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Sustainability of our healthcare systems Elements of a roadmap Boris Azaïs Director Public Policy, MSD
9th PanHellenic Congress on Management, Economics and Health Policy Athens, December 5, 2013
COST OF CHRONIC DISEASES
We live longer and better, but can we afford it?
Percentage of people aged 65 and over in total population
DEMOGRAPHIC SHOCK RISE OF CHRONIC DISEASES
HEALTHCARE COST EXPLOSION
(*) Excluding US - Source: OECD 1960-2005 (pub. 2007) McKinsey analysis
Causes of death: US, Canada, Western Europe
Various sources, including CDC, Eurostat, WHO.
Source: Kaiser Permanente Northern California commercial membership, DxCG methodology, 2001.
Sources: UNDP, OECD
Costs are set to continue to rise
SOURCE: OECD, WEF, McKinsey; © 2012 WEF
Projected potential healthcare expenditure growth by 2040 Health expenditure as share of GDP, percent
Country 2007 2040 Baseline 2040 High*
United States 15.7 23.8 26.6
France 11.0 15.7 19.5
Switzerland 10.6 16.3 19.1
Germany 10.4 12.5 15.2
Austria 10.3 15.4 21.0
Canada 10.1 13.4 16.2
Belgium 10.0 14.1 18.4
Portugal 9.9 16.2 20.9
Denmark 9.7 9.6 12.9
Greece 9.7 15.3 19.2 Netherlands 9.7 12.1 14.8
New Zealand 9.1 11.7 16.9
Sweden 9.1 10.4 14.8
Norway 8.9 14.5 19.8
Italy 9.1 11.4 13.8
Australia 8.5 12.2 15.7
Spain 8.4 13.5 20.4
United Kingdom 8.4 11.0 13.9
Finland 8.2 11.6 16.5
Japan 8.1 11.5 16.6
Ireland 7.5 10.0 18.0
Average 9.4 13.4 17.6
* High projection applies a 2.5% probability of being on standard deviation higher to each year 3
Impact of the financial crisis on health budget
Source and © OECD, 2013; “Recent Health Expenditure Trends”, November 7, 2013
Average OECD health expenditure growth rates from 2000 to 2011, public and total
Total Health Expenditure Public health expenditure
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Impact of the financial crisis on health budget
Total Health Expenditure Public health expenditure
Health expenditure growth rates from 2000 to 2011, public and private
Greece
Sweden
Source and © OECD: “Compare your Health Profile” online tool http://www.compareyourcountry.org/health/health-spending-change?cr=grc&lg=en
0
5
Healthcare policy is not just about cost containment
Cost
Improving Access to Quality Healthcare without Breaking the Budget
IRON TRIANGLE
SOURCE: © McKinsey and Company
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Our population will need to be kept healthy and productive
SOURCE: UN (2008)
Dependency ratio in selected OECD countries Ratio of working age to inactive people
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Our population will need to be kept healthy and productive
SOURCE: UN (2008)
Dependency ratio in selected OECD countries Ratio of working age to inactive people
“While all OECD countries are experiencing unprecedented demographic change, which has the potential to unravel health and social care systems, a negative outcome is not inevitable.” Rebecca Taylor, International Longevity Centre, London “Health Reform - Meeting the Challenge of Ageing and Multiple Morbidities”, OECD Publishing (2011)
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Elements of a roadmap
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1. Healthcare is the solution, not the problem
2. Focus on the patient
3. Focus on value to improve quality and efficiency
4. Embrace innovation and new business models
5. Promote the Health Economy
6. Adopt Health in All Policies approach
1. Healthcare is the solution, not the problem
Health spending is a crucial investment to promote economic growth
SOURCE: MSD, adapted from “The contribution of health to the economy in the European Union”, Suhrcke, McKee for the European Commission, DG Sanco (2005)
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1. Healthcare is the solution, not the problem
Health spending is a crucial investment to promote economic growth
SOURCE: MSD, adapted from “The contribution of health to the economy in the European Union”, Suhrcke, McKee for the European Commission, DG Sanco (2005)
“While health is a value in itself, it is also a pre-condition to achieve economic growth.”
Council of the EU June 2011
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SOURCE: Transforming Pensions and Healthcare in a Rapidly Ageing World, © World Economic Forum (2009), adapted from Institute for Alternative Futures, Healthcare That Works for All (2009), and the World Health Organization, The World Health Report (2008)
2. Focus on the patient
From Payer/provider-centered healthcare
System designed for disease
Patients are passive consumers of care services
Reactive – aim for cures when symptoms occur
Providers held responsible for advising patients
Episodic testing
Focus on current medical problem
Short visits with little information
One size fits all
To Patient-centered healthcare
System designed for health
Patients are active partners in managing own health
Proactive – aim for prevention and early detection
Providers held responsible for health of population
Clinically impactful biomonitoring
Focus on all risks and needs
Continuous personal relationship with coaching
Customized personal approach
From payer/provider-centered healthcare to patient-centered healthcare
2. Focus on the patient
http://www.newyorker.com/reporting/2011/01/24/110124fa_fact_gawande © 2011: The New Yorker
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In Camden, New Jersey, one per cent of patients account for a third of the city’s medical costs.
3. Focus on value to improve quality and efficiency
SOURCE: Progress Toward Value-Based Health Care Lessons from 12 Countries, © BCG (2012)
Value-based health care delivers better health outcomes at a given level of cost
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3. Focus on value to improve quality and efficiency
SOURCE: Progress Toward Value-Based Health Care Lessons from 12 Countries, © BCG (2012)
Value-based health care delivers improved health outcomes at a given level of cost
“At a time of nearly universal financial austerity, improving efficiency is a far better option than cutting back on services or imposing fees that punish the poor.” Dr. Margaret Chan, Director General, World Health Organization 2010
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3. Focus on value to improve quality and efficiency
Source: “Transforming Pensions and Healthcare in a Rapidly Ageing World”, © World Economic Forum, (2009); Adapted from PricewaterhouseCoopers’ Health Research Institute Survey 2008: You Get What You Pay For (2008)
Which of the following actions would improve the quality of healthcare the most?
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Illustration of the spectrum of technologies to support healthy ageing
Source and © : “ICT & Ageing - European Study on Users, Markets and Technologies”, European Commission (2011)
4. Embrace innovation and new business models
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4. Embrace innovation and new business models
Source: What Value-Based Health Care Means for Pharma, © BCG (2012)
New business models are emerging to address healthcare challenges
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5. Promote the Health Economy
SOURCE: © 2011 WifOR | Prof. Dr. Klaus-Dirk Henke | Improving value for money from a health economics perspective
Health spending in Germany generates considerable indirect and induced value added effects
- The health economy grew by 3.3%
annually from 2000 to 2010 - Every 7th employee works in this
economy - The health economy has reduced the
economic recession by 1%
1) Model calculations based on the 2007 HIOT domestic production (excluding imports and processing of production)
Through the value added of the health economy, additional indirect and induced effects of €386 billion are generated.
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6. Adopt Health in All Policies approach
Our health status is shaped beyond our healthcare systems and is not the sole responsibility of the Ministry of Health
“We have to create an environment conducive to healthier living. […] All sectors of government and the private sector have to be involved; it is not just the responsibility of the Ministry of Health alone.” WHO on World Health Day 2013
“All ministers are health ministers” Sir Michael Marmot, Professor of Epidemiology and Public Health at University College London
21 http://www.euro.who.int/en/about-us/partners/observatory/studies/health-in-all-policies-seizing-opportunities,-implementing-policies
In conclusion: Our policy compass
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We believe that policy making in healthcare should be led by key principles: - Focus on the patient - Focus on outcomes - Reward value across the system - Promote efficiency and drive out waste - Be open to innovation
Νά ’στε καλά! (Be Well!)
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© 2011: Worth1000.com
Boris Azaïs Director Public Policy, MSD
Disclaimer: The views and opinions expressed in this presentation are those of the author and do not necessarily reflect the official policy or position of Merck & Co., Inc. or any of its subsidiaries
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