Keynote: The Global Health Economy – Today and Beyond
Tomorrow morning I give the opening keynote at Cerner Corporation’s Leadership Forum, which brings together a select group of senior executives from hospitals, healthcare and government.
Below are my slides for the presentation. Note that these are designed to accompany my speech and are not intended to be useful as a stand-alone presentation. However a few summary thoughts on the topic are presented below.
A few quick reflections on the global health economy and where it’s heading:
1. The health industry has been largely immune to the price drivers of other industries
Health spending as a proportion of GDP is on a long-term uptrend in all developed economies. Many of the drivers of lower prices in other industries, such as supply chain efficiencies, globalization, transparency, and new entrants have had relatively little impact, largely due to the systemic nature of vested interest in the status quo. However the pace of change in the structure of health economy is accelerating.
2. Some of the new forces at play in health are exponential drivers
Genomics is a branch of bioinformatics. This means that the pace of development of our knowledge of the human genome is proceeding at the same accelerating pace as information technologies. We have proven not well able to predict the applications possible through the exponential growth of bandwidth and computing power, and it is even harder to forecast how our increased ability to understand the genetic foundation of disease will
3. Costs are soaring on multiple fronts
Aging populations, stricter drug trials and regulation, increasing litigation, and rising insurance costs are just some of the long-term drivers of increasing health costs. In addition, there are many wild cards such as the potential for pandemics. Perhaps most importantly, increased expectations of quality of life will inevitably drive health to an increasing share of our economy.
4. Efficiencies are being gleaned
Connectivity is driving greater efficiency in health, especially through the gradual shift to interoperability of Electronic Medical Records (EMR). Many sectors of the health economy are a decade or more behind more automated industries. While change will remain painstaking, these shifts are accelerating. Many other efficiencies can be gained through effective knowledge sharing, increased focus on prevention, remote doctors, robotics, and systems to support home care. As importantly, a more integrated health system will allow more cost-effective choices to be made in treatment.
5. There are myriad uncertainties on the future of the health economy
I believe that health has one of the most uncertain futures of any industry today. Taking health technologies developing beyond our pace of understanding, a system so complex it has defied decades of efforts to change it, the potential for new kinds of health risks (and wellness benefits) to emerge, the chance that we may extend our lifespans even faster than we have to date, and unpredictable social responses to these changes gives no latitude for long-term forecasting. Scenario planning is the only valid tool for strategy in this space.
