Hospitals last resort in healthcare plans

HOSPITALS could play a limited role in healthcare as governments focus on reducing costs.

Many developed countries face ageing populations and higher costs, and governments are increasingly unable to fund citizens’ care because many of them are highly indebted.

That is the message from KPMG, whose global health experts were in South Africa to meet industry operators to assess how role players can work differently to improve health outcomes.

One of the key processes is integration: figuring out ways for parties to work together in the healthcare system — hospitals, insurers, medical scheme administrators, doctors and specialists. It is a discussion to determine where there is fat in the system, where compromise can be reached and where service can be leveraged often other than in the traditional places.

Hospitals are the biggest component of healthcare costs in South Africa and worldwide. Developed countries, in particular, are focusing on health treatment in the form of preventative healthcare, partly to avoid more expensive intervention.

Countries such as Spain and Italy, which were in a fiscal crisis, are shifting the sale of some drugs to the over-the-counter market, placing the costs in the hands of the patient.

With the global increase in noncommunicable diseases, governments could not afford to pay for the growing burden of these costly conditions, said Chris Stirling, global chairman of KPMG Life Sciences Products. The pressure to reduce the amount of GDP being consumed in developed countries in healthcare systems was huge, he said.

Professor Hilary Thomas of KPMG said developed countries were about 10 years ahead of South Africa, but she expected it to catch up quickly.

Not only are governments looking for alternative ways to treat patients, with options such as home care and hospice, but consumers are taking ownership of more of the decisionmaking, scouring the internet for guidance.

Pharmaceutical companies are looking at developing economies to foster growth. There is the “patent cliff”, where many companies’ products will lose their patents over the next two to four years, which means business models need to change .

GlaxoSmithKline’s revenue growth in Africa has been its highest at about a 20% increase a year for several years. “Every large pharmaceutical company has a focus on Africa where they didn’t five years ago,” said Stirling. “All our pharmaceutical clients think this is the next great frontier.”

GlaxoSmithKline has said its pharmaceutical products will be sold far cheaper than in Europe to spur access.

The UK was becoming less relevant even for bigger companies based there — new drugs were not being prescribed or taken and there was a kind of “cultural conservatism” in place, said Thomas. People tended to stick to the medicines they had used historically.

There has been a big shift in the UK away from hospital admissions and towards stepping up care before they are needed.

Stirling said the global pharmaceutical industry needed to build relationships with governments to explain why they could make a positive difference to the healthcare of their countries.

“It shouldn’t be that difficult to do

Developed countries are about 10 years ahead, but South Africa will catch up quickly

in Africa, given the incredible need and divergence in healthcare compared with the rest of the world.

“But it does mean a different business model to the one they have adopted in developed parts of the world, and it does require a lot more engagement with all parts of the healthcare ecosystem.

“That’s something they are working hard at — but are not necessarily very good at — at the moment.”

But Health Minister Aaron Motsoaledi recently launched a blistering attack on some big pharmaceutical companies. He accused them of conspiring against the state by trying to extend the protection of intellectual property and putting profits before health.

Thomas said the challenge was getting providers on board: there had not been a huge appetite locally for sharing information on quality or patient feedback.

“It’s finding those providers that do want to do that and helping to drive change,” he said.

There is a view that developing countries that are building healthcare systems can do so without making the same costly mistakes as entrenched markets.