John Wilkinson

Former Chief Executive of Eucomed

As the Euro zone crisis threatens to precipitate a much more fundamental questioning of the European dream, it is easy to revert to the eurosceptic homeland of vilifying apparently meaningless rules and regulations that have little real impact on the lives of any of us. The likes of the British ‘save our pint’ campaign trivialises the debate and does little to educate the voters of member states as to the real issues at stake.
My wife and I are part of the problem. Last weekend we ran respectable 10 kilometre times although we are both in the latter half of our fifties and we will play energetic tennis twice in the week ahead. Both had life expectancies in the early seventies at birth and now our risk adjusted life expectancies are straddle ninety years. We are a triumph for modern lifestyles and medicine (both having had interventions for conditions which may well have been fatal one hundred years ago) yet healthcare is the political scourge of our times. The success of society in increasing healthy productive years is matched by the failure of that same society to plan for such success in the provision of pension, health and social care. Yes, we have a financial crisis which has followed the profligacy of a generation but this is a minor issue compared to the need to rebuild our economic models to accommodate the demographic changes which us ‘baby boomers’ are so central to.
Innovation delivers better quality at lower total cost in all walks of life. Many of the things that are freely available today and widely used were considered unaffordable luxuries for most in my youth. All this has happened because entrepreneurs and industrialists have constantly sought better ways of doing things and have changed the value equation.
Driving innovation in European healthcare
My pulse is already racing at the prospect of this year’s MedTech Forum. The sequence of events following the 2008-2009 banking crisis has played out rather predictably with a broader economic crisis emerging in 2010 and only this year has the full force of public sector impacts been seen as the spending or money printing spree used to avoid deep recession has shifted to efforts to rebalance economies and pay back the debts that were created by ten years of fiscal laxity.
Just last week I was sitting in a presentation by a large Group Purchasing Organisation (GPO) which cited an Ernst & Young report in which hospitals had ranked their goals for cost savings. What struck me is how a majority of the surveyed hospitals want to reduce costs by cutting in the spending on medical devices. Why is this so striking? Because spending on medical devices, and more in particular medical device consumables, accounts for only 3% of total health expenditure, whereas spending on hospital organisation (internal processes, staff, ...) accounts for 70%. So if hospitals want to reduce costs as efficiently as possible, can greater savings not be made in areas other than those that make up a minority of the total expenditure? And do we really want to slay the goose with the golden egg, the medtech industry, whose tremendous innovative capacity will be a conditio sine qua non for sustainable high quality healthcare for the citizens of Europe into the future?
At 95 billion Euros the European medical technology market and industry is far from insignificant. Its impact on the lives of patients combined with the ability of health systems to operate efficiently dwarfs the value of the market while the industry has spawned hundreds of early stage companies year on year. Despite its size the medical technology market is less than 5% of total health spend and that figure appears to be declining.