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By Arab Health Magazine Staff
Payers are increasingly in the driving seat when it comes to health system reforms. Can their reforms provide more opportunities in the Middle East’s healthcare sector?
Healthcare systems around the world are faced with rising demand and associated spending fuelled by ageing populations and the growing prevalence of chronic diseases and their comorbidities among other challenges. “Health systems are,” says Abdelhamid Suboh, a partner and the life sciences and healthcare industry leader for the Middle East at Deloitte, “looking at spending 10.5% of GDP with that number predicted to continue to grow.” The Middle East, and the GCC in particular, spend even more on average. As such, Suboh highlights the need to make significant changes to the way healthcare sectors operate in order to ensure quality of care, improved patient outcomes and realise significant cost savings. These changes present a number of opportunities, not simply for incumbent healthcare providers but consumer electronics manufacturers as well.
Suboh argues that the current model of ‘break and fix’ cannot be sustained in the face of increasing demand and increasing healthcare costs. The model, he says, must change to one centred around prevention and the promotion of healthy lifestyles in order to reduce the burden chronic diseases such as diabetes place on providers.
The current fee-for-service model found in many countries across the world, he says, is not the most cost-effective means of running a healthcare system. Indeed, there are currently ongoing experiments and pilot projects in places such as the United States where fee-for-service has been replaced by an accountable care model where providers are paid a lump sum to keep the population they serve healthy. In this vein, Suboh foresees that healthcare payers will start to exert their influence on providers to prioritise good outcomes over service volume. For example, insurance companies may well adopt a fee structure that pays providers more depending on the outcome. The result of this would be that providers would have a greater financial incentive to reduce the amount of follow-up treatments required, thus reducing the overall healthcare spend. This would also further help to differentiate providers based on the quality of care they provide, something that many complain is hard to do in a market that is heavily driven by upfront cost rather than quality considerations.
The Middle East, in particular, has long focused on volumes rather than outcomes. Suboh explains that even now, health planners and governments are – in general - extremely focused on the number of additional hospitals required to meet rising demand rather than on improving outcomes at existing facilities. A shift towards a model based on preventative medicine, argues Suboh, is beneficial in that it does not generally require additional investment in hospital facilities. There is a need, he says, to “invest in healthy lifestyles and prevention rather than throwing money at building additional hospitals.” There is, he says, “a balance that needs to be achieved between what do we absolutely have to provide here and what are new, innovative approaches beyond the ‘break and fix’ model.” A model centred around preventing “the break” through the promotion of healthy lifestyles will not only improve people’s health but also reduce the costs of healthcare.
As such, governments should be focusing their efforts on reducing smoking, encouraging weight loss and promoting healthy lifestyles. This shift would likely help governments reduce their healthcare spend while also opening the door to new market entrants. Indeed, medical device makers are increasingly aware that their businesses are ripe for disruption by more consumer focused brands.
As governments begin spending more on promoting active lifestyles and insurers look to incentivise their policy holders to reduce their risk of lifestyle related illnesses, manufacturers of personal fitness devices will likely see further growth in their customer base. Indeed, there is mounting evidence that consumer electronics companies are spending more of their research and development time looking into healthcare, with a number of companies launching smart watches with extensive fitness tracking capabilites and reports about Apple looking to incorporate blood sugar monitoring in a future iteration of its relatively new Apple Watch product.
Established healthcare companies are also looking to leverage their consumer divisions in order to take advantage of a shift to prevention that many see as being inevitable. Indeed, Philips were present at Arab Health in January with a number of technologies based around innovations that came from consumer lines such as virtual reality.
Regarding the GCC, there are, agrees Suboh, clear ways of adapting the market to make better use of resources already in place. One such method is the formalising of a ‘hub and spoke’ model whereby governments agree to send their patients to specialist facilities in other countries. In practice, this would mean that facilities such as SIDRA in Qatar and Cleveland Clinic Abu Dhabi would formally serve anyone in need of highly specialised services across the GCC rather than have governments and providers attempt to replicate specialised services in each country. Not only would this reduce expenditure on infrastructure but would reduce the demand for medical talent that is already scarce in the region. Formalising such an arrangement would also help in attracting and retaining world class talent by increasing the complex case load at the centres, allowing specialists to practice their skills – something many find difficult in countries with skewed demographics and relatively small numbers of complex cases.
Suboh also highlights the potential of telemedicine as a means of increasing healthcare coverage across the GCC as well as helping to connect patients with world leading physicians in other parts of the world as needed. Indeed, an Italian surgeon recently performed an operation on a patient in Dubai from his home hospital in Milan. Building out that potential is vital, says Suboh. As such, rather than funnelling money to new building projects, further investments in IT infrastructure would potentially have a greater effect on the provision of care in the region.
In addition, governments and providers should, he argues, take more steps to formalise cooperation between providers. Having a universal patient record for example, would allow physicians at any hospital to see a patient’s entire medical history, the tests they’ve had and their results, reducing the number of unnecessary tests performed. Suboh cites the small-scale collaborations of this sort in Dubai as something to be replicated on a much larger scale.
“In general, I believe the burden on public sector providers in the GCC needs to be balanced with the private sector. We’ve seen that with privatisation.” Suboh explains that balancing the burden of provision between the public and private sector can perhaps best be achieved through public private partnerships (PPP). “We have seen that with the public sector inviting the private sector to run their hospitals.” SAGIA, says Suboh, has around 300 hospitals and implemented a PPP model for their operations with a revenue sharing model – something he describes as a “really positive” step.
Asked what governments in the Middle East can do to drive more research and development to happen within the region, Suboh cites the work already being done by SIDRA and HAMAD in Qatar who are both investing heavily in the field. However, more is certainly required, a burden that primarily falls on the public sector despite the private sector also playing a role. The development of PPPs could, perhaps, free up public resources that could be diverted to building genuine research and development centres in the region. This would also likely be helped by deeper cooperation between countries and regulators across the region.
Suboh’s outlook for the Middle East and GCC is – overall – a positive one. However, he stresses the need “for more focus on the patient experience, the quality of service, more involvement from the private sector and there is a need to look at spending more wisely.” His prescription for the Middle East is one that, if implemented fully, would likely open the door to a great deal of new players in the market. Payers, he continues, ought to be the key drivers of these changes. Indeed, they are perhaps best placed to influence the behaviour of healthcare providers, especially in the private sector where insurance companies now wield more power than ever to influence pricing. It is payers, he says that can provide incentives to cut costs and look at improving care outcomes while reducing patient volumes.