In Future
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A Doctor Centric Approach A Patient Centric Approach
One Size Fits All Approach Personalized Medicine
From...
Fragmented, One-way Patient InfoFlow
Integrated, Two-way
Provider Centric Focus Patient Centric
...To
A modern healthcare system is on the horizon, demanding a paradigm shift
Healthcare Paradigm Shift
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Provider Centric Focus Patient Centric
Centralized – Hospital Monitor De-Centralized – Shift to Community
Invasive Treatment Less Invasive, Image-based
Procedure-basedReimbursement Episode-based, Outcome-based
Treating Sickness Objective Preventing Sickness – “Wellness”
Source: Frost & Sullivan
The Goals in Shifting the Health Focus of the System
Prevention/Wellness
Disease/Care Management
Siz
e o
f Im
pacte
d P
op
ula
tio
n Goal:
Keep People Healthy Longer
Goal:
Keep People Healthy Longer Goal:
Manage or Mitigate
Goal:
Manage or Mitigate
� Early identification and prevention
� Access to new forms of care delivery to improve patient knowledge, self-help and health
� Connection to benefits design to increase coverage for those services which prevent disease and improve health over long term
� Reducing administrative and clinical waste
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Management
Healthy/“Worried Well”
“At Risk” Undiagnosed Chronically IllManaged
Chronically IllUnmanaged
Endof Life
Continuum of Care
Siz
e o
f Im
pacte
d P
op
ula
tio
n
Manage or Mitigate
Risk
Manage or Mitigate
Risk Goal:
Diagnose and
Reduce Treatment
Delay
Goal:
Diagnose and
Reduce Treatment
DelayGoal:
Manage
Goal:
Manage
Goal:
Move to Self-
Managed
Goal:
Move to Self-
Managed Goal:
Informed Decisions
Goal:
Informed Decisions
Source: Frost & Sullivan
The Healthcare World is Changing . . .
The Funding of Healthcare
“One size does not fit all”?
REGULATIONS
• Large variety of local health systems
• Different density and complexity of local private
health market regulation
• Basically high political exposure of health Business
• Legal market entry and shareholding barriers
ECONOMICS
• Differences in individual disposal income according
to local economic situation
• Heterogeneous aging demographics
• Differing range of incentives for individuals and
groups to purchase private health cover
• Common public cost containment efforts with direct
and indirect impact on private health sector
Challenges
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OPERATIONS
• Variety of health business models to be provided
• Efficiency and cost containment requirements
• Dedicated distribution channels and methods as
critical success factor
• Broad range of international skills and capabilities
MARKETS
• Different customer demand (tailor-made vs.
standardized benefits)
• Different levels of customer education and
awareness for value of private health cover
• Different market stages and life cycles (mature vs.
emerging markets)
• Different functions of private health cover
(Duplicate – complementary – supplementary)
Challengesfor health players
Key Markets Healthcare Environments
India China Indonesia Malaysia Thailand Australia Singapore
Aging Population No Yes No Yes Yes Yes Yes
Dominant Distributer ofPHI
Life/ Non Life/ Health
Life/ Non Life/ Health
Life Life Life Health Life
Tax Incentives for PHI Yes Group No Yes No Yes Yes
Restrictions on PremiumRates
Notify No No No No Yes notify
Guaranteed Renewal Some Some No No No Yes
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Portability of PHI policy In Discussion No No No No Yes
Group biz as % of totalportfolio
45% 30% >20% 30% 20% <10% 25%
Minimum BenefitsSchedule
YES NO
PHI as funder of privateproviders
Insignificant Significant
Medical Underwritingallowed
Yes No Yes
A trend towards increasing PPP
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• National health system facing great difficulties of sustainability also in developed countries
while social insurance has long been perceived as a government business, commercial
insurers are actually operating most mandatory schemes in developed countries.
• Clear international trend to increase private sector participation
The Dawn of New Healthcare ParadigmChanging The Practice of Medicine
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Collaboration and Sharing is Essential for the Entire Healthcare Value Chain
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Moving Towards Smarter Healthcare
HOME CARE
INSTITUTIONAL CARE
Current Model: Curative & Provider Focused
Telehealth
Home Monitoring
Aged Care
Smart Homes
Assisted LivingCritical Alarms
Smart Model: Continuum of Care & Patient Focused.
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INSTITUTIONAL CARE
Specialty Clinic
Hospitals
Connectivity
Communication/Voice
Tracking/ResourceManagement
Nursing HomesCommunication/Data
Moving Closer to Home...........
Healthy, Independent Living
Chronic Disease Management
Community Clinic
Doctor’s Office
100%
Assisted Living
HOME CARE
RESIDENTIAL
Qu
ali
ty o
f li
fe
Healthy, Independent Living
Chronic Disease Management
Community Clinic
Doctor’s Office
Assisted Living
Specialty Clinic
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Cost of care per day
$1 $10 $100 $1,000 $10,000
0%
Skilled Nursing Facility
Specialty Clinic
Community Hospital
ICU
RESIDENTIAL CARE
Qu
ali
ty o
f li
fe
Skilled Nursing Facility
Specialty Clinic
Community Hospital
ICU
ACUTE CARE
Towards a Patient Centric Care Delivery Model
Home as the Hub:
� The home and other local settings will grow significantly as
a locale of choice for care delivery
� Delivery system will expand to include community and
family resources
Integration:
� Medical services are integrated
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� Medical services are integrated
with wellness activities to
provide overall care delivery
Customization:
� At multiple levels (health plans, interaction with caregivers,
individual care pathways, communications, etc.)
� Driven by patients
What Will the Future Look Like? “More miles for staying healthy”
Healthcare increasingly data driven and customized
Healthcare more like other service industries
Globalized care delivery
New care models focused on collaboration, information exchange/awareness, achieving health outcomes, especially with chronic disease care
Increased development of standards of care and incentives to adopt them
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to adopt them
Greater need to document process of care and document outcomes ���� Tracking of care, results
Increased patient empowerment to understand and manage disease via remote monitoring and mobile apps
Increasing influence of payors
More “generics” – technologies providing same value at lower price, stripped down feature sets
Move away from fee-for-service to bundled payments based on quality of care ���� Increased use of analytics, care protocols
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Carrie Low
Corporate Communications
Frost & Sullivan Asia Pacific
603 6204 5910
Donna Jeremiah
Corporate Communications
Frost & Sullivan Asia Pacific
603 62045832