Global Healthcare Markets - Chapter Extracts

Part I - Understanding Global Systems and the Forces That Shape Them

This opening Part of our book provides a foundation for understanding global health markets, examines extensively the growth of private insurance and addresses significant issues impacting many nations. Critical global issues we have included are information technology, accreditation, emerging markets and trade regulations. The intention of this group of chapters is to provide an overview in lessons to be learned from comparing global health systems and projected future developments across borders.

Understanding Global Health Systems

In chapter 1,Theodore (Ted) Marmor compares global health care systems and discusses why (or whether) we benefit from doing so. Marmor addresses and refutes two commonly held beliefs: (1) that a “best model” of health care to be found somewhere in the world could be transplanted and work well elsewhere and (2) that because nations always differ in some respects, one cannot learn from the policies of another. The truth, Marmor argues, lies somewhere between.

In chapter 2, Gerard Anderson and Peter Sotir Hussey compare levels and trends in health spending in twenty-nine industrialized nations and reveal the consistent increase in expenditures since 1960. The contributors discuss the impact of aging and per capita income and the position of the United States as outlier. After evaluating insurance coverage they analyze the share of health resources allocated to hospital services, physician services, and pharmaceuticals and conclude with a comparison of available health outcome measures.

The Growing Role of Private Insurance

Lynn Shapiro Snyder and Leslie Norwalk, contributors of chapter 3, look at how regulation of managed care entails universal concepts of quality, access and fiscal soundness abroad has affected attempts to export managed health care. They observe that managed care regulation is evolving throughout the world, encourage the private sector to embrace and shape its development on the parts of the government.

Evaluating and assessing international markets and environments is the focus of Chapter 4. Contributors Howard Kahn and Margaret Ware find that analyzing an environment first — and not simply from a U.S. perspective -- is a critical step when introducing new approaches into a health care system. They suggest that the 6 critical topics in order to assess any market's opportunities are: (1) local health cost structure, (2) health care funding sources and uses, (3) the government's role and plans for reform, (4) the local medical provider infrastructure, (5) the health information structure, and (6) consumer expectations, preferences, and the impact of local culture on utilization.

We should be prepared to look in depth at actual cases, and this opportunity is provided in chapter 5. Here, Brian Gould presents a case study of his company's effort to introduce managed care in South Africa. Although United HealthCare Global Services decisions were based on seemingly sound criteria, and involved successfully recruiting local business partners, the project failed. Reasons why, and lessons learned, form the analyses in this chapter.

Emerging Developments

Another important element in global health markets is information and communications technology, as discussed in chapter 6. While U.S. executives may assume these are essential to expanding abroad, Jane Sarasohn-Kahn notes important caveats for hardware and software companies wanting to go global.

In chapter 7, K. Tina Donahue provides analyses of the evolving international landscape for quality and accreditation issues. Although frequently overlooked, performance measurement and improvement through accreditation can be an important conduit to improved, possibly market-driven, health care quality, resource distribution and financing. She briefly recaps the history of accreditation globally, and describes recent and projected changes in accreditation policy.

Finally, chapter 8 addresses trade regulations that influence the introduction new drugs and medical devices in Europe, in particular the European Union, home to more than 370 million people. Contributors Jan Murray and Alexandre Alois Mencik discuss rules that have been developed to govern entry to the European market and what manufacturers should do to keep close tabs on important developments.

Part II - Europe

This Part covers health care in nations of the European Union (The Netherlands, Germany, Spain, the United Kingdom, and France) as well as in non-European Union nations (Israel, Poland, and Russia). Contributors analyze these countries in terms of the basic underlying values of the regionuniversal access, equity in funding, and quality and examine national reform efforts.

European Union

Opening this Part, chapter 9 reviews health policies and health care reforms in The Netherlands. Contributor Kieke G. H. Okma discusses planning and regulation in that country, current health policies, efforts to control expenditures, and the partially implemented reform efforts of the 1980s and 1990sand then analyzes the changing arena of Dutch social and health care policies.

With a system that has evolved in a stepwise manner over the last 120 years, Germany presents an interesting case for studying today's challenges. In chapter 10, contributor Reinhard Busse discusses the struggle to overcome some of Germany's main system weaknessese.g., the strict separation between ambulatory and inpatient sectors. Busse lays out the basic framework of the system, explores health care financing and delivery, and gives an account of major reforms and their objectives in the last decade.

Spain has met the European standards of universal coverage and, with primarily tax-generated resources, financial equity in health care. In chapter 11, contributors Alicia Granados and Pedro Gallo describe the main features of Spain's system in terms of management and organization, prevailing values, and health care priorities and tools. They explore future developments, including the extension of decentralization, possible pharmaceutical policy changes, and increased resources for research and development.

