20120612 The Future of Healthcare, George MacGinnis


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The Future of Healthcare, George MacGinnis, Global Perspective - New business
models & new channels to market

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20120612 The Future of Healthcare, George MacGinnis

  1. 1. Global Perspective - New business models & new channels to market George MacGinnis June 13th, 2012
  2. 2. © PA Knowledge Limited 2012. Page 2 Diabetes: Most NHS costs wasteful, says Diabetic Medicine The majority of NHS spending on diabetes is avoidable, says a report in the journal Diabetic Medicine. It suggests that 80% of the NHS's £9.8bn annual UK diabetes bill goes on the cost of treating complications BBC 25 April 2012
  3. 3. © PA Knowledge Limited 2012. Page 3 The sustainability challenge is global Regional differences in needs and provision offer different facets of a common problem: • Poor access to healthcare in developing economies • Rising costs associated with aging populations in more developed countries • Rapidly increasing health demand in newly developed economies • Health inequalities a significant factor Health Expenditure as % GDP Life expectancy and years gained 1960-2009 Source: OECD Frequently Requested Data 2011 Source: OECD Health at a glance 2011
  4. 4. © PA Knowledge Limited 2012. Page 4 Plus a return of infectious diseases Plus the expectations of Genetics and Bioinformatics Infectious diseases 1900-1950 Episodic care 1950-2000 Personalised care 2000- Healthcare is evolving
  5. 5. © PA Knowledge Limited 2012. Page 5 Smart homes/ smart grids Community alarms Tracking Biometric monitoring 1990 2010 2030 Wearable monitors Intelligent therapies Personalised and pervasive smart care Technology is opening up new possibilities
  6. 6. © PA Knowledge Limited 2012. Page 6PPT presentation template V1-12.ppt PA sees 3 key themes emerging that are critical for this change: • Creating and deploying stratified medicine • Challenging established structures through commercial model innovation • Including greater patient insight • Changing reimbursement to reward population health Delivery of more effective patient outcomes based on the integration of new technologies, business models and partnerships Patient Centric Healthcare • Removing cost and improved access to new models of healthcare delivery. • Patients becoming active partners in care management • Accessing new data and information • Developing eHR, medical devices, virtual health and wider technical infrastructure Effective use of connected technologies is enabling a shift from curative/reactive healthcare to prevention and health management Intelligent Health Delivering health reform to create healthier communities and maintain universal access Healthcare Reform • Keeping universal access affordable • Re-organising health services around people’s needs and expectations • Securing healthier communities
  7. 7. © PA Knowledge Limited 2012. Page 7 Attention will focus on quality and outcomes The hospital has a key role in a decentralised system, offering complex care, delivered by multi- disciplinary teams, using state of the art equipment and services Where possible, care moves closer to the patient - clinics provide an increasing array of minor procedures, visiting nurse and other services take care into the home, telemedicine provides access to experts Telehealth will become the ‘CRM’ of the healthcare industry, facilitating a shift towards prevention and health management, and enabling a whole new doctor-patient relationship
  8. 8. © PA Knowledge Limited 2012. Page 8 Reform is driving providers along a staged move to new models Maximizing efficiency of current operations Managing key business risks Optimising population health outcomes • Improving referral rates • Maximising clinical throughput • Reducing length of stay • Reducing healthcare acquired infections • Reducing re- admissions • Managing self- insured populations • Payment for outcomes • Accountable care • Public health The challenge is developing capability ahead of the reforms
  9. 9. © PA Knowledge Limited 2012. Page 9 New innovative collaborations mean breaking the boundaries between key stakeholders… GovernmentsGovernments RegulatorsRegulators PayersPayers PatientsPatients CliniciansClinicians Life Sciences Life Sciences ProvidersProviders New entrants ICT Media New entrants ICT Media ProfessionsProfessions
  10. 10. © PA Knowledge Limited 2012. Page 10 Targeted care: Paying for cures rather than treatments The drug-device combination is becoming increasingly important in managing a transfer of risk and adding value: • Biomarkers used to identify patients • Offers added value in competition with generics ‒ Outcomes-based payments already used in novel, high-value cases ‒ Evidence shows positive benefits for long term therapies in hypertension • New technologies opening up further possibilities
  11. 11. © PA Knowledge Limited 2012. Page 11 New entrants are attracted by health reforms mobile/ medical device mobile network patient clinician clinician Healthcare reform is attracting the attention of global players as connected health drives convergence between industries within healthcare: • Pharma – looking to find a new ‘value add’ • Mobile – opening up the last untapped enterprise market with capabilities in meeting consumer demand • Utilities – looking for value adding service opportunities through smart networks • Insurance – looking to move to new business models. • Media/Entertainment – bringing the customer revolution to healthcare PHS operator care provider
