The Future of healthcare in Europe
Code:
D27
Primary project information
Lead:
Economist Intelligence Unit
Type of activity:
A report from the Economist Intelligence Unit
Date of Publication:
2011
Summary:
The future of healthcare in Europe is an Economist Intelligence Unit report, sponsored by Janssen Pharmaceutical Companies of Johnson & Johnson. It looks at the financial challenges facing healthcare today and likely trends in healthcare development to 2030. To research this report, the Economist Intelligence Unit surveyed the literature and data available on Europe’shealthcare systems, and conducted 28 in-depth interviews with leading experts in the field. The data and expert insights were then analysed to define trends likely to impact the direction of healthcare in the next two decades. Finally, the Economist Intelligence Unit developed five scenarios, each a distillation of a school of thought on healthcare reform. The intention is to use these scenarios as a policy-neutral set of platforms upon which some degree of agreement can be reached about the future direction of healthcare.
Financed by:
Janssen of Johnson & Johnson
Budget:
N/A
Research area/market/industry/sector:
health sector,healtcare
Main report (full title):
The future of healthcare in Europe
GRAND CHALLENGES
Economic Challenges:
According to the World Bank public expenditure on healthcare in the EU could jump from 8% of GDP in 2000 to 14% in 2030. Healthcare costs are rising faster than levels of available funding. The main drivers of risinghealthcare costs are: ● ageing populations and the related rise in chronic disease; ● costly technological advances;● patient demand driven by increased knowledge of options and by less healthy lifestyles; ●legacy priorities and financing structures that are ill-suited to today’s requirements. Healthcare spending will continue to rise, noonly because of inflationary drivers, but because of growing recognition by policymakers that improved health is linked with greater national wealth. Another way in which healthcare provision can be made smarter is through a change in theincentives provided for medical innovation. The current system rewards innovation that prolongs
life, which made sense when infectious, acute and short-lived diseases dominated the landscape.But as chronic diseases become the dominant concern, the challenge is to develop technologies and treatments that improve patients’ quality of life over the long term. (pp. 6-21)
life, which made sense when infectious, acute and short-lived diseases dominated the landscape.But as chronic diseases become the dominant concern, the challenge is to develop technologies and treatments that improve patients’ quality of life over the long term. (pp. 6-21)
Economic Challenges Shortlist:
public expenditure on healthcare to increase
Societal Challenges:
Patients are increasingly a major cost driver of healthcare systems. This occurs in two ways. First, access to online information about every aspect of health makes individuals more savvy healthcare consumers and more inclined to demand the latest (and likely expensive) medical innovations. Patients make these demands because they suspect that cash-strapped healthcare systems are unreasonably denying them the medical care they need. Secondly, the spread of unhealthy lifestyles is driving up medical costs. Patients will need to take more responsibility for their own health, treatment and care.While patients and the public still believe in the general notion of universal healthcare, they are increasingly sceptical that the system can deliver high-quality healthcare to all. This is why many European citizens are clamouring to have a say in healthcare policy at both central and local government levels. It is also why, at a more basic level, many individuals will have to take more responsibility for their own health, adopting healthier lifestyles and researching alternative courses of treatment on their own. Both trends are being aided by the spread of social media, which have brought an explosion of healthcare bloggers, tweeters and online-savvy groups, such as Kick Cancer and Stamp out Stigma, a UK campaign to reduce the stigma against those suffering from mental illnesses. Groups like these regularly publicise deficiencies in national healthcare systems and demand that government do something about it. Communications technology can help to bring about a greater degree of personal responsibility, fostering the sharing of information between experts and patients, and among patients themselves. Marc Michel,of Greater than One (Europe),believes that, in the next 20 years, Europeans will have their health history integrated into the system with all the different stakeholders involved. (pp. 6-21)
