John R. Kimberly. Uppsala Lectures in Business October 6, 2010

Transcription

1 John R. Kimberly Henry Bower Professor University of Pennsylvania Uppsala Lectures in Business October 6, 2010

2 Estimates of Global Spending on Health $5.6 billion in 1990 $21.8 billion in 1997 $2.3 trillion in the U.S. alone in 2008

3

4 Mapping the Health Sector: The Principal Players Providers Regulators Patients Suppliers Insurers

5 The Changing Context of Health Increasing costs have led to: Search for tools for cost control managerial efficiency Demands for accountability Search for value Emphasis on quality Identification of best practices Efforts to determine comparative effectiveness

6 2005 Thomas Friedman The World is Flat

7 Focus on flows across national borders Financial capital Human capital Patients Technology Expertise and Information Policy instruments

8 Some Examples of Cross Border Flows Financial capital Private equity plays July 19, 2010 Carlyle and TPG agree to pay $1.73 billion for Australian hospital owner Healthscope 15% of Australia s private hospital market From the Healthscope website: Healthscope is a leading private health care providerwithin Australia that uniquely operates in every State and Territory, as well as in Asia. Our reach of facilities around the country firmly places Healthscope as the second largest private hospital provider operating44 private hospitals. The company includes a leading pathologybusiness with facilities in Australia, New Zealand, Singapore and Malaysia; a growingmedical centresdivision with over 45 clinics; and a diagnostic imaging division centred in major hospitals.

9 Some Examples of Cross Border Flows Financial capital Private equity plays July 27, 2010 WSJ Malaysian sovereign wealth fund Khazanah Holdingsoffers $2.6 billion to buy the stake in Singapore hospital operator Parkway Holdings, Ltd. it doesn t already own, prompting India s Fortis Healthcare, Ltd.to abandon its own takeover efforts. Fortis had bought a 23.9% stake in Parkway from TPG in March of From the Parkway website: Parkway is a leading healthcare group based in Singapore, operating 16 hospitals with more than 3,400 beds in Asia, as well as patient assistance centres throughout the world. It has an extensive network across Asia, Europe and the Middle East with ParkwayHealth Patient Assistance Centres (PPAC) in Bangladesh, Brunei, Cambodia, China, India, Indonesia, Malaysia, Mongolia, Myanmar, Pakistan, the Philippines, Russia, Saudi Arabia, Sri Lanka, Ukraine, the United Arab Emirates and Vietnam. With a team of more than 1,200 accredited specialists covering 40 different specialties, Parkway is committed to its vision to be a global leader in value-based integrated healthcare.

10 TECHNOLOGY Globalization and the Business of Health Care Some Examples of Cross Border Flows October 2009 HBR How GE is disrupting itself Introduces the concept of reverse innovation with examples from health care. What is reverse is the flow of innovation across national borders from less-developed to more-developed countries.

11 PATIENTS Globalization and the Business of Health Care Some Examples of Cross Border Flows Some medical centers in the U.S. and elsewhere have been very aggressive in their efforts to attract wealthy patients from abroad. The development of medical tourism has introduced a flow in the other direction. Hospitals in Thailand and India, in particular, have become attractive low cost, high quality destinations for some patients from wealthier countries.

12 Is Friedman right? How flat is the world of health care?

13 There are some remarkable technological advances

14 But at the same time there is huge unmet need for basic care Guinea Worm

15 River Blindness

16 Elephantiasis

17 Increasing globalization in health care has resulted in considerable improvement But increasing globalization has a dark side as well examples include The global sourcing of nursing talent The global sourcing of organs The global sourcing of blood

18 CONCLUSION Health care is globalizing, but there is lumpiness because a significant part of health care is local. For routine primary care, the need for local provision will continue. For specialty care, we are likely to see continued globalizationand the development of companies that see business opportunity in focused growth across borders. Examples include Aravind (eyes) in India, Shouldice (hernias) in Canada, Indiana Heart Hospital in the U.S.

19 Among other players in the landscape, we are likely to see a Baker and Mckenzie model leveraging global reach with deep local knowledge Pharma Medical devices Consulting Information technology and EMRs

20 At the end of the day, globalization in health is a twoedged sword. The business opportunities are extraordinary, but the need for intelligent regulation is a pressing priority. As is frequently the case, the tension between free market approaches and the collective good will dominate the landscape.