Global Healthcare Management Emerges as a Multinational Business/ Clinical Model

Transcription

1 Global Healthcare Management Emerges as a Multinational Business/ Clinical Model 1

2 Fara Zakery, Ph.D. Charles Sykes, Ph.D. Robert Kamkwalala, Dr. Mgmt. Joyce M. Eisel, Dr. P.H. Harris-Stowe State University, Anheuser-Busch School of Business For Presentation To The IACBE Annual Conference and Assembly Meeting April 15, 2015 Baltimore, Maryland 2

3 INTRODUCTION Global healthcare management has been categorized by (1) its clinical nature and (2) its multi-domestic responsiveness to globalization. However, as a result of market, cost, government and competitive drivers; such as, pharmaceuticals and medical equipment, the healthcare management field has evolved from a Clinical, Multi-Domestic to a Multinational Healthcare Business/Clinical Model. (MHBCM) 3

4 New Business Model Proposal Discussion Questions Answered 1. Business models and their relationship to growth 3. The influence of drivers 4. Leadership competencies 5. Emergence elements 6. Need for critical business considerations 7. International expansion factors 8. The International Responsiveness Grid 9. Examples current Multinational Healthcare Business/Clinical Model Initiatives 10. Recommendations 4

5 Growth of Economic Globalization 1975 Eight percent (8%) of the world s countries had a free market system based on supply and demand with little or no government control Thirty-eight percent (38%) had an idealized form of a market economy - free-market system with $1644 billion in Foreign Direct Investment (FDI). 5

6 Growth (Cont.) 1997 Since 1997, health spending has been accelerating as a percent of GDP among the Organizations for Economic Cooperation and Development (OECD) countries 2000 Price Waterhouse Coopers Survey results estimate that by 2012 health spending for OECD countries will be more than $10 trillion. By 2020, healthcare spending is projected to triple in real dollars, consuming 21% of GDP in the U.S. 6

7 2014 Highlighted Countries Data Price Waterhouse Cooper (PwC) 7

8 Growth (Cont.) 2015 Healthcare spending is expected to grow much faster than GDP in the coming years. OECD Countries Health spending as a percent of GDP will increase to 14.4% in 2020, up from 9.9% in BRIC Nations (Brazil, Russia, India and China) Health spending is projected to grow from 5.4% of GDP in 2010 to 6.2% in Stronger growth in health spending due to (1) economic growth (2) building out of health systems. 8

9 Three Definitions of Key Terms 1. Clinical The term clinical relates to the examination and treatment of patients. (3) 9

10 2. Multi-Domestic The term Multi-domestic has been used to describe a set of strategies used by companies that operate in more than one country at a time. As smaller businesses expand their operations into markets overseas, they tend to act differently than their larger competitors, many of them choosing a Multidomestic strategy. The best definition of a Multi-domestic company is a business that uses a different approach in each of the markets it operates in. (4) 10

11 3. Multinational Enterprises (MNE) Engagement in foreign direct investment by directly controlling and managing value adding activities in other countries. According to the International Labor Organization, a United Nations agency, a multinational enterprise is more powerful than an economic investor alone. A multinational with operations in a given country can promote social and economic welfare, improve living standards and foster such human rights as freedom of association. (4) 11

12 UNTIL TODAY!! International Healthcare Management has been categorized by ITS MULTI-DOMESTIC RESPONSIVENESS TO GLOBALIZATION ITS CLINICAL NATURE 12

13 International Geocentric Perspectives Now Shape The Future Globalization of Health Care Management 13

14 Evolution of International Healthcare Management DRIVERS INFLUENCE PERSPECTIVES Cost Markets Competitive Attitude Government 14

15 Drivers Influence Perspectives Customers Generation Y An Aging Population Competition BRIC Countries Brazil, Russia, India and China Shortened Product Life Cycle 15

