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EIU - Succeeding in a value-based environment: New business models to thrive in the future of healthcare - January 2014
• Value-based health, or the maximising of health outcomes over cost, may hold the answer to streamlining of healthcare provision that will make the dual aims of good health and universal access possible.
• Value is the emerging new currency within health markets.
• The systems and structures needed to deliver value-based healthcare represent a radical departure from traditional approaches on purchasing and delivering care, typically starting with the way care is paid for or bought.
• Value-based healthcare is enabled by a data-driven, evidence-based approach, which can significantly reduces inefficiencies in traditional health systems, by reallocating resources and streamlining operations according to their impact on outcomes.
• Global rates of adoption for value-based practices differ significantly.
Countries that have a large element of outcomes-based purchasing and reimbursement today include the UK, Germany and the US.
• Nevertheless, emerging economies can get a head start in streamlining costs against outcome, by “baking in” the concepts of value-based healthcare as a central organising feature from day one.
• This new dynamic of value-based health presents both opportunities and challenges for various segments in healthcare.
• For hospital providers, we expect pressure on margins driven by lower prices and reduced volumes of activity and inpatient stays, in favour of activity in lower acuity settings, such as primary and preventative care.
• Payors are faced with the need to restructure policies and commissioning schemes to reflect outcomes. Opportunities exist here to streamline costs associated with claims and coverage through proper health technology assessments and evidence-based protocols.
• Suppliers must adapt operations from R&D through to commercialisation, to demonstrate value against directly and indirectly competing products and services. Winners will be characterised by the ability to strike innovative pricing deals, to collaborate with payors and
to make the transition from selling products to delivering healthcare solutions. However, each market presents unique commerical, regulatory and competitive challenges. Robust clinical and commerical due diligence is essential.
• Investors looking for returns will continue to find them in healthcare IT, data analytics, nontraditional modalities of care, preventative care and the emerging markets.