Global expenditure on healthcare is expected to grow to $9.5 trillion in 2018 from $7.6 trillion in 2013, according to forecasts based on WHO data. Healthcare expenditure is the sum of all expenses for products and services related to healthcare in a nation.
It includes expenses for drugs, therapeutic procedures, emergency health services, and public service initiatives like family planning, disease prevention, and nutrition. Healthcare expenditure is an important indicator of the development status of a nation. It informs important decisions related to policy, aid, and investment. Furthermore, the size, growth rate, and nature of healthcare spending in a nation is a critical driver for industries like pharmaceuticals, insurance, and medical care.
This growth will be driven by an aging population and associated chronic diseases, innovative clinical advancements, and rising technology and labor costs, according to Deloitte’s report, 2017 Global Health Care Outlook.
“”Today’s health care demand and cost challenges appear likely to persist in the near-term, if not longer. Stakeholders need to address these risks to gain significant clinical and operational improvements,” said Abdelhamid Suboh, Consulting partner and Life Sciences & Health Care Industry Leader at Deloitte in the Middle East.
“Finding a path forward that works for all stakeholders will be difficult but necessary to provide high-quality care and services, equitable access, and optimal outcomes for patients at an affordable cost.”
Additionally, the rapid increase in healthcare spending is dramatically improving access to healthcare worldwide. The U.S. has by far the highest healthcare expenditure. Europe, too, is a major market, with the five largest countries, Germany, France, U.K., Spain, and Italy. Even China and India, which together account for over a third of the global population, are amongst the highest growth rates for healthcare expenditures in the world. Established players, disruptive entrants, and governments are developing new solutions and approaches to improve care access and quality, and to control costs.
Lacking definitive measurement, results to date appear mixed; however, according to a report, stakeholders that focus on five key considerations in 2017 can keep moving forward:
- Cost: The world’s major regions are expected to experience health care spending increases from 2.4 percent to 7.5 percent between 2015 and 2020. Providers finding it difficult to gain further cost and operational efficiencies should turn their attention to more transformative initiatives to bend the cost curve.
- Care Delivery: Lack of access to basic health care services and variations in care quality are persistent problems in many of the world’s regions. Today’s health challenges are complex and interrelated so care delivery models that use a multi-pronged and collaborative approach are more likely to yield positive results.
- Innovation: Robotic surgery, 3D printing, implantable devices, and other digital and technology-enabled innovations that target prevention, monitoring, and treatment are showing potential to improve outcomes and reduce costs. Health care leaders should consider building ecosystems that embrace non-traditional players and knowledge sources outside their own four walls.
- Operations: Public and private health systems are likely to implement new business and clinical operating models to deliver scalable, efficient, and high-quality care, and to reduce waste, redundancies, and costs that threaten system sustainability. Just like commercial enterprises, health care organizations should invest in tools and processes (e.g. EMR systems and Data Analytics) to better understand their target markets and customer segments, and improve the patient experience to engage more effectively with today’s active and informed health care consumers.
- Regulatory Compliance: Health care is one of the world’s most regulated industries, with laws and policies addressing clinical quality and safety, cybersecurity, counterfeit drugs, and corruption. Taking a standardized, consistent approach to compliance planning, execution, and monitoring makes good clinical and business sense in today’s highly regulated, interconnected global health care environment.
“Without exception, health care systems around the globe should continue to source and implement strategies that can help improve outcomes and hold the line on costs,” said Suboh. “While there is no such thing as the ‘perfect health system’ there are examples of good performance in most countries which can provide valuable learnings for all health care stakeholders.”