Societal Challenges Shortlist:
Personal responsibility
Technical Challenges:
The pace of innovation in material sciences, genetics, biotechnology, bioinformatics and e-health has escalated in recent years, bringing significantly improved chances of surviving disease. The impact on society is expected to be profound—as profound as the information technology (IT) revolution has been in transforming lives. Professor Hans-Georg Eichler, senior medical officer at the European Medicines Agency (EMA), is among those who expect to see major scientific breakthroughs in medicine. “My hope is that science will produce game changers”, he says. “A game changer would be a drug that cures cancer, or a drug that stays the progression of dementia. These types of products are on the horizon.” Yet few can predict when this next stage of medical evolution will occur. Desirable though it is, this scientific endeavour is costly. Medical expenditure has skyrocketed as pharmaceutical, medical device and biotechnology companies have striven to develop new technologies and treatments, as well as meet high regulatory health and safety standards. Research and development (R&D) expenditure by pharmaceutical companies has grown rapidly over the past two decades. The full cost of bringing new medicines to market rose tenfold between 1975 and 2006, when it reached over US$1.3bn. As Richard Bergström, director general of the Swedish Association of the Pharmaceuticals Industry, explains, “The challenge we face is that there is already a lot of [financial] tension within healthcare systems, which has led to a blockade on access to medicines.” While the financial pressures are real, an indiscriminate clampdown on spending could have farreaching health consequences. Martin Bobrow, chairman of the Muscular Dystrophy Campaign in the UK, explains: “Policymakers need to be reminding themselves that biomedical research is in an explosive phase, and won’t deliver goods if reined-in thoughtlessly.” (pp. 6-21)
Technical Challenges Shortlist:
Technological advances: extending lives, but driving up costs
Health Challenges:
Keeping the universal healthcare model will require rationing of services and consolidation of healthcare facilities, as public resources fall short of demand. Most Europeans are in favour of sustaining some variant of universal national healthcare. This requires healthcare services to be funded through a collective, publicly run and financed system, with care delivered free or at low cost, regardless of patients’ ability to pay. This political preference increasingly is at odds with the ability of national healthcare systems to pay for services to all. Yet healthcare systems that claim to be universal have never quite lived up to the word. All contain some level of price rationing, “so that different levels of care are supplied to different people”, explains Professor Amelung. He and others, including Stephan Gutzeit, executive director at Germany’s Stiftung Charité, believe that rationing is set to become more widespread. Already, there are varying degrees of support within Europe for the notion that patients should receive the best care available, regardless of cost.Similarly, not all Europeans believe that healthcare professionals should function mainly as patient advocates vis-à-vis the healthcare system. In addition to rationing is likely to take place, which will cut overall system cost. General physicians will become more important as gatekeepers to the system and as co-ordinators of treatment for patients with multiple health issues. A government focus on cost control will reinforce the role of general practitioners as gatekeepers— providing immediate care and referring patients to specialists only when strictly needed. This will imply some upgrading of the skills, status and pay of medical generalists, and more scope for them to deploy their knowledge and skills.