  12. 12. © PA Knowledge Limited 2012. Page 12 Increased risk if untrained user vs. trained/ professional intervention Understand how partnering can drive added value Connectivity Hosted provider Data gathering Interventions made by expert third parties Time critical interventions Increasing levels of integration of telecoms functionality. Lower entry barriers: less regulation, consumer led, focus on linked rather than integrated service provision High entry barriers: heavily regulated, limited role for consumer led decision (reimbursement, teleco, medical device) There is value in addressing these issues ...
  13. 13. © PA Knowledge Limited 2012. Page 13 PPT presentation template V1-12.ppt Developing new markets
  14. 14. © PA Knowledge Limited 2012. Page 14 What makes your customers buy? Payers of all types are increasingly looking for great outcomes while investors typically just focus on the protectable asset Your business model needs to address: • What drives the benefits, and who gains from the service? • What would they need to make a decision to move to mainstream use? • Can they afford it? • How does this fit? Does this work alongside established care pathways and day-to-day activities? Does this mean they are they looking for a service or a piece of technology? Will you need partners to succeed?
  15. 15. © PA Knowledge Limited 2012. Page 15 Using early reforms to build capability Maximizing efficiency of current operations Managing key business risks Optimising population health outcomes • Grant-funding remains a key driver in connected health • Some limited opportunities based on maximising fee- for-service opportunities • Many systems now include penalty charges for avoidable re-admissions • Self-insured populations in some countries are a potential focus • Managing ‘high- intensity service users’ has cashable potential • Cost of service will be increasingly important • Patient/person mobility a key issue in benefits realisation
  16. 16. © PA Knowledge Limited 2012. Page 16 Exploiting the dynamics of different markets There are opportunities to build business arising from: • Focusing on unregulated markets such as wellness • Identifying where the user is the payer and is able to pay • Looking at sectors that don’t need the same burden of proof • Targeting areas with strong clinical leadership • Building volume through consumerisation of medical offerings
  17. 17. © PA Knowledge Limited 2012. Page 17 Regional differences exist, creating opportunities for new offerings Regional differences in need, reimbursement, regulation and infrastructure offer opportunities to incubate a business while waiting for reforms elsewhere US: Highly regulated. Hospitals have significant power. Policy is moving towards entitlement reform and providers looking to get ready for the future while maintaining revenues. Gulf: Emerging market for health infrastructure/ regulation. Mix of social provision & powerful consumer base including non- nationals. Growing markets in medical tourism. India: Relatively few regulatory restrictions: Strong growth of mobile technologies. High appetite for innovation. Powerful consumer base developing while also having pressing issues of access to basic care. Africa: Focus mainly on basic health needs: infectious diseases, childbirth and nutrition. Poor access to care, much of which is donor funded. Little regulation and significant supply chain issues. EU: Highly regulated. Public policy led health with significant variations. Some countries with a significant eHealth infrastructure.
  18. 18. © PA Knowledge Limited 2012. Page 18 Closing thoughts Reform is triggering a modern industrial revolution in healthcare: • Evidence-based and collaborative care models are forcing a reorganisation in health, shifting power from individual clinicians to payer-providers. • In a world where governments and payers are looking to shift risk to providers and their suppliers, demonstrating actual outcomes is becoming as important as the initial, pre-market evidence. • Innovative commercial models will become one of the main engines for growth, combining health know-how, technology and the ability to service large individual customer-bases. • Cost and the need for up-front investment remain significant that health systems are looking to suppliers to address. • Ahead of reform, niche strategies offer the possibility of early returns.
  19. 19. 01514-4 How to contact us for more information Los AngelesLos Angeles BeijingBeijing CopenhagenCopenhagen Stockholm Oslo Dublin MadisonMadison DenverDenver New DelhiNew Delhi Utrecht Frankfurt Munich Frankfurt Munich Buenos AiresBuenos Aires BangaloreBangalore DubaiAbu Dhabi PA office Key Principal office PA office Key Principal office Wellington London Cambridge Belfast Birmingham Edinburgh Manchester UK: Boston New York Princeton Washington, DC George MacGinnis 123 Buckingham Palace Rd Direct Dial: +44 20 7881 3784 London SW1W 9SR Cell: +44 7880 743 189 United Kingdom www.paconsulting.com george.macginnis@paconsulting.com Ireland Embassy House Herbert Park Lane Ballsbridge, Dublin Tel: +353 1 668 4346 Fax: +353 1 668 1771 www.paconsulting.com For further information e-mail: healthcare@paconsulting.com Corporate headquarters 123 Buckingham Palace Road London SW1W 9SR United Kingdom Tel: +44 20 7730 9000 Fax: +44 20 7333 5050 Subscribe free to PA’s Impacts newsletter at: www.paconsulting.c om/healthcare