Issue 5 - September 2011
Local Cures For A Global Crisis
Many nations, both developed and developing, are looking for answers to their healthcare budget crises. A roundtable of experts weighs in on these initiatives.
The challenge of providing high-quality healthcare that is affordable for both governments and patients plagues developed and developing countries alike. But that may be one of the few characteristics different countries share with regard to healthcare. While many countries have reasonable to good data on their healthcare spending and performance, differences in culture, lifestyle, professional training, reimbursement and regulation render country-to-country comparisons of questionable value. Regional differences within countries further complicate the quest for useful generalizations and actionable conclusions.
Even if the perfect system could be divined by selecting the best from everywhere, implementing it anywhere would range from painful to impossible. The large number of stakeholders in any country’s healthcare system — patients, providers, government, insurers, regulators — plus the fact that healthcare is an emotionally charged issue means that change is never easy.
But there are some lessons that each country can learn from others, including what developed countries can learn from developing ones about the necessary role of government and the pivotal role of local communities. To focus on some of these lessons, FTI Consulting convened a roundtable of healthcare experts chaired by Mark Malloch-Brown, FTI Consulting’s Chairman, Europe, Middle East and Africa.
In conversation with him were Michael W. Cropp, M.D., President/ CEO, Independent Health; Anne-Toni Rodgers, Payer Capability, Regional Lead — Europe, AstraZeneca; Meg Guerin-Calvert, Vice Chairman and
Senior Managing Director, Compass Lexecon; Vicky Pryce, Senior Managing Director of FTI Consulting’s Economic Consulting practice; Liz Shanahan, Senior Managing Director, Health & Life Sciences, Strategic Communications, FTI Consulting; and Dan Corry, Director, Economic Consulting, FTI Consulting.
Mark Malloch-Brown: I feel I perhaps know less about this subject than anyone else here today. But I was involved in running large international public-development organizations for a decade at a time when communicable diseases and the absence of healthcare investments in developing countries were as salient a pair of development issues as you could find. So I will press you during this discussion to not forget the 2 billion people at the bottom of the economic ladder in our solutions for healthcare coverage worldwide. Meg, what are the underlying drivers for change in healthcare?
Meg Guerin-Calvert: The single greatest challenge for developed economies is the proportion of GDP going for healthcare expenditures in virtually every country. In general, for major Organisation for Economic Cooperation and Development countries it’s somewhere between 8% and 16%. As we have moved through the financial crisis, the rate of economic growth in many countries has slowed or stalled, yet the rate of healthcare expenditure has not. As a result, the proportion of overall GDP consumed by healthcare in many countries is increasing. Depending on the importance of public sector funding, a very high proportion of government budget is allocated to healthcare. And despite that level of spending, certain countries, such as the United States, believe that quality and access achieved do not meet expectations. Those are substantial challenges.
Vicky Pryce: The developing world, where population growth is high, faces huge pressures to provide any kind of sensible healthcare system. At the same time, in some of those countries the emerging middle classes are looking for much more than just the basics.
Michael W. Cropp, M.M.: The cost of care relative to the value created is an increasing challenge that is emerging in every country. Everyone is or should be grappling with how we can afford to provide care for the entire population and get the maximum value. It is quite simply the cost of doing business as a nation, and it has huge economic implications.
Malloch-Brown: Since this is a global challenge, what lessons can we learn from each other? China, for instance, has made good progress against smoking through social marketing. It didn’t have fully developed healthcare options available. Can other countries learn from such successes?
Cropp : I think so. I just visited France, where government statistics show the country spends 11% of its GDP on healthcare. France has compelling statistics to suggest the results are worthwhile. For example, I was struck by the percentage of money spent on the physician component of healthcare overall, and that pharmaceutical spending is overrepresented relative to the United States; hospital expenditures are too. But smokingrelated cancers aside, France stacks up exceedingly well on most of the mortality measures, such as deaths related to diabetes and heart disease.
Anne-Toni Rogers: Many people are taking note of what’s being done by the United Kingdom’s NICE [National Institute for Health and Clinical Excellence]. But while most of the focus is on technology appraisals of drugs and devices, the way they developed clinical guidelines was quite clever. NICE funded the Royal Colleges and the professional associations to produce the guidelines, so the guidelines were being produced for the professionals by the professionals. That has made the guidelines much more likely to be widely adopted. Therefore they are likely to have a greater impact on healthcare overall.
Malloch-Brown: How transferable are practices? Can you easily take them from one country and implement them in another?
Dan Corry: It is very difficult to make sound cross-country comparisons on health expenditure; even if we did have the right figures, would that persuade us that if something worked for France or the United States or wherever, we should change our system to match? I think that’s very questionable. Each system has evolved over a long period of time, which creates significant inertia that makes it very tricky to completely change it. And there may be reasons that it works in one country and not in another. Another challenge for policymakers is that it’s very hard to say what the right answer really is. As economists, we like to know we’ve done our analyses and econometrics so we can tell you the right answer. But in healthcare there are so many complications that make it very, very hard to model well. But progress is being made. So you’re seeing proposals in the United Kingdom for changes in health that some people are convinced would work. Yet there’s another set of people — just as genuine, just as clever — who don’t think they will work. And the public is sitting there thinking, “What’s the right answer?”