In addition to serving as gatekeepers, GPs increasingly will be called upon to serve as “patient managers”, co-ordinating the varied needs of patients with multiple health issues. Indeed, the more specialised the doctors treating different conditions affecting the same patient, the greater the need for a co-ordinator. The use of general physicians as gatekeepers may lead to an increase in the proportion of care that is provided on an outpatient basis—generally a less costly form of care than that involving overnight stays.Across the EU, outpatient or day care is already rising as a proportion of the total. There is, however, a long way to go for day care to become predominant. Currently, expenditure on in-patient services, including those provided in hospitals for day patients, is still nearly one-third of average EU expenditures on healthcare. European governments will need to find a way to improve collection and transparency of health data in order to prioritise investment decisions.Surprisingly, governments today have only a vague idea of whether the investments they make in healthcare are valuable. Yet sound analysis of return on investment is becoming increasingly important, as demand rises and funds become scarce. “The fact is, we have no handle on value,” says Marco Steinberg of the Finnish Innovation Fund. “Getting that handle is becoming more urgent as the public resources diminish. We need to be more precise when there is not a lot of money.” Part of the reason why the analysis is lacking is that clinical data are opaque, owing to requirements to preserve the privacy of personal medical records. Legislation such as the 1995 Data Protection Directive will need to be reviewed with a view to improving the collection and transparency of medicaldata, to enable more informed healthcare investments. Guido Rasi, director general of the Italian Medicines Agency, believes that successful development of e-health “will improve data analysis and allow decision to be made on robust information”. The UN’s World Population Prospects report projects that the proportion of Europeans aged 65 years and older will grow from 16% in 2000 to 24% by 2030. Life expectancy is also on the increase, particularly in the richer European countries. Eurostat figures show that life expectancy for male babies born in 2030 is more than a decade higher than that for those born in 1980 in the EU-15 (generally the wealthier member states). While higher life expectancy is good news, there is a downside: older people are more likely to be prey to chronic disease. In 2010, over one-third of Europe’s population is estimated to havedeveloped at least one chronic disease.The increasing likelihood of developing chronic disease later in life translates into higher healthcare costs. If poorly managed, chronic diseases can currently account for as much as 70% of
health expenditure, partly because of the significant costs involved in hiring a workforce to care for sick older people.Exacerbating the problem is the fact that the burden of paying for care will fall on a shrinking cohort
of younger people.(pp. 6-21)
In addition to serving as gatekeepers, GPs increasingly will be called upon to serve as “patient managers”, co-ordinating the varied needs of patients with multiple health issues. Indeed, the more specialised the doctors treating different conditions affecting the same patient, the greater the need for a co-ordinator. The use of general physicians as gatekeepers may lead to an increase in the proportion of care that is provided on an outpatient basis—generally a less costly form of care than that involving overnight stays.Across the EU, outpatient or day care is already rising as a proportion of the total. There is, however, a long way to go for day care to become predominant. Currently, expenditure on in-patient services, including those provided in hospitals for day patients, is still nearly one-third of average EU expenditures on healthcare. European governments will need to find a way to improve collection and transparency of health data in order to prioritise investment decisions.Surprisingly, governments today have only a vague idea of whether the investments they make in healthcare are valuable. Yet sound analysis of return on investment is becoming increasingly important, as demand rises and funds become scarce. “The fact is, we have no handle on value,” says Marco Steinberg of the Finnish Innovation Fund. “Getting that handle is becoming more urgent as the public resources diminish. We need to be more precise when there is not a lot of money.” Part of the reason why the analysis is lacking is that clinical data are opaque, owing to requirements to preserve the privacy of personal medical records. Legislation such as the 1995 Data Protection Directive will need to be reviewed with a view to improving the collection and transparency of medicaldata, to enable more informed healthcare investments. Guido Rasi, director general of the Italian Medicines Agency, believes that successful development of e-health “will improve data analysis and allow decision to be made on robust information”. The UN’s World Population Prospects report projects that the proportion of Europeans aged 65 years and older will grow from 16% in 2000 to 24% by 2030. Life expectancy is also on the increase, particularly in the richer European countries. Eurostat figures show that life expectancy for male babies born in 2030 is more than a decade higher than that for those born in 1980 in the EU-15 (generally the wealthier member states). While higher life expectancy is good news, there is a downside: older people are more likely to be prey to chronic disease. In 2010, over one-third of Europe’s population is estimated to havedeveloped at least one chronic disease.The increasing likelihood of developing chronic disease later in life translates into higher healthcare costs. If poorly managed, chronic diseases can currently account for as much as 70% of