16 Why Would We Not Go Abroad? The U. S. Global Health Initiative (GHI) Budget Request for FY 2011 was $9.6 billion (over $5 billion for HIV). In 2007 the U.S. spent $5.3 trillion dollars worldwide with 59 million health care workers, according to the World Health Organization (WHO). (8) The world population is growing by 80 million per year. According to the U.S. Central Intelligence Agency, July 2014, the world population was 7,174,611,584 billion est. United States million. 16

17 Historical Measurement of Industry Structure Global Local Pharmaceuticals Scientific Instruments Food and Beverages Health Care Kedia, (11) 17

18 Multinational Business Model Emergence Elements Collaborative Political Relationships Scientific Advances Cross- Cultural Demands Expanding International Leadership Perspectives Web Based Tools/ Cloud Information Technology Profit and Nonprofit Incentives Emergence Factors Service vs. Product Manufacturing 18

19 Questions to Ask Ourselves >How Have the Emergence Elements of the Multinational Business Model Affected the Globalization of Health Care Management? >What are the Combined Critical Factors to Consider Now? >Can Healthcare Save the Global Economy? According to William Trombetta, J.D., professor of pharmaceutical and healthcare marketing Healthcare isn t going to solve everything overnight, but it can be a powerful catalyst to turn things around. (15) 19

20 GLOBAL FACTORS WAR, DISEASES, PANDEMICS SOCIAL NETWORKING ECONOMIC STABILITY LEGAL SYSTEMS GOVERNMENT VS. PRIVATE HCM SYSTEMS GOVERNMENT PAYMENT SYSTEMS MEDICAL TOURISM INDUSTRY CULTURE ALTERNATIVE MEDICINE MEDICAL EQUIPMENT INDUSTRY OPERATIONS TECHNOLOGY PHARMACEUTICAL INDUSTRY FINANCIAL SYSTEMS WEALTH WORKFORCE EDUCATION MEDICAL BIOTECHNOLOGY 20

21 Essential Global Leadership Competencies Legal Cultural Technological Opportunity Recognition Political An understanding of policy and power goals, local and economic implications, different governmental structures, decision-making processes. International Technological and cultural competencies are needed Diverse, heterogeneous communities have different fiscal, social, political and communication systems which are interrelated to goals; technological needs or gaps, capabilities and limitations, relationship to cross cultural communication, integration of communication, collaboration and trust. 21

22 To Summarize AS ONE VIEWS THE HEALTH SYSTEM, GLOBAL CONSIDERATIONS, AND THE HEALTHCARE BUSINESS POTENTIAL, THE NEED FOR CRITICAL CONSIDERATIONS BECOMES EVIDENT. Although individual countries may be performing at varying levels, each has a significant opportunity to improve. It is critical to define the critical components, and develop metrics to establish a baseline to monitor performance. (16) Medical/Biotechnology The integration of science and technology to create agriculture or medical products through industrial use and manipulation of living organisms. (17) In 2012, pharmaceuticals were the 4 th largest export at $40 billion or 3.1% of total U.S. exports (18) 22

23 Summary continued According to Globalmedia, the medical device and diagnostics industry currently is valued at over $150 billion. Technological advances in medical device and diagnostics design are driven by and increasingly demanding market, a growing patient population and a worldwide governmental drive towards preventative therapies. (globaltrademedia.com) (19) Education of the workforce is now a critical factor in harnessing information and technology as clinicians become more knowledgeable and efficient with the switch to digital information. Global Health Insurance carriers need to understand global markets inside and out. Issues of the increased threat of pandemics also affect funding for international healthcare; for example, HIV/AIDS. 23

24 Global Health Care Management Results of International Business Expansion Global Business/Clinical Management Perspective (BCMP) Clinical Perspective

