The key players in the global healthcare ecosystem all have high expectations for the future: the industry believes that revenues and profits will increase, governments and funders expect more job opportunities and higher standards of welfare to be delivered at lower costs, while patients are looking for improved care and treatment methods. However, there are massive challenges to overcome in order to meet these growing demands while maintaining affordability.
Challenges ahead
Healthcare systems are fundamentally challenged by demographics (ageing populations), societal demand and chronic disease. The resulting budget pressure on the healthcare system is huge. Healthcare expenditure as a share of GDP has increased over the last couple of decades, today reaching 10% of global GDP. There is much variance, with extremes such as the USA at 18% of national GDP and Indonesia at 3% – and we know that governments tend to limit the natural growth of healthcare spending to levels they feel are appropriate for economic conditions.
Key trends shaping the future healthcare ecosystem
Against this backdrop we have identified a number of key, interconnected trends that we see shaping the future of healthcare towards 2030.
Budget pressure and emerging markets: The slowing of GDP growth in established markets and continued budget pressure have led international healthcare companies to search for opportunities in emerging markets.
Digital transformation: Digital health innovation has helped support growth in emerging markets while also supplementing existing medical infrastructure in markets such as India. Digital health technologies allow disruptive innovation.
Integrated solutions: Providers will always have to navigate between the willingness to offer the best services and technologies and meeting budget constraints. An innovative way forward is to connect to those developing cutting-edge technologies in order to find smart solutions that integrate their innovations into clinical practice in commercially viable ways.
New technologies: New technologies are entering the market, for example, smart neuroprosthetics enable patients with spinal cord injuries to walk again. Gene therapies have been shown to heal genetic disorders through a single series of interventions, while cell therapies that can replace destroyed functional tissue are having a significant impact on how we treat diabetes and vascular diseases. Sector limits will merge and value creation will change.
Tomorrow’s healthcare ecosystem
Tomorrow’s healthcare ecosystem will be driven by a combination of breakthrough technologies, forward-looking regulatory frameworks, astute entrepreneurship and the availability of risk capital for bold innovations, all linked to willingness to pay for innovation that will drive progress within the overall ecosystem. The willingness-to-pay dimension will need to be strengthened by progress within the system itself in order to appreciate, quantify and measure the value of innovation. An enhanced ability to appreciate the value of innovation will therefore be a key success factor in ensuring a strong flow of innovation.
Implications for players in the healthcare ecosystem
Budget holders should start to capitalise on their deep access to patient data and use prospective data models to better structure patient pathways.
Providers need to rethink the way they structure care pathways and their approach to innovation sourcing.
Medical technology suppliers will have to identify where they want to position themselves within these integrated systems in order to determine the gap and the transformation needed to move there from where they are today.
Pharmaceutical companies can build on their strong knowledge of current and future standards of care, the attached disease and patient pathways, and their understanding of the physician’s point of view on a particular disease.
Case study: Addressing budget needs in India
Hyjyia, an ICT platform provider for electronic medical records (EMR), has been working with the Indian Health Organisation (IHO) to create the Digital Wellness Programme, an ecosystem of providers, payers and corporate consumers, in order to build a new generation of corporate wellness programmes on a subscription-based model.
The platform creates a one-stop shop that brings together basic services around health content and reminders for personal wellness. A number of primary healthcare provider networks have joined the platform to offer first-level consultation services, including appointments, tele-consultations and second opinions, all underpinned by electronic medical record sharing. The platform also provides options for chronic healthcare monitoring, with the ability to buy popular gadgets, including sensors and trackers that can be used to measure progress in fitness activities. More importantly, over time, it creates an online platform for storing digital health records, enabling the development of an online and mobile hub for wellness and personal health access.
Overall, the model allows corporate buyers to reduce medical costs for staff, enhance ROI by formulating more precise health benefit programmes, and improve their overall images as employers. It also creates a unique opportunity to amass personal health records on an online platform, sharing not only through corporate wellness programmes, but also across the network of providers and payers, thereby creating efficiencies in the provisioning and delivery of health services through corporate health benefit schemes.
Case study: Innovative ways of working in Stockholm
With the aim of creating a more efficient and safe healthcare structure in Stockholm, a 10-year investment and transformation plan has been developed. An important part of the plan is the creation of the state-of-the-art New Karolinska Solna (NKS) hospital facility, which will open its doors to its first patients at the beginning of 2017.
To ensure that the new hospital is state-of-the-art not only when it is commissioned, but also in the coming decades, innovative ways of working are required. A high pace of innovation is necessary to drive these new ways of working, meaning that Karolinska University Hospital has decided to invite healthcare industry players to collaborate to develop cost-efficient care production that provides the highest-possible benefits for patients.
A means of achieving this is through the current procurement of medical equipment, and information and communications technology for the new facility. Arthur D. Little has supported Stockholm County Council and Karolinska University Hospital since late 2011 in the procurement of medical technology for NKS. Identifying innovative ways of integrating the competence of future equipment suppliers and developing new business models have been key to procurement.
Karolinska’s clearly stated ambition of taking a truly patient-centric approach to healthcare by developing new and improved care pathways in close collaboration with industry and academia has attracted lots of attention from global medtech suppliers. They have strong incentives to partner with Karolinska, as it will provide daily interactions with clinicians along the various care pathways. This will enable them to achieve a true understanding of unmet needs, and how their own solutions need to be integrated to enable both increased efficiency and greater patient benefits.
Case study: Providing access to gene and stem-cell therapies
In November 2012, the European Medical Agency granted approval for Glybera, the first gene therapy for patients with exceptional cases of lipoprotein lipase deficiency (LPLD). The technology was licensed from the Dutch bio company uniQure BV by Chiesi, a mid-sized, family-owned pharma company based in Parma, Italy. Through its agreement, signed in April 2013, Chiesi has exclusive rights to commercialise both products in Europe and selected other countries such as Brazil, Mexico, Pakistan, Turkey, Russia and the CIS, as well as Glybera in China.
As a gene therapy, Glybera is injected through a one-time course of up to 60 consecutive intramuscular injections. Several follow-up appointments with specialists are necessary to control the efficacy and safety of the healing process. However, compared to the life-long substitution therapy, which is the current method of care and also has significant dietary restrictions, this therapy delivers a paradigm shift in medical benefits, quality of life and potentially lower cost per patient.
Chiesi is investing in another break-through innovation: stem-cell technologies. The company is involved with Holostem, a spin-off company from the University of Modena. Paolo Chiesi, chairman of the board of directors, and Andrea Chiesi, CEO of Chiesi Farmaceutici, are part of Holostem’s management team. The joint venture is currently developing a stem cell treatment for corneal regeneration and the restoration of visual acuity in patients with severe corneal chemical and thermal burns associated with total unilateral or severe bilateral limbal stem cells deficiency. Cell samples are collected from the patients in order to be cultivated and then applied in line with medical procedures.
The introduction of therapies such as Glybera and Holostem will have significant implications on the healthcare ecosystem. Pharma companies will change their revenue model from repetitive treatment cycles of chronic disease to one-time interventions, and consequently need to build a new type of agreement with budget holders. Providers need to interact more closely or even enter new partnerships with pharma companies to ensure the proper application and monitoring of treatments. Routine diagnostics around treatments also need to be established.