The United Kingdom is an industrialized country with a centralized statutory universal health care financing system, a niche market for private insurers, a mixed public-private delivery system, and a national policy of explicit government rationing of care through control of funding. In chapter 12, Donald Duffy discusses reengineering of the U.K.'s National Health Service under two different reform strategies, first under Prime Minister Margaret Thatcher and later under Prime Minister Tony Blair.

Finally, a branch of France's social security system universally covers the population of that country, the last European Union country reviewed here. In chapter 13, contributors Pierre-Jean Lancry and Simone Sandier discuss France's health care system and the reforms occurring there since the mid-1970s. They then look at economic, social, and political reasons for the difficulty in implementing changes over the last 30 years.

Non-European Union

The first of the non-European Union countries covered, Israel is a comparatively young state with universal health insurance coverage, a relatively long average lifespan and low infant mortality rate, and a comprehensive system of managed health care competition. In chapter 14, contributor Albert Lowey-Ball summarizes Israel's historical and social context, describes the country's current health care delivery system, looks into the near future in light of Israel's adoption of the National Health Insurance and Managed Competition Law of 1995, and concludes with some lessons learned.

In chapter 15, contributor Renata Bushko focuses on the potential impact of socio-technological transformation for the health care system of Poland. Bushko argues that technology-driven reform, coupled with Poland's 1999 market-driven reform, could improve the quality and accessibility of health care in that country. Improvements to the system are measured using the Universal Quality Framework, based on quality, cost, outcomes, and patient satisfaction.

Finally, chapter 16 covers health care in the Russian Federation. Contributors Youri Lavinski and Steven Vasilev trace development of Russian health care from the turn of the 20th century, when the system was based on the concept of social justice; through Capitalism in the late 1980s and early 1990s; and finally to the Mandatory Insurance Law of 1992 and the Voluntary Insurance Law of 1994. Lavinski and Vasilev then discuss reform outcomes and potential for new business opportunities.

Part III - Latin America

Contributors to Part 3 analyze health care in Brazil, Argentina, Chile, and Mexico and present a case study from Mexico. They look at the traditional Latin American model of centralized health care, often with great inequality of care for poor vs. upper-middle-class populations.

South America

In chapter 17, contributors Daniel Whitaker and Bianca Camac analyze Brazil's shift away from the traditional Latin American model. Like other Latin American countries, Brazil has a health care system segmented into a struggling publicly funded sector for the poor and a high-quality private sector for the upper-middle classes. Brazil is unique, however, in its degree of decentralization and in the symbiosis between its public and private sectors. They discuss the potential for growth in the private sector to address serious inequalities within the Brazilian health care system.

As in Brazil, every Argentine theoretically has access to some form of health care. But the quality of care in that country has deteriorated, according to contributor Paul Doulton, while the cost has increasedand poor and rural populations often lack access altogether. In chapter 18, Doulton discusses reform initiatives of the 1990s designed to improve quality, efficiency, and access, and he identifies future anticipated developments.

Chapter 19 covers the health care in Chile, a system considered progressive 20 years ago but now facing a better-informed, democratic society. Contributors Pat Vitacolonna and Franz Schenkel discuss the attributes of the Chilean system, what should be retained, and what cracks have appeared given the country's changing demographics and position in the world economy. The chapter concludes with an in-depth discussion of one company's effort to help insurance companies in Chile deliver a quality managed care product.

Mexico

The first of two chapters on Mexico, chapter 20 reviews that country's health care system and the potential for investment there. The Mexican Constitution explicitly recognizes the right of all persons to health protection, contributor Neelam Sekhri points out, but as in the South American countries reviewed, services are often limited in accessibility, quality, or scope. Sekhri looks at the economic and political factors that make Mexico particularly rife for investment but also warns of possible protests against privatization.

Finally, valuable lessons can be learned from an international business that failed. In chapter 21, contributors Keith F. Batchelder and Dene McGriff assessed how a startup health plan at one time positioned to become a major managed care company in Mexico ended in failure. They use the case study as a lesson in the clash of cultures and plans gone awry.

Part IV - Pacific Basin

The Pacific Basin is a region of diverse nations, ranging from the islands of New Zealand and the Philippines to Malaysia to the continent-country of Australia. In this Part, contributors analyze the widely varied health care systems of these four countries.

