The healthcare industry is grappling with significant socioeconomic, structural and clinical changes which have cast in a period of profound disruption, says a PwC research report.
A summary of the research released today noted that healthcare industry is across the globe going through a period of profound disruption. A catalyst is mainly the rebalancing of private and public sectors in the funding of healthcare.
Such rebalancing will certainly be witnessed in South Africa and via the National Health Insurance which is being piloted by the department of health. The NHI is expected to be phased in over a period of 14 years but government has said that a key element of the system, launch of the new central NHI fund, is envisaged in 2014/15.
Indeed government has said the NHI, designed to give all South Africans access to quality healthcare, will change the face of the healthcare sector.
PwC research said the way in which healthcare is financed and delivered is transforming the industry. Etienne Dreyer, an Associate Director within PwC’s Advisory Practice South Africa said “As the healthcare industry adapts to new demands, businesses and governments will have to change the way they deliver and pay for healthcare.”
There is a rebalancing of the public and private sectors in the financing and delivery of care. The dialogue between the public and private sectors is changing, as the global population ages and the prevalence of chronic disease rises in mature and growth countries alike. Both the public and private sectors realise they can’t address these challenges alone”.
While these winds change have some ruction, as witnessed in South Africa, the PwC research said healthcare industry leaders were upbeat in the short term. Most CEOs expect to master the challenges, with 77% saying they are confident of generating higher revenues in the next 12 months, and 86% are confident of doing so over the next three years.
The research said three key trends were transforming the industry and they are common to almost every health system in the world, according to the survey report:
1. There is a rebalancing of the public and private sectors in the financing and delivery of care. The dialogue between the public and private sectors is changing, as the global population ages and the prevalence of chronic disease rises in mature and growth countries alike. Both the public and private sectors realise they can’t address these challenges alone.
2. The healthcare sector is industrialising. Healthcare payers and providers are beginning to manage their operations as organisations in other industries do. Most sectors are also using ‘disruptive’ technologies, such as mobile devices and the Internet, to engage with consumers in new ways. Likewise, healthcare payers and providers are following suit.
3. Healthcare is becoming a precision-based industry. With advances in geonomics and mass customisation, the healthcare industry is gradually moving away from population-based care to personalised care, with the ‘right treatment for the right person at the right time’. Precision medicine is still in its infancy. But it will eventually allow practitioners to prescribe drugs based on patients’ genetic profiles, thereby eliminating inappropriate or unnecessary treatments, reducing the incidence of adverse reactions, and ultimately, improving health outcomes.
Dreyer said “For South African healthcare organisations, the impact of new markets in Africa and a highly competitive domestic market has resulted in several new product offerings, geographic expansions and mergers/partnerships occurring”.
“With the approach of the National Health Insurance (NHI) legislation in the pipeline, healthcare organisations and their CEOs are following the global healthcare trend of innovating and providing solutions that will differentiate them from their competitors and position themselves for an active role in the NHI and across the African continent.”
The report said a 72% of healthcare CEOs surveyed were worried about the recent economic uncertainty. “They are also concerned about over-regulation. The majority of CEOs (79%) are generating anxiety about how governments will respond to debt and deficits”.
The report noted that last year 84% of CEOs in the healthcare sector said they were planning to cut costs. This year, the same number said they had implemented costs reductions over the past 12 months.
CEOs in the healthcare sector realise they’re facing major challenges, said the report. “The pressure to provide better, faster and cheaper care is mounting as the world evolves demographically, socially and economically. Patients are also becoming more demanding, as consumerism takes hold”.
But it’s also clear from their responses that CEOs foresee future growth and know what’s needed to thrive amidst this turbulence. Dreyer concludes: “They must make their organisations more agile, more appealing and more economically viable. And they’re working hard to achieve these goals.”