25 Integration Responsiveness Grid Global Integration 2012 Proposed Global Strategy Example: Engines Transnational Strategy (Multinational) Pharmaceuticals Telecommunications Global Strategy Example: Engines Transnational Strategy( Multinational) Example: International Healthcare Example: Cardinal Health International Strategy Example: Metals Multi-Domestic Strategy Examples: Foods Health Care (Clinics) International Strategy Example: Metals Multi-Domestic Strategy: Example: Foods

26 Cardinal Health An Example of the Business/Clinical Management Perspective (BCMP) Headquarters: Dublin, Ohio $87 Billion Company (22.20 Billion in revenue last quarter 2013) Ranked Number 19 on Fortune 500 (in sales) in 2013 Pharmaceutical and retail is larger in revenues than; for example, CVS, Walgreens and Phizer Health care supply chain services, clinical technologies and services, medical products and technologies 30,000 employees on six continents Cardinal Health believes that there are large and diverse opportunities in the still fragmented $4 trillion health care industry worldwide.

27 Recommendation It is recommended that Schools of Business integrate the Multinational Healthcare Business/ Clinical Model into the curriculum to prepare students to be transformational, visionary leaders who have a sense of mission and are capable of motivating their followers to accept new goals, meet apparent international demands, and seize the projected growth opportunities in the healthcare field.

28 Thank you! Questions? Comments?

29 Fara Zakery, Ph.D., Charles Sykes, Ph.D., Robert Kamkwalala, Dr. Mgmt., Joyce Eisel, Dr. P.H. Abstract Global Health Management Emerges as a Multinational Business/Clinical Model Historically, global health management has been categorized by (1) its clinical nature and (2) its multidomestic responsiveness to globalization. However, as a result of market, cost, government and competitive drivers the healthcare management field has evolved from a Clinical, Multi-Domestic to a Multinational Business /Clinical Model. This emergence is the result of factors; such as, expanding international leadership perspectives, collaborative political relationships, profit and nonprofit incentives, scientific and technological advances, distribution efficiencies, strengthened economic capabilities, cross-cultural demands and international leadership perspectives. In addition, web-based tools have been responsible for powerful changes in communication and information technology. The convergence of these elements has shaped and challenged international growth and the future of the healthcare field. Whereas, the worldwide need for clinical research, patient services and medical expertise continues to grow within the nonprofit sector, the healthcare business potential is evident in spheres that include pharmaceuticals, medical equipment, diagnostics, financial services, hospitals, technology and medical tourism. Therefore, it is expected that the multinational healthcare industry will continue to expand as boundaries become more fluid and strategic opportunities becomes more globalized. Consequently, it is recommended that Business Schools integrate the Multinational Business/Clinical Model into the curriculum to prepare students to meet the apparent challenges, lead the globalization trends and seize the projected growth opportunities in the healthcare field.

30 References 1. Friedman, T., Globalization, Anchor Books, New York Health Cast 2020, Pricewaterhouse Coopers Health Survey Peng, M., Global Strategy, 2nd ed., Cengage Learning p.495. Journal of International Studies, Multi-Domestic, tp:// 6. Luthans, F.; Doh, J., International Management, McGraw-Hill Irwin, Eighth Edition 2012, pp ,11,14,21,22, Krug, J. and Kedia, B., FDIB Globalization Seminars, The University of Memphis, June World Health Organization, World Health Statistics, U.S. Central Intelligence Agency, July Aspirin, Medical Imaging Technology, Global Trade Media, Web 17 Nov Steigleman, C., Can Healthcare Save the Global Economy, Haub School Review, Saint Joseph s University, Haub School of Business Magazine, Fall Fried, B., Gaydos L.; Editors, World Health Systems, AUPHA, 2 nd edition, 2012 p (globaltrademedia.com) globaltrademedia.com Bartlett, C., Beamish P., Transnational Management, McGraw- Hill Irwin, 6 th Edition, 2011, p.vii 23. Peng, M., Global Strategy, South-Western Cengage Learning, 2 nd edition, p Thank you to AABRI International Conference participants for their comments and suggestions, Orlando, FL, Jan 2013