With only about 3 percent of its GDP going toward health services, Malaysia has considerably lower health care expenditures than other developing countriesyet its system is recognized as being the most comprehensive among developing countries, and in fact, the level of health enjoyed by its population is almost comparable to that of some developed countries. In chapter 22, contributors Dr. Abu Bakar Dato' Suleiman and Dr. Rohaizat bin Yon describe Malaysia's system, focused on health promotion and preventive health care programs. The contributors also look at factors likely to influence future development, including the Multimedia Super Corridor, the Telemedicine Blueprint, Vision 2020 and the nation's goal of becoming a developed country by the year 2020.

The Philippines shares many qualities with other developing countries in health care: it has limited resources for funding and large segments of the population without financial access to care. In chapter 23, contributor Benito R. Reverente Jr. discusses the development of HMOs in that country as a viable, sustainable, and cost-effective alternative of delivery and financing of health care. He notes the differences between HMOs in the Philippines (now numbering 35 companies) and in the United States. Finally, he makes a case that what the Philippines has started may be the wave of the future for health care financing in other developing countries as well.

Australia is in a relatively unique position in its health care policy environment. It has both a very large public sector and, in terms of percentage of population covered, one of the largest private sectors outside the United States. In chapter 24, contributor Russell J. Schneider details the current movement in Australia of private health insurers from their traditional role as passive payers to a position of being active purchasers. Finally, Schneider discusses potential opportunities for growth in the systemrelating to managed care, information technologies, effective quality measurement, and management of an aging population.

New Zealand, a member of the Commonwealth of Nations, has modeled its health care system after that of the United Kingdom. Extensive State reforms in the 1980s included health. The reforms tightened accountability for expenditures of public funds and refocused priorities to reduce disparities in health status between Maori (indigenous New Zealanders) and non-Maori. Chapter 25 contributors Mary-Anne Boyd and Nicolette Sheridan provide an overview of New Zealand's heath care system and assess near-future reforms.

Part V - Asia

The health care of the citizens of China has improved significantly over the past half century, with life expectancy increasing from about 30 years at the end of World War II to 69 years by 1990. But today, while the government continues to provide most health care services, individuals are being forced to absorb an increasingly large proportion of the expense. In chapter 26, contributor Richard Schulze looks at what led to China's improved health care, how things are changing now, and what this means for potential investors.

In another Asian country, Hong Kong's government commissioned Professor William Hsiao and associates of Harvard University in 1998 to assess both the public and private sectors of the present health care system. Hong Kong native Yanek S. Y. Chiu in chapter 27 examines the history of health care, Dr. Hsiao's findings, and reviews possible future reforms. Chiu argues that the current Secretary of Health and Welfare, Dr. E. K. Yeoh, has the extensive training, vision, and energy to move ahead with reforms.

India's health care system is pluralistic, unusual in that nearly 80 percent of it is financed by the private sector. While the rich can afford high-priced private health care, the middle class and the poor often cannot find affordable care of reasonable quality at all. In chapter 28, contributor Neelam Sekhrianalyzes the various types of public and private health care providers and payers in India and looks at potential for future investment there.

Japan's rapidly aging population is on the verge of forcing reconsideration of the largely fee for service health care system the Japanese have liked for many years. In chapter 29, Aki Yoshikawa describes the organization and financing of the country's universal health system, recommended reforms and an in-depth review of the Kenpos, the managed health insurance associations for employers.

Part VI - North America

Up until 1973, the United States and Canada had similar models of health care financing and service delivery, with comparable health expenditures. Then Canada introduced universal public hospital and medical insurance, after which the systems differed significantly. In this last Part, contributors look at the two systems of the neighboring giants.

In chapter 30, contributor Thomas W. Noseworthy traces the evolution of Canada's health care system to its present-day construct, size, and scope. In operation for nearly thirty years, Canada's Medicare system covers virtually all hospital and doctor services. Fiscal restraints and ambulatory shift in services are forcing reconsideration of Medicare operations and funding. Noseworthy describes directional changes and their implications for service provision and restructuring as Canada moves into the new millennium.

Concluding the book, in chapter 31, Neelam Sekhri analyzes the U.S. health care system, a system that remains unique among wealthy industrialized countries in the extent of its reliance on the private sector for financing, purchasing, and delivery of services. The U.S. system is renowned worldwide for its advanced medical technology, excellent clinical quality, and consumer choiceyet nearly 47 million people have no insurance and have limited access to these medical resources. And although the United States devotes 14.5% of its GDP to health care, a higher percentage than any other country in the world, it compares unfavorably to other developed countries on most measures of health status. The country is now at a crossroads in how it manages the conflicting priorities of equitable access and affordability. The chapter ends with a recount of recent reform efforts in both public and private sectors.