Eight trends that are changing the face of healthcare
A combination of demographic, market and technology trends is making digital transformation increasingly critical to the future of healthcare.
Great progress has been made in improving health and well-being around the world, but several powerful forces are putting healthcare systems under strain. Global healthcare trends suggest that digitalization has a vital role to play in delivering future improvements to the world’s health at a sustainable cost. Despite the importance of digital transformation to healthcare, a number of cultural and technical factors are slowing the pace with which digital technology is being adopted within the industry.
Eight global trends that are transforming healthcare
1) A healthier world. Modern medicine has been spectacularly successful in improving the world’s health and quality of life. Over the past century, dramatic improvements have been made to people’s health around the world. In less than 25 years, the global average life expectancy at birth has soared from 64 years in 1990 to 71 years in 2013.¹ This progress has come at a significant cost, however, with global health expenditure growing faster than global GDP. This latter trend is expected to accelerate in the near future.
2) Economic cost burden. Much of the improvement in the health of the world’s population has been achieved through increasingly large expenditure by governments, health organizations and citizens. Global health spending totaled US$7.5 trillion in 2013, growing by an average of 6% each year since 1995.² More worryingly, health spending is consuming an ever-increasing share of global resources, growing faster than global GDP.
3) Ageing populations. Ageing populations require greater healthcare resources, and populations around the world are ageing due to lower birth rates and rising life expectancy. This trend has been seen in richer countries for many years, but is now also visible in emerging economies too.³ In 2010, just 12% of China’s population was aged 60 or over; by 2040, this is expected to reach 28%.⁴
4) Increased incidence of chronic disease. Unhealthy diets and sedentary lifestyles are among the factors driving a rapid increase in the prevalence and coincidence of chronic diseases. Around the world, there are 382 million people with diabetes and 600 million who are obese.⁵ Advances in medicine have also transformed some previously fatal diseases into conditions requiring long-term management.
5) The unsustainable cost of care. Chronic diseases accounted for 86% of all US health spending in 2010 and are also becoming an increasing burden to health systems in other countries around the world.⁶ In the United States, just 5% of patients drive almost half (49%) of cost⁷ and in the United Kingdom, the National Health Service is expected to need an extra £30 billion of funding over the next five years to continue its current level of activity.⁸
6)Government policy, regulation and mandates. Concerns about costs, quality and access to healthcare are leading many countries to introduce major reforms to their health systems. Some countries, including the United States, Canada, the United Kingdom, Singapore, Australia and Norway, are introducing regulations to support investment in and utilization of technology, such as electronic medical records (EMRs). Countries are also looking to reform healthcare payments, signaling a shift from fee-for-service to paying for value or outcomes.
7) Empowered consumers. The liberation of healthcare data, coupled with shifting costs, has ushered in the arrival of a new, empowered healthcare consumer. These consumers now expect that the quality of services available in one industry be matched by other industries. People expect a healthcare experience that is simple, personalized, seamlessly coordinated and treats their personal data securely. The rise of the ‘healthcare consumer’ may turn out to be a catalyst to improve healthcare services, but it is also an additional change that health stakeholders need to adapt to.
8) Scientific triumphs. Stunning progress in developing new medical technologies and treatments has meant that a number of previously fatal diseases can now be managed or treated. Amazing improvements have also been made in genetic sequencing, genomics, gene-editing techniques, the application of proteomics to gene therapies and the development of personalized treatments. Some of these scientific breakthroughs have piggybacked on wider technology trends, such as advances in robotics and 3D printing, faster data processing and the lower cost of data storage at scale.
Challenges to adoption of digital technology
Despite these impressive scientific breakthroughs, it is acknowledged in the healthcare industry that more effort needs to be made to develop new technology and introduce more digital innovation. Citizens feel strongly that it is important for their healthcare providers to offer electronic capabilities but, in many cases, these services are not available.
Citizens’ desire for digital healthcare services has not always been matched by action from the industry, with two thirds of physicians in the United States reluctant to allow patients to access their own health records.⁹
There are a number of reasons why healthcare has not benefitted from digitalization as fully as many other industries. Although data is being captured at an accelerating pace, it has been challenging to standardize that data and promote interoperability. There have also been barriers to sharing data because privacy regulations and the sensitivity of the data make access and sharing a challenge. The delivery of care is also still critically dependent on the expert labor of highly skilled healthcare professionals. Therefore, the industry’s culture and tradition have made automation more difficult.
Although digitalization in healthcare has so far only been incremental, we believe digital transformation has a central role to play in the industry over the next decade. Drawing on the demographic, industry and technology trends outlined in this article, we have identified four digital themes – smart care, care anywhere, empowered care and intelligent healthcare enterprise – that will underpin the digitization of healthcare.
1. “World Health Statistics 2015”, World Health Organization, July 2015, http://www.who.int/gho/publications/world_health_statistics/2015/en/
2. ”National Health Accounts”, World Health Organization, 2015, http://www.euro.who.int/en/health-topics/Health-systems/health-systems-financing/activities/national-health-accounts-estimates-of-national-health-expenditures
3. “Japan’s Aging Population Woes Worsen with New Record Low Birth-Rate in 2014”, Time Magazine, January 2, 2015, http://time.com/3651799/japan-birth-rate-population-shrinking/#_blank
4. “World Population Ageing 2013”, United Nations, 2013, http://www.un.org/en/development/desa/population/publications/pdf/ageing/WorldPopulationAgeing2013.pdf
5. “International Diabetes Atlas: Sixth Edition”, International Diabetes Federation, 2014, http://www.idf.org/diabetesatlas/update-2014
6. “Chronic Disease Prevention and Health Promotion”, Centers for Disease Control and Prevention, May 18, 2015, http://www.cdc.gov/chronicdisease/overview/index.htm
7. “The High Concentration of U.S. Health Care Expenditures”, Agency for Healthcare Research and Quality, June 2006, http://archive.ahrq.gov/research/findings/factsheets/costs/expriach/index.html
8. “Easy-Read Version of the Five Year Forward View”, NHS England, July 2015, http://www.england.nhs.uk/wp-content/uploads/2014/11/5yfv-easy-read.pdf
9. Munro, Dan, “New Poll Shows Two-Thirds of Doctors Reluctant to Share Health Data With Patients”, Forbes, June 8, 2015, http://www.forbes.com/sites/danmunro/2015/06/08/two%E2%80%92thirds-of-doctors-are-reluctant-to-share-health-data-with-patients/
Healthcare is one of six industries (along with automotive, consumer, electricity, logistics and media) that have been the focus of the World Economic Forum’s Digital Transformation of Industries (DTI) 2016 project. An overview of the DTI program can be found here.
Our in-depth findings about the digital transformation of the healthcare industry are available in a white paper, which can be downloaded here.
To explore a selection of related articles and case studies, please select one of the tags below.