Stop the rationing/containment paradigm! Stimulate Healthcare to grow into a service industry!

1. The Great Healthcare Paradigm Shift Stop the rationing/containment paradigm!Stimulate Healthcare to grow into a service industry!

2. Contents • The Big Idea • National Economics • Why This Could Work

3. Healthcare capability and output has been and is growing rapidly (# 1) • This is a problem: • medical development is the major reason for the perceived financing problems of healthcare systems • it also emphasizes the need for doctors and healthcare systems to undertake sorting apart "need" from mere "demand" – this sorting has been practised for decades

4. Medicine – a victim of its own success Change in probability of patient survival if doctor arrives + Today C:a 1830 -

5. The accelerating gap between demand, driven by the ever-increasing capability of healthcare, and public financing What healthcare can do Public healthcare budgets ~ 1990

6. Healthcare capability and output has been and is growing rapidly (# 2) • This is also a fantastic opportunity: • introducing attractive ways of consuming "extra" healthcare can be done without taking away such healthcare, which people are accustomed to getting through public systems

7. Stimulate healthcare to become a service industry(the strategic level solution – lots of organisational and management issues to solve!) • Keep the present basic coverage provided by public systems (i.e. do not copy American social insurance systems) • Make it as streamlined and pleasant to consume domestically produced healthcare services as it is to consume package holidays or Korean-made electronics

8. … and Yes, this is meddling with the issue of Equity • In our present systems, equity problems frequently hit the weakest groups of patients, not the wealthy and/or well-educated • Improving the opportunities to consume healthcare services can provide better healthcare for everybody!

9. Contents • The Big Idea • National Economics • Why This Could Work

10. What makes the difference between a (public) cost problem and an industry contributing to growth • Whether an activity is a cost problem or an industry is totally unrelated to the nature of the product or service! • cf. the entertainment "industry"

11. What is an ACDM?("Autonomous Consumption Decision-Maker") • Normally, an ACDM is just a "customer" • When somebody else is perceived to be paying, the customer becomes an ACDM: • BMW and Mercedes car buyers (most are sold new as company cars) • business class passengers • U.K. primary care patients • NB! ACDM's and rationing do not co-exist!

12. So what is the actual differentiator?(between a public cost problem and an industry contributing to growth) • The number of Autonomous Consumption Decision-Makers (ACDM's) for a product or service in relation to the total market size. • 1 ACDM (the State Government): Cost problem. • 20 – 200 ACDM's (local government/Insurance co:s): Cost problem. • ACDM's in excess of 3 – 5% of individuals: Industry!1) 1) scope for interesting research in national economics!

13. Contents • The Big Idea • National Economics • Why This Could Work

14. Is there a willingness to pay, which is not catered for? Definitely - with the appropriate marketing: ”Fly more on BA - we need the money, as our planes are worn, pilots and cabin staff burned out, management abysmal, regularity appalling, check-in queues mile-long and weather forecasts terrible!”

15. Cutbacks in Healthcare? Healthcare supply has never been as plentiful and advanced as today - the problem is an accelerating gap between economy and expectations!

16. A very high demand ceiling! Many investigations show that the willingness to pay for healthcare is high, even if (all of) the cost is not subsidised!

17. Probably an easier management challenge than keeping to try to Manage Demand(still not easy, but the potential rewards are astronomical) How could we make healthcare a major service industry while retaining the basic values of equal access to quality care?

18. The healthcare "market"! Sorting apart "need" from "demand"Columns from left to right:from life saving/curing to improvement in quality of life • Rehabilitation • Cataracts • Imigran • Gonorrhea and clamydia • Palliative radiation therapy • Cancer surgery • Blood diseases • Severe hip and knee joint problems • Severe RA • Ottitic children • 50% of coronary bypass operations • Gall bladder surgery • Semi-serious ulcers • Old patients with moderate multidiagnoses • Severe dental injuries • Acute stroke and infarct • Curative cancer therapy • ”Heavy” psychiatry • Severe infectional disease • Fractures • Severe traumas • Acute allergic reactions • Complicated childbirths • Child leukemias • Major bleeding ulcer • AIDS • Old patients with severe multidiagnoses • Not paid for by public benefit systems • Moderate problems from columns 2 & 3! • Small varicose veins • Gyms • Cough drops • Wrinkles • Esthetic plastic surgery • Herbal medicine • Vitamins • Alternative medicine • Liposuction • Benign skin spots • Regaine • Bulk of dental care • Antabus • Varicose veins • Oestrogen treatment • Breast reductions • Hip and knee joint replacement • Incontinence • Prostate trouble • Moderate arthritic pain • The bulk of dermatology • Hypospadi • Common cold • Carpal tunnel syndrome • Gall bladder surgery • Gastritis • Old patients with less severe diagnoses • Hearing aids • PC-based reading aids • Viagra • Mammography "Need" "Demand"

