Despite the major challenges facing healthcare in the next five to 10 years, too few organisations seem to appreciate the situation facing them

Last year, KPMG brought together more than 40 of the world’s leading health practitioners to look at what they thought the future might hold. We weren’t surprised to hear their concerns about the challenges ahead. Nearly all of them, when surveyed, predicted moderate or major system change.

‘No other sector faces quite the same challenges in the next five to 10 years as healthcare’

Two things, however, surprised us, which form the key themes of our report, Something to teach, Something to learn: Global perspectives on healthcare. One, how many thought they would somehow be insulated against these challenges; and two, the striking similarities in the way that payers and providers are responding and rethinking their strategies.

Three quarters of global health practitioners we spoke to believe their current business models would be able to withstand the mounting pressures caused by growing, ageing populations and tightening budgets.

It’s a worrying paradox but not unique to health. Research with 3,000 leaders in all sectors found that most, when faced with the prospect of major change, would favour transactional change over transformation reform.

Transformation without fear

However, no other sector faces quite the same challenges in the next five to 10 years as healthcare. The seeming lack of long term planning is a growing cause for concern.

Our report highlights an emerging international consensus on the major trends shaping health system reform:

  • Payers − whether governments, public sector bodies or insurers − are becoming more active: looking at value, contracting more selectively, reshaping patient behaviour and moving care upstream to focus more on prevention.
  • Providers are rethinking their approach, developing new forms of more extensive and integrated care.
  • Patients are increasingly being seen as active partners in their care, rather than passive recipients.
  • New approaches to integration are demonstrating that sustainable change and better value can go hand in hand.
  • The rise of “high growth health systems” from rapidly developing economies in Asia, Africa and South America is changing global outlooks and offering huge learning opportunities for all.

Despite these clear indicators, too few organisations seem to appreciate the scale of the challenge facing them and are asking: “In future, do we do things better or do better things?”

The health landscape must, and will, change − everyone needs to be prepared for that: patients, providers, commissioners and clinicians. We must take the fear out of transformation, embrace the potential and take people with us.

‘Integration trumps competition in terms of delivering sustainable benefits. This, with the patient at the centre, is where the focus should be’

While the paradox exists, getting sufficient joint buy-in for major reform will be extremely difficult. There are many examples of innovation and good practice around the world, from which health systems, including the NHS, can learn.

Clinical commissioning groups, for example, could learn from some international insurers, many of which are already putting the principles of the “activist payer” into practice − contracting for value and outcomes and directly influencing patient and provider behaviour. Dutch health insurer DFZ has pioneered a commissioning approach, which has seen it work with local hospital providers to develop fully integrated care pathways for oncology, pregnancy, elective surgery, complex vascular and elderly care.

Delivering sustainable benefits

We believe that integration trumps competition in terms of delivering sustainable benefits. This, with the patient at the centre, is where the focus should be. GP commissioners need to move quickly, use smart data about their populations that allow them to predict future needs and design services around patients.

‘Policies in the UK don’t incentivise integration, adding complexity to something which should be simplified’

Other health economies are finding innovative ways to empower patients. ParkinsonNet, also based in the Netherlands, demonstrates how an effective patient education system can alter perceptions about what constitutes value for Parkinson’s disease patients and, as a result, radically change practitioner behaviour. The programme has already halved the number of hip fractures suffered by this patient group, and delivered savings of €20m.

The clear evidence is that organisations that fail to understand and adapt to this new patient-provider relationship face difficult times ahead.

Technology will be an important tool for many as they seek to make the transition from the patient as a passive recipient of care to an active driver of service delivery.

Changing business

If healthcare is going to harness technological advances to improve access to services and give patients more control over their conditions, it must learn quickly from the leading innovators out there.

Hospitals too, are changing the way they do business in response to a shift in focus from paying for “volume” to commissioning for “value”.

It would seem that the days of healthcare organisations simply transacting their way out of trouble, either by growing, merging or focusing on organisational efficiencies, are numbered. Providers are beginning to look outside traditional hospital-based models. Integration is becoming the watchword. Hospitals are evolving to become health “systems”, closing the gap between primary and acute care, providing access to the full range of health and social care services and taking responsibility for overall population health improvements.

One challenge in the UK is that the policies don’t incentivise integration, adding complexity to something which should be simplified. This must change to allow the system to transform.

That said, evidence of this emerging trend can already be seen in the country. Campus type examples, such as University College London Hospitals Foundation Trust and the Central Middlesex Hospital, are the obvious ones, but early adopters such as South Devon Healthcare Foundation Trust are also driving integrated health and social care models.

Yet these remain isolated examples within an overall international health system still wedded to transactional change.

New type of leadership

For real transformation, and the evidence is mounting that it is a must, a new type of leadership will be required.

Of course, that leadership needs to start at ground level with the NHS’s greatest asset − the many hundreds of thousands of hard working healthcare professionals who shape service delivery on the front line.

It needs to be supported by a new kind of organisational leadership that is bold, visionary and prepared to lift its eyes above the horizon to see beyond day to day operational delivery.

‘Large scale change is never easy, particularly when it involves multiple interests, conflicting priorities and pressing timescales’

To be successful in these difficult times, leaders will have to find new ways to liberate the talent within their organisations and provide the tools and permission for staff to experiment and innovate.

They will also have to be prepared put aside individual perspectives and focus instead on developing joined up ways of meeting the collective needs of the populations they serve. Political leaders must commit to transformations that will potentially take longer to bear fruit than the duration of their term of office.

This won’t be easy. Large scale change never is, particularly when it involves multiple interests, conflicting priorities and pressing timescales. But, as the evidence from around the world shows us, it is possible.

Arguably the most important commodity in international healthcare development today is knowledge. In a world where knowledge is king, it is an absolute truism that we all have something to teach and something to learn.

Mark Britnell is chair and partner of the Global Health Practice at KPMG and a former trust chief executive and director general in the NHS