health expenditure, partly because of the significant costs involved in hiring a workforce to care for sick older people.Exacerbating the problem is the fact that the burden of paying for care will fall on a shrinking cohort
of younger people.(pp. 6-21)
Health Challenges Shortlist:
Keeping the healthcare model. General physicians as gatekeepers to the system. Need to improve collection and transparency of health data. Ageing and the rise of chronic illness
Other Challenges:
Governments will have to tackle bureaucracy and liberalise rules that restrict the roles of healthcare professionals and artificially raise the cost of medical research. As demand for services rises, some areas are experiencing shortages of doctors. (pp.20)
Other Challenges Shortlist:
Limit bereaucracy
Summary of relevant aspects
Other Aspects of Governance:
Universal healthcare will require a degree of rationing and consolidation of healthcare facilities, as public resources fall short of demand. European governments will need to find a way to improve collection and transparency of health data in order to prioritise investment decisions. Governments will have to tackle bureaucracy and liberalise rules that restrict the roles of healthcare professionals and artificially raise the cost of medical research. (pp. 16-20)
Surprising Issues:
By 2030, Europe may find a way to redesign its healthcare systems so they fit the purpose for which they were created. However, in 2011 no blueprint for such a transformation can be found anywhere in Europe. There are
many theories and recommendations for dealing with the fiscal crisis in healthcare, but no obvious consensus on which among them offers the best way forward. The failure to develop a coherent plan of action is linked to deep-rooted problems in the healthcare system. For one thing, the system is both enormous and fragmented. For another, participants are fractious, defending their self-interest whenever possible. Doctors fight for continued free rein to prescribe medications and courses of treatment. Other healthcare professionals seek to elevate their own status and acquire some of those rights themselves. Industry strives to defend its investment. Payers remain intent on spending less. Patients suspect that their public healthcare system is not delivering all the benefits it could, despite escalating costs. Yet in spite of these impediments and difficulties, virtually all agree that universal, egalitarian healthcare coverage is the correct goal to strive for, and that a way must be found to deliver on that promise in a sustainable way. Europe’s healthcare systems may be defective and financially unstable, but they are still valued for the promise they offer—that all can plan on a medical safety net at an affordable cost. (p. 35)
many theories and recommendations for dealing with the fiscal crisis in healthcare, but no obvious consensus on which among them offers the best way forward. The failure to develop a coherent plan of action is linked to deep-rooted problems in the healthcare system. For one thing, the system is both enormous and fragmented. For another, participants are fractious, defending their self-interest whenever possible. Doctors fight for continued free rein to prescribe medications and courses of treatment. Other healthcare professionals seek to elevate their own status and acquire some of those rights themselves. Industry strives to defend its investment. Payers remain intent on spending less. Patients suspect that their public healthcare system is not delivering all the benefits it could, despite escalating costs. Yet in spite of these impediments and difficulties, virtually all agree that universal, egalitarian healthcare coverage is the correct goal to strive for, and that a way must be found to deliver on that promise in a sustainable way. Europe’s healthcare systems may be defective and financially unstable, but they are still valued for the promise they offer—that all can plan on a medical safety net at an affordable cost. (p. 35)
Background information:
Across Europe, healthcare is barely managing to cover its costs. Not only are the methods for raising funds to cover its costs inadequate, but, of even greater concern, the costs themselves are set
to soar. According to World Bank figures, public expenditure on healthcare in the EU could jump from 8% of GDP in 2000 to 14% in 2030 and continue to grow beyond that date. The overriding concern of Europe’s healthcare sector is to find ways to balance budgets and restrain spending. Unless that is done, the funds to pay for healthcare will soon fall short of demand. The financial meltdown is being caused by two interconnected trends: the ageing of the population and the parallel rise in chronic disease. Those financial burdens are being exacerbated by the rising cost base of medical technologies. On the positive side, the prospects for vanquishing many diseases are improving rapidly with the mapping of the genetic make-up of people who develop cancer, diabetes and heart disease. This prospect makes it all the more imperative to agree on a survival strategy for Europe’s healthcare systems. Policymakers have known about the forthcoming challenges to European healthcare for some time. Several countries have attempted to combat the effects of the global financial slowdown
