Managing the burgeoning cost of healthcare
Healthcare spending in OECD countries is currently 8.8 per cent of GDP, up from 5 per cent in 1970 and projected to reach 10 per cent by 2030 with further increases beyond. And, when it comes to rising healthcare costs, few countries can compete with the United States.
According to a report by the American Healthcare Initiative, in the 1970s major health programs made up just five per cent of the budget. This had increased to 20 per cent by 2000 and 28 per cent by 2017.
If spending continues to rise at the same pace, one-third of US federal money not spent on interest repayments will go towards healthcare by 2028. By 2040, it will be 40 per cent.
This means that unless action is taken, the cost of providing healthcare will eat into the government's capacity to pay for other essentials such as education and welfare.
Optimizing spend and performance
Perhaps most striking is that as much as 31 per cent of healthcare spending goes to administration. This makes it an obvious starting place for technology to reform existing practices.
“At the moment, you'll find that many clinicians have to input different information into different systems and if these systems do not “speak” to each other, if access by other stakeholders is difficult, if one is incomplete or there is an error, it can lead to real inefficiencies," says Dr Julian Feneley, Head of Healthcare in Europe, Macquarie Capital.
But for all the cost savings HealthTech could bring to the administrative side of medicine, Feneley is more excited in the role it could have in bringing greater efficiency to the diagnostic side.
Here, he sees technology such as automation being used to bring down the cost of healthcare because it can help perform the more mundane tasks currently still carried out by doctors.
“Already, for example, machines are looking at chest X-rays and mammograms and making a diagnosis, so that the radiologist is free to concentrate their energy on other challenging clinical decisions."
The way we allocate resources is also vital to reining in costs, Feneley argues. After all, two of the most expensive items in any healthcare system are usually the medical professionals and the equipment - such as the latest MRI and radiotherapy technology.
"There are real opportunities in making sure both are continually used in an optimal way so that governments and private participants in the healthcare sector receive better value for every dollar they spend," he says.
How big data could mean big savings
Bo Crowell, Head of US Healthcare Services, Macquarie Capital, explains that adopting technologies could lead to superior preventative health and improved early intervention, as well as helping eliminate misdiagnosis. While these will importantly lead to improved patient outcomes, they will also help to ease budgetary pressures and significant long-term costs of healthcare.
“A lot of medicine currently relies on a physician identifying a likely illness based on symptoms, but even the most adept and experienced doctor won't have seen every rare disease and condition."