19. The position of the "brick wall" on the need-demand scale:ruled by national wealth (GNI/capita)or social insurance ideology • Less severe conditions • Gonorré och klamydia • Strålbehandling • Cancerkirurgi • Blodsjukdomar • Svåra höft- och knäledsbesvär • Svår reumatisk värk • Öronbarn • De lindrigaste 50% av bypassoperatione rna • Gallstenskirurgi • (Halvallvarliga magsår) • Äldre patienter med elsvåra vårdbehov • Svårare tandskador • Less serious cases from column 2 • Bröstförminskning • Höft- & knäleds- operationer • Urininkontinens • rostataförstoring • Mindre svår reumatisk värk • Huvuddelen av hudsjukvården • Hypospadi • Förkylningar • Karpaltunnelsynd rom • Viss gallstenskirurgi • (Gastrit) • Äldre patienter med måttliga vårdbehov • Hörapparater • PC-baserade • Moderate problems from columns 2 & 3! • Beskedliga åderbråck • Gym • Hostmedicin • Rynkkräm och - behandling • Estetisk plastikkirurgi • Naturläkemedel • Vitaminer • lternativmedicinsk behandling • Fettsugning • Ofarliga prickar på skinnet • Regaine • Xenical • Huvuddelen av tandvård • Antabus • Akut slaganfall infarkt • Kurativ cancerterapi • ”Tung” psykiatri • Svåra infektions- sjukdomar • Frakturer • Svåra olycksfall • Akuta överkänslighets- reaktioner • Komplicerade förlossningar • Barnleukemi • (Stora blödande magsår) • Äldre patienter med stort vårdbehov Thailand, Latin America Uganda, uninsured Americans Western Europe, Canada, Japan "Need" "Demand"

20. Europe -a paradise for the consumption of goods! There are probably no other societies on Earth, which are so well arranged for consuming goods, and so poorly arranged for consuming services!

21. From where would the money come to pay for more healthcare? Over a 5 - 10-year period consumption can shift between all the areas of the table, including to healthcare. Different shifts for different households, which is the strong point of a market economy! ANSWER: WHO NEEDS TO KNOW?

22. Control question to anybody, who lacks faith in the previous slide From where came the money for mobile telephones, video rentals, designer leisurewear and home PC:s?

23. How large can the healthcare industry be allowed to grow? • Answer: Literally no limit at all, as long as growth is fueled by a demand situation, where consumption decisions are made by up to 450 M ACDM's. • There is a limit ONLY when healthcare consumption is “force financed” in such a way that it automatically makes all other goods and services more expensive! (e.g. through taxes)

24. The Lisbon Agenda, or Why is there more Oomph! in American economy? Employment in the USA 40000 35000 30000 25000 20000 15000 jan-82 jan-84 jan-96 jan-98 jan-80 jan-88 jan-90 jan-94 jan-86 jan-92 # employees manufacturing & agriculture # employees in services Source: Datastream

25. Why have the USA managed the transition to a service society so much better than Western Europe? The spinal cord answer is that taxation of labour is higher in the EU than in the USA.

26. EU countries may have blocked the underlying growth potential of the healthcare industry by treating it as a cost problem rather than as a service industry 100 Manufacturing & agriculture 80 Manufacturing & agriculture 60 Private services Private services Share of GNP 40 Healthcare Healthcare 20 Other public services Other public services 0 Unemployed Unemployed -20 EU USA Source: Eurostat

27. Stuff to learn and not to learnfrom Americans • Good stuff: • 250 million Americans get excellent healthcare without waiting times • Not-so-good stuff: • 50 million people outside public systems ("GASE") – this is social insurance ideology, not a healthcare industry characteristic!

28. Carecon Valley(?) • If a society only requires 20 % of its population to produce for its material needs, it becomes important that the remaining 80 % work in sectors, which provide a large amount of jobs per million euros spent, and which are difficult to relocate to India: • Healthcare - Wow! • Motorway construction - Phooey! • Software authoring; Hello, Mr. Gupta!

29. ”A European dilemma” • How large would the European healthcare industry have been, had it not been blocked off from expansion by being treated as a cost problem instead of a growth opportunity? • In excess of 10 M new jobs?

30. Most likely supply/demand situation, if we stick to the principle of taxes/coompulsory health insurance being more or less the only sources of financing for healthcare! What medcine can do Public healthcare budgets 1990 2015?

31. So What? • Instead of walking around showing perverse pride over the fact that we have been able to keep healthcare below 10 % of GNP - • what if in 2020, with justifiable pride, we could look back att how we, by active and trustful cooperation between public and private entities, brought healthcare to 15 % av GNP, creating >10 M European jobs in the process!

32. The Key Issues • Financing solutions • make consumption of healthcare services as easy and pleasant as the consumtion of capital goods or package holidays • Prioritization within healthcare • open and transparent systems for sorting patients to the separate sides of the "brick wall"

33. The Management Challenge(not easy, but the potential rewards are astronomical) How can we manage: • the transformation of healthcare from "cost problem" into the loveliest service industry on Earth • while retaining the basic values of equal access to quality care? (i.e. avoiding the Great American Side Effect - GASE; 15 % of people outside the system)

34. The Lisbon Agenda andsustainable financing of healthcare in the EU • Ladies and gentlemen; • "I give you EUR 200 billion of additional economic growth for the EU provided by the largest service industry on Earth: Healthcare!" • and at the same time: improved healthcare services for all!