through extensive reform of their respective healthcare sectors. None of these efforts has yet proved successful, despite the involvement of the best and brightest thinkers on healthcare. To unscramble the various perspectives on the ways to solve the healthcare financing conundrum, the Economist Intelligence Unit has undertaken this research, which looks at the challenges facing healthcare today and the likely shape of healthcare by 2030. The five contrasting scenarios that emerge from this research largely reflect prevailing attitudes and beliefs today. The hope is that, by examining healthcare in this way, some consensus might emerge about how to save Europe’s healthcare systems. (Report Forward)
to soar. According to World Bank figures, public expenditure on healthcare in the EU could jump from 8% of GDP in 2000 to 14% in 2030 and continue to grow beyond that date. The overriding concern of Europe’s healthcare sector is to find ways to balance budgets and restrain spending. Unless that is done, the funds to pay for healthcare will soon fall short of demand. The financial meltdown is being caused by two interconnected trends: the ageing of the population and the parallel rise in chronic disease. Those financial burdens are being exacerbated by the rising cost base of medical technologies. On the positive side, the prospects for vanquishing many diseases are improving rapidly with the mapping of the genetic make-up of people who develop cancer, diabetes and heart disease. This prospect makes it all the more imperative to agree on a survival strategy for Europe’s healthcare systems. Policymakers have known about the forthcoming challenges to European healthcare for some time. Several countries have attempted to combat the effects of the global financial slowdown
through extensive reform of their respective healthcare sectors. None of these efforts has yet proved successful, despite the involvement of the best and brightest thinkers on healthcare. To unscramble the various perspectives on the ways to solve the healthcare financing conundrum, the Economist Intelligence Unit has undertaken this research, which looks at the challenges facing healthcare today and the likely shape of healthcare by 2030. The five contrasting scenarios that emerge from this research largely reflect prevailing attitudes and beliefs today. The hope is that, by examining healthcare in this way, some consensus might emerge about how to save Europe’s healthcare systems. (Report Forward)
Scenarios
Scenario 1:
Technology triumphant. By 2030, life sciences will have delivered (and will continue to deliver) cures for many age-related chronic ailments such as diabetes, heart disease and stroke. Some of the success will be attributable to the introduction of personalised treatment and care, which allows patients more choice of medicines and interventions.One major advantage of 2030 technology is that medical interventions will be so effective that they rapidly diagnose (and sometimes even cure) chronic diseases—whereas in earlier decades, people often lived with chronic disease without ever being diagnosed. By 2030, many people will stay healthy and productive up to the grand old ages of 100 to 110, when they quickly deteriorate and die.A sub-field of e-health known as ambient intelligence will support this transformation. This field will develop electronic systems that are aware of the presence of people, and can serve as the platform upon which medical technologies are delivered. This scenario illustrates an innovative healthcare-delivery model, known as participatory medicine, in which networked patients shift from being passive recipients to being active drivers of their own healthcare and full partners to their healthcare providers. Tools such as Google Health, which is available in the USA, will become universally used (PP. 23)
Scenario 2:
Europe united. By 2030 Member States of the EU, having failed to solve the healthcare funding crisis at national level, will have agreed to unify their healthcare systems. The formal unification will take place around 2013,
when the EU will establish a Brussels-based organisation to organise and standardise healthcare for the entire bloc. This healthcare colossus, named the European Federal Healthcare System (EFHS), will be charged with making healthcare financially sustainable across Europe, while ensuring that certain quality outcomes are met in all EU countries. In particular, the EFHS will have the following goals:
1. Systematic rationalisation of healthcare resources throughout Europe.
2. Harmonisation of healthcare standards across Europe.
3. Training and re-training of Europe’s healthcare workforce.
4. Establishment of an integrated e-health system Europe-wide.
5. Harmonisation of the financial model for raising healthcare funds. As part of an immediate rationalisation drive, the EFHS will create a number of Centres of Excellence.
