Better care

Healthcare has always faced huge challenges. Because it relates to their health and wellbeing, consumers are more passionate about this sector than any other. Every year, the sector faces new challenges, and must find new and innovative ways to overcome those adversities. But unlike other, more conventional, industries, healthcare innovation is extremely costly and time-consuming. But it is also vital – not only for the functioning of the industry, but for the quality of life of its consumers. The healthcare industry is unique in that it must find a balance between innovation and accessibility.

A report by Harvard Business Review found spending in healthcare in emerging markets is increasing and “will continue to rise in line with their economic growth”. PricewaterhouseCoopers India estimated the total value of the healthcare sector reached $40bn in 2012. This will mean a phenomenal rise in demand, which will require innovation in technology, delivery and business models.

Technological advances are key to the delivery of healthcare across demographics. Writing in Psychology Today, John C Goodman, a research fellow at the Independent Institute, suggested the industry is “discovering that healthcare markets can give patients transparent package prices and that costs can be controlled – despite a huge increase in demand and enormous technological change (of the type we are told increases costs for healthcare generally). For services as diverse as walk-in clinics and mail-order drugs, we are seeing that price competition is possible and that price competition promotes quality competition as well.”

Technology vs cost
One of the biggest advances in technology has been the rise of personalised medicine. The Mayo Clinic estimates 100,000 deaths in the US could have been prevented with the use of pharmacogenomics. These new, simple DNA tests can determine which patients are suitable for which drugs, or if the treatments might cause them harm.

Karen Dillon and Steve Prokesch, writing in Harvard Business Review, said: “With the cost of decoding an individual’s genome expected to fall in the next two to three years to $1,000, from its current price range of $10,000 to $25,000, the market for genome decoding in developed countries will explode.”

There are many benefits associated with the increased accessibility of personalised medicine; decoding genomes will increase our understanding of the genetic make-ups of diseases, which could speed up the development of new drugs, and these in turn would be more efficient.

Technological advances are key to the delivery of healthcare across demographics

Despite the reduction in costs, the rise of personalised medicine will almost certainly exclude large sections of consumers from taking advantage of the technology – particularly in emerging markets. In fact, the cost of healthcare has been rising steadily, partly because of the costs associated with an aging population, but also due to the cost of innovation.

Medical innovation is often more costly
than other types of technological developments because of stringent regulation and extensive trial periods mandated by most authorities in order to ascertain patient safety. According to the Kaiser Family Foundation, the cost of healthcare in the US soared from $253bn in 1980 to $2.3trn in 2008, and those costs are likely to continue rising.

This is a major issue the industry will have to contend with. An aging population, in the US and Europe in particular, means the number of people being treated for chronic, expensive-to-treat diseases and disabilities is on the rise, increasing the costs and putting pressure on healthcare systems.

As erstwhile fatal diseases such as measles are overcome or held in check with modern treatments, disease prevention is the new trend in research and development. According to research by GlaxoSmithKline – and despite the many advances in medicine over the past two decades – chronic diseases, which are usually preventable, account for 75 percent of healthcare spending in the US.

Dillon and Prokesch explained: “More dollars will be spent on vaccines and other means of preventing or reducing the incidence and severity of serious diseases (e.g. cancers) and chronic conditions (e.g. obesity-related illnesses such as diabetes).”

Prevention and competition
There are new paradigms emerging in the way people consume healthcare. New research by PricewaterhouseCoopers (PwC) has revealed the tables are turning in healthcare, with the spotlight focusing on states. The British NHS and American Medicaid were prominent in the news in 2012, and, according to PwC, will continue to dominate headlines.

The PwC report said: “It is almost a cliché to observe that healthcare in America is changing rapidly. Yet the pace of the transformation is certain to quicken in 2013 with the effects of technology, consumerism, budgetary pressures and the Affordable Care Act… converging on a sector that represents nearly one-fifth of the economy.” For PwC, this role reversal in American healthcare is positive, as it brings much-needed stability to an industry that has grown accustomed to uncertainty.

The same PwC research also found consumers’ attitudes towards healthcare are changing fast: “[They] are raising their voice in how they spend their healthcare dollars, coupled with state insurance exchanges, prompting the industry to compete differently.”

Nearly 40 percent of consumers surveyed by PwC claimed they would be willing to purchase insurance at a private insurance company retail store, potentially revolutionising the way insurance companies market their products. Health insurance consumers are also increasingly turning to the internet to find the best deals for their coverage. A total of 41 percent would buy insurance on the provider’s own we site and 23 percent would be willing to turn to well-known retail websites to purchase their insurance.

For more on the Healthcare Awards 2013, please see here