Emerging health economies need innovation, not Western models

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The report highlights significant underlying financial weaknesses in the health systems of a number of developing countries and it concludes that, instead of looking at established ways of working, emerging health systems need to seize the opportunity to develop new, flexible, community-focused solutions.

"Around the world developing nations are struggling to adapt to the changing needs and expectations of a new, emerging middle class," says report co-author Mark Britnell, chairman, KPMG Global Healthcare Practice and partner, KPMG in the UK.

"The last decade has seen a huge explosion in the number of people moving from poverty to financial independence. Over a billion people, with a combined wealth of USD 33 trillion, are now thought to belong to this new population bracket. Such a major demographic shift is putting massive pressure on health systems. We do not believe that they can respond to these challenges by copying what is already out there. To be sustainable they need to find innovative new ways to respond to these changing demand patterns and escalating costs."

Compiled with input from over 70 KPMG member firm clients and health leaders, the report argues that in trying to meet rising middle class aspirations, a number of countries are looking to western-style healthcare models built around high-tech, secondary care interventions. However, the report concludes, the volatile nature of rapidly developing economies means that many of these systems are failing to translate this high cost, hospital-based approach into real value. Instead, countries and systems that are taking a whole systems approach, using community care models and payment regimes that focus on population health improvement, are the ones most likely to be delivering affordable, sustainable, high quality care.

Report co-author, Sven Byl, KPMG's head of healthcare for the Africa region and partner, KPMG in South Africa, says, "As economic momentum increases, governments are investing more to deliver the improved healthcare that newly enfranchised citizens demand. While each country will follow a unique path to healthcare development, it is evident they are facing many similar challenges - delivering higher quality and broader access for sustainable costs.

"We found that in many cases health system architects have focused on one part of the value chain, for example low cost estates or well developed care pathways. However, expensive medical technology or inappropriate skill mix has held them back and prevented them from delivering equitable improvements at sustainable cost. Those systems that have managed to see the whole jigsaw, put the pieces together in right order and move beyond simply looking at 'low cost per transaction' are the ones who are really reaping the benefits."

Six key areas

The report highlights six key areas that emerging health systems should focus on in order to keep costs down without compromising on quality:

1. People - redesigning roles, processes and training to ensure staff are operating at the full extent of their licence and training;
   
2. Pathways - separating complex and routine work, identifying bottlenecks and moving away from 'batching' treatments;
   
3. Standardisation - demonstrating strong commercial discipline to get the most out of drug and equipment purchasing;
   
4. Environment - focusing on the use of flexible, future-proof, energy-efficient buildings;
   
5. Technology - using technology such as smartphones, point of care testing and portable diagnostics to bring services and decision-making closer to patients;
   
6. Governance - creating management structures that empower frontline staff and encourage experimentation
   

The report also highlights the key role played by 'activist' payers in shaping system behaviours in the most successful low-cost economies:

• System costs are being regulated by the level of coverage and the types of treatment covered by governments and insurers;
  
• Patient behavior is being shaped by financial incentives such as discounted premiums for adopting healthier lifestyles;
  
• Provider proprieties are being re-shaped by contracts, which focus on overall population health rather than specific treatment outcomes.

Britnell concludes, "Strong evidence has emerged to show that the most effective low cost care is being delivered by countries that have taken a whole system view. Getting real value in a market place where aging populations, technological advances and rising expectations are constantly driving up costs requires a radical approach involving a change in the traditional dynamic between patients, payers and providers."

Download the report (PDF).