Each will specialise in the treatment of certain illnesses, and provide care to people across thecontinent through a combination of electronic communications and subsidiary or satellite clinics.The healthcare workforce of 2030 will also be substantially reduced. In addition to saving money, the new system will ensure consistent quality across the region. (P. 25)
when the EU will establish a Brussels-based organisation to organise and standardise healthcare for the entire bloc. This healthcare colossus, named the European Federal Healthcare System (EFHS), will be charged with making healthcare financially sustainable across Europe, while ensuring that certain quality outcomes are met in all EU countries. In particular, the EFHS will have the following goals:
1. Systematic rationalisation of healthcare resources throughout Europe.
2. Harmonisation of healthcare standards across Europe.
3. Training and re-training of Europe’s healthcare workforce.
4. Establishment of an integrated e-health system Europe-wide.
5. Harmonisation of the financial model for raising healthcare funds. As part of an immediate rationalisation drive, the EFHS will create a number of Centres of Excellence.
Each will specialise in the treatment of certain illnesses, and provide care to people across thecontinent through a combination of electronic communications and subsidiary or satellite clinics.The healthcare workforce of 2030 will also be substantially reduced. In addition to saving money, the new system will ensure consistent quality across the region. (P. 25)
Scenario 3:
Wellness first. By 2030, Europe will shift its focus from treating the sick to promoting health. The landmark legislation institutionalising this shift will be the Wellness Reform Act of 2014. This will redirect attention and resources to preventing illnesses such as heart disease, diabetes, stroke and respiratory diseases, as well as preventing injuries such as those arising from road accidents and badly managed childbirth. Across Europe, countries will redirect public funds into immunisation, maternal healthcare, subsidising healthy foods for the poor, providing nutrition information programmes, building sports facilities, and establishing healthy environments such as safer roads, cleaner air and higher quality housing. Innovation will broaden its focus from purely life sciences to include more attention to social sciences, for example developing robust tools to encourage healthier habits in entire populations.In addition, large-scale e-health programmes will provide daily support for adopting healthier lifestyles.Medical education will be given a makeover, making it a facet of public health education. Most of the curriculum will focus on the psychological triggers that motivate individuals to adopt or discard unhealthy habits.By 2030 healthcare spending will be reduced, while GDP will rise as fewer people drop out of the work force due to illness. (P. 27)
Scenario 4:
Spotlight on the vulnerable. Rather than struggle to provide costly healthcare to all citizens, European governments will decide early in the current decade to focus their healthcare efforts on reducing health inequality. This will involve directing resources to the most vulnerable members of society, including people aged 70 and older regardless of income; the poor; people with mental health problems; and ethnic minorities.The key piece of legislation promoting a focus on vulnerability will be the European Act in Support of the Vulnerable (EASV), which will be adopted in the middle of the current decade. EU governments will replace traditional healthcare institutions with new facilities catering to vulnerable groups. Their aim will be to foster formation of self-sufficient communities capable of looking after their own needs.A large infrastructure of local self-help groups, partly subsidised by government, will develop, offering advice and support to vulnerable groups and individuals. All of the programmes will be underpinned by a huge databank of personal information, allowing governments to set benchmarks and provide real value to the target communities. Sophisticatedelectronic communication systems, fine-tuned to the needs of older and culturally diverse people, will enable social care and healthcare to reach target populations, even in remote areas. (P. 30)
Actions/solutions implied:
Universal healthcare will require a degree of rationing and consolidation of healthcare facilities, as public resources fall short of demand. European governments will need to find a way to improve collection and transparency of health data in order to prioritise investment decisions. Governments will have to tackle bureaucracy and liberalise rules that restrict the roles of healthcare professionals and artificially raise the cost of medical research. (pp. 16-20)
Who benefits from the actions taken?:
society, governments, large corporations, research community
Keywords:
Geographic scope: