In European countries, we have seen a rise in real health expenditure that is greater than real growth in national incomes. But, despite this, improvement s in health outcomes have been subdued. More is going in but less is coming out of health systems.
To me, the key question is not only Why has this happened? It is also important to ask how we reverse the trend to achieve much better outcomes while achieving improved efficiency in health systems of Europe.
We know that there are high levels of inefficiency and waste in European health systems. But there is hope: the best performing EU countries have managed to improve efficiency levels while increasing life expectancy and reducing levels of premature death.
I believe innovation is the key to solving this problem. However, we are faced with a paradox between the ‘delivery of innovations’ and ‘innovation in delivery’.
The ‘delivery of innovations’ has been remarkable, thanks to breakthroughs in science and the digital revolution. Medical devices, medicines and health technologies are enabling more precise diagnosis, monitoring and treatment.
At the same time, ‘innovation in delivery’ of healthcare services has been all but stagnant. This is a source of inefficiency; a failure to improve the effectiveness, equity and responsiveness of health care required to achieve better and more consistent outcomes.
And so, while the world around us changes, healthcare is a laggard in terms of how it delivers services. Entertainment, communication, banking and government services have responded to technological advances to rethink how they meet the needs of citizens and consumers.
We cannot afford this any longer. New funding and investment models are critically needed for transformative innovations in health systems to achieve value, ensure sustainability and protect universal health coverage enjoyed by citizens of Europe.
A sustainable model
By incorporating value in investment decisions in European health systems, I believe we can create sustainable models of care that prioritises innovation in how services are delivered to meet needs of citizens and achieve results that matter to them.
To achieve this, we must take a broad view of value – taking a societal perspective, where all costs, irrespective of who has incurred them are taken into account and the benefits accrued to individuals, their carers, the broader economy and the society as a whole are quantified.
The costs of failure to maintain good health, prevent diseases and efficiently deliver effective care for illness are large. They include indirect costs incurred by patients due to loss of productivity (due to incapacity for work, occupational disability, or death), by their carers or families, and hence the society as a whole. In Europe and globally, carers’ opportunity costs could be as large as direct costs of healthcare. But so are the opportunities, if we can put in place systems that create better value.
Time for action
Yet, today, despite the need for a value-based approach, we have outdated input-based budgeting, investment approaches and payment models that belong to the past. We must devise consistent approaches that incorporate multiple criteria into value considerations
A change in policy environment has to be underpinned by system-wide improvements in institutional capabilities to translate policies to action. Digital tools and information will play a major role: Big data, machine learning and artificial intelligence must be harnessed to help us collect, analyze and use data-driven insights.
Europe-wide institutional capabilities are needed for creating interoperable digital data systems for defining, measuring and analysing costs and outcomes with consistency and comparability.
If we can achieve this, value-based purchasing and payment models can be used to enable risk-sharing and suitably reward value creation – and reduce waste that does not deliver what we value.
Transition to new investment models that foster creation of value will be challenging but I believe this shift is long overdue. We must view this an opportunity for Europe to lead the way in greater value creation in health systems to benefit citizens, European economy and the society as a whole.