Healthcare Spending Poised for Global Surge
Global spending on healthcare will surge by $71 trillion—an increase of more than 50%—by 2020, with the greatest growth coming from emerging markets in Brazil, Russia, India, and China, according to a new report from PricewaterhouseCoopers.
Health spending in these countries is rising faster than gross domestic product, exposing gaps in budget deficits and prompting governments to look to public-private partnerships for better value, PwC said in its report, Build and Beyond: The (r)evolution of healthcare PPPs.
The report identifies as a growing trend the use of PPPs to finance and manage health infrastructure and delivery, which PwC said could create a multi-trillion global market opportunity for private companies and investors, implement a more efficient use of taxpayer dollars, and improve healthcare quality.
"The public finance of private innovation and efficiency is a win-win-win for governments, private industry and patients," said David Levy, MD, global health leader, PwC. "Public-private partnerships offer the opportunity to increase access and quality of care, bend the cost curve on health spending and create accountability for health systems among groups that previously haven't had appropriate incentives to work together."
Public health authorities around the world are increasingly contracting with private entities to manage healthcare services for defined populations or markets. These PPPs—which have been used for infrastructure finance—are evolving as way to slow the rising cost of healthcare and address larger problems in the health system.
PPPs enable public health authorities to maintain oversight of standards while injecting private sector fiscal discipline, innovation, and efficiencies that are driven by incentives to generate long-term savings and improve quality, PwC said.
The market for PPPs is expected to grow significantly over the next five years, because the model can save healthcare costs. For example, Spain's Alzira project, which includes hospital and primary care services, saved the government 25% of the cost of providing care, PwC said.
Competition for private capital has prompted governments in Europe, Asia, Africa and southeast Asia to establish PPP agencies to develop policy recommendations, streamline procurement and contract for services, PwC said.
"The keys to the success of PPPs as they move beyond building infrastructure to long-term delivery of clinical services will be in contracts that clearly establish performance goals around quality and health outcomes," said Kelly Barnes, U.S. Health Industries Leader, PwC.
- Hospital Groups Strike Back at Hospital Rating Systems
- AHIP: Enormity of HIX Challenges Sinks In
- The Secret to Physician Engagement? It's Not Better Pay
- Two-Midnight Rule Must be Fixed or Replaced, Say Providers
- How Succession Planning Boosts Employee Retention Rates
- 5 Hot Healthcare Ideas from SXSW
- 4 Reasons PCMH Principles Aren't Going Away
- Another SGR Patch Likely, Lawmaker Says
- Don't Underestimate Emotional Intelligence
- Evidence-Based Practice and Nursing Research: Avoiding Confusion