Navigating the future: Transforming health systems and the digital health frontier
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Public health systems across the globe have been experiencing unprecedented stress over the past few years. Consequently, employer-sponsored healthcare should help fill the gaps and lead the way in addressing access to affordable and high-quality healthcare.
Why public health systems are under strain
Amid the COVID-19 pandemic, huge numbers of people avoided seeking treatment for health concerns. As things began to return to normal, demand for medical care increased dramatically, putting stress on public healthcare systems.
At the same time, those systems also faced talent drain (e.g. burnout, migration, early retirement), labour disputes and skills shortages, which have only added to the strain. One key factor is demand for qualified healthcare professionals is outstripping supply. Doctors and nurses, burned out by the pandemic, have left the industry. Meanwhile, increased mobility has meant workers moving internationally for better conditions, and there has been significant outflows from public to private healthcare sectors. Recruitment challenges and pay freezes have left many governments and health systems struggling to recruit and train new talent to replace those who have left.
Our Health Trends 2024 research shows that in some regions, insurers perceive that public health systems have worsened since the pandemic. Europe is the most dramatic example, where more than a third of insurers say both the scope (38%) and affordability (35%) of public healthcare has worsened since the pandemic, with 48% saying the quality is worse and 73% saying access to public healthcare has declined. This has a significant impact given multinationals in Europe have traditionally relied on the social systems; in other regions, many countries have adopted a private-first approach.
Latin America also shows worrying signs. Here, insurers say that quality (38%), affordability (42%) and access (59%) to public health systems has worsened compared with pre-pandemic standards.
On the other hand, insurers in Asia are reporting improvements, with almost 50% saying that both the scope and quality of the region’s public healthcare systems have got better. Likewise, in the Middle East and Africa, insurers report that both scope (43%) and affordability (33%) of systems have improved.
Unsurprisingly, given the divergence between regional outcomes, Health Trends 2024 shows the global picture to be less clear, with positive results in some regions cancelling out negative results in others. However, there is one stark finding causing great concern. Access to public healthcare systems globally has dramatically decreased, with 48% of insurers saying access has gotten worse at a time when the mental and physical resilience of millions of people is being tested like never before.
Of course, this is having a knock-on effect on the private sector – insurers believe that affordability has worsened significantly in every market except Latin America.
On a more positive note, insurers found that access to private healthcare has improved in all regions except for Europe, where it has stayed static, likely due to increased demand. More than 50% of insurers across all regions said that scope of and quality of care has also increased in the private sector according to survey findings.
However, this is a double-edged sword and causes problems. Private healthcare may have advantages in terms of scope and quality within certain markets, which is why more people are relying on it and demanding it. However, this greater utilization is causing increasing loss ratios and premium increases. Countries like Italy are seeing this unfold today and are seeking alternatives.
Multinationals and local companies must therefore consider the impact on employer funded healthcare plans, not only from a budgeting perspective but also in terms of whether the design remains fit for purpose given the public system gaps. Advancements are being made that could support more sustainable access and costs in future in terms of diagnosis and treatment. However, some of this could also come with high cost and little value.
The role of innovation
Innovation, particularly around the digitization of healthcare provision could be a game-changer for public and private providers. However, the Health on Demand research suggests that change is likely to be incremental rather than revolutionary.
It is clear that virtual tools and telemedicine are starting to bridge the access gap, whilst also making healthcare more affordable for end consumers. However, insurers are divided on the whether there will be cost savings for the employers providing healthcare benefits. Research shows that 55% said such measures have no impact on plans costs, while 22% said costs have gone down and 23% said they’d increased.
Despite conflicting perspectives, insurers were optimistic about the role of technology in transforming employer plan costs more generally.
The factors, including tech advances, that they felt would have the greatest impact on plans costs were:
- AI for first-time diagnosis and/or navigation 70%
- Advances in remote patient monitoring 64%
- Pharmaceutical developments 61%
- Reduced reliance on public healthcare plans 30%
- Genomics and personalized medicine 28%
It is not surprising that AI ranked highly in the research as insurers have already seen the power of deploying this technology in non-clinical aspects of delivery, for example, basic customer service. A major focus is reducing incidences of fraud, waste and abuse (FWA) which is increasing the costs of providing private healthcare. AI is being used across claims to assess any FWA issues and could be a transformative in controlling cost and improving service.
We also believe there is even greater potential for further optimization around clinical navigation and triage. For instance, research shows insurers using AI to help make sure that individuals are directed quickly and appropriately to the right person, which would free up valuable clinician time.
One surprise was that pharmaceutical developments did not rank higher in the list of factors with the greatest transformative impact on employer-sponsored healthcare costs. Given recent advances in drugs treating conditions such as obesity and diabetes, and the high number of drugs in development within oncology, we would expect this to have a significant impact on increasing plan sponsor costs.
However, these treatments are something that companies will need to consider carefully, as they will face moral dilemmas in terms of whether they will start paying for high-cost cancer treatments or diabetes medication, the latter of which will incur year-on-year costs.
While there have been promising advances in the use of technology for remote patient monitoring, much more needs to be done to assess the effectiveness of these methods to prove if they are working. For instance, it’s important to examine concepts like “hospital at home” and establish whether this delivers better clinical outcomes for the individual as well as savings for the funder. Remember, cost efficiencies should be considered not just in terms of healthcare savings but the improved business outcomes of a healthier workforce including better productivity, and reduced absenteeism.
There are signs of success. For instance, virtual wards are currently being rolled out across the UK’s National Health Service focusing on the use of remote monitoring of biometrics to achieve earlier discharge of patients. This has delivered positive outcomes, driven efficiencies and improved patient satisfaction.1
Leading the way
Some digital health benefits are now becoming standard, such as virtual care or telemedicine services. Our research found that 69% of insurers globally offer telemedicine, with 78% doing so in Europe and 82% in Latin America.
However, the same study shows that insurers are becoming more conscious of emerging needs, such as combatting health misinformation. Fraud, waste and abuse is a key concern and a driving adoption of technology such as AI.
We also found that providers are developing more apps and wearable technology to self-manage well-being or specific conditions. However, to avoid app fatigue and confusion, it is critical to focus on user experience and design.
Employers should also play their role. It is crucial to understand the digital developments in your region, how these can be used to improve your healthcare offerings and control plan costs. Deploying effective communications is necessary to maximize value.
Read our research report to discover the key next steps that will allow your organization to lead the way, both in terms of widening access to high-quality and affordable healthcare as well as in embracing digital health solutions.