Healthcare
Drivers
All industries are being shaped by the global Megatends of Globalisation, changing Demographics, Climate change and Technology innovation. Shaped by the these trends and now the pandemic, the industry is being shaped by five major drivers:
Demand
Population growth, life expectancy increasing and rising wealth will increase demand for healthcare.
The UK population is 65 million people and will to increase to up to 80 million people in 2050. Although life expectancy has reached 81.3 years, on average only 61.2 years are healthy. In 2016 18% of the UK population was aged 65 and over, expected to rise to 25% of the population by 2046. In the UK, one in seven people aged 85 or over permanently lives in a care home. Over 18 million people suffer from a chronic condition and use healthcare more than twice as much as those without.
This resulted in 312 million UK GP appointments in 2019, the highest ever, with an average waiting time of over 2 weeks. Outpatient visits have doubled in the past decade to 94 million per year.
COVID-19 delays have resulted in 6.7 million people on NHS waiting lists. Long NHS waiting times appear to be pushing people into paying for private treatment. There were 69,000 self-funded treatments in the UK in the final three months of last year - a 39% rise on the same period before the pandemic.
Improved Outcomes
People are now living far longer, but extra years of life are not always spent in good health. They are more likely to live with multiple long-term conditions, or live into old age with frailty or dementia, so needing ‘substantial’ care.
One is the huge challenges of tackling non-communicable diseases (NCDs), such as cancer, diabetes and obesity. Combined, they kill 41 million people each year — 71% of all deaths worldwide.
Medical adherence is a problem, were 50% of medicines are not taken as directed.
BigTech has also set expectations of customer experience and access to information that challenges traditional healthcare approaches.
Sustainability is a growing focus for organisation as public awareness of climate change effects and increasing government initiatives take hold. The NHS has adopted a multiyear plan to become the world’s first carbon net zero national health system.
Skilled Workforce
Health care is a people business, and quality of care depends on having the right professionals. However, an aging workforce and staff burnout are driving shortages.
Even before COVID a third of European clinicians were thinking of leaving. The WHO predicts a shortfall of 2 million EU professionals (15% of the workforce) by 2020.
The NHS has 115k vacancies (9%) and there are 120k in social care. Post Brexit and COVID attrition will increase the challenge.
Innovation
Care is being redesigned around the person not the place and from healthcare to wellness. In the UK this strategy is pursued under the NHS Long Term Plan. This was published in 2019 recognizing concerns about concern – about funding, staffing, increasing inequalities and pressures from a growing and ageing population. As well as the possibilities for continuing medical advance and better outcomes of care. The plan builds on the NHS Five Year Forward View.
COVID-19 has further shifted expectations of health and how and where it should be delivered. Digital healthcare has exploded, the pandemic saw face-to-face GP appointments decline from around 80% to below 10% in a matter of weeks. Personalised medicine, AI and IOMT could all transform diagnosis and treatment. In the private sector up to 25% of capital is spent on technology compared to 6% in the NHS. Inflexible legacy technology is a major barrier to change.
Resilience remains critical on the back of COVID-19.
Financial Stability
Private health care profits have been eroding over time and, in parallel, new entrants (e.g. HealthTech and BigTech) are threatening to redefine the health care business.
Shrinking margins and rising costs (65-70% of costs are staff) are driving public and private health systems to use technology innovations and partnering to improve operational efficiencies and reduce expenses.
The NHS ended 2018 with a deficit of £960 million.