25 June 2008 — The way that healthcare is paid for in is flux as governments around the world seek ways to control costs without further compromising quality at a time when the needs of the aging population threaten to overwhelm health system resources. A new report published today by PricewaterhouseCoopers’ Health Research Institute finds that two-thirds of health leaders, including government and private payers from 20 different countries, see problems with their current payment system, and they are exploring new payment models that use incentives to better balance access, quality, efficiency and demand.
Alina Lavrentieva, Partner, Pharmaceutical Leader, PricewaterhouseCoopers (PwC), concluded:
“Health systems are at risk of financial cavitation, and there is a tremendous focus on cutting costs. Cutting costs at the expense of quality and efficiency is economically and socially devastating. This is why the right reimbursement model is so vital to future sustainability, and it must be reimbursement that properly aligns incentives versus the current perverse incentive structures that exist today.”
The report entitled “You Get What You Pay For: A Global Look at Balancing Demand, Quality and Efficiency in Healthcare Payment Reform ” provides a comprehensive overview of how payment models are changing in 20 different countries, lessons learned from the experiences of other health systems and findings of a survey of 200 health industry executives including government payers, private payers, hospital executives, and physicians.
“The optimal payment system is one that is totally based on providing the best possible outcome for patients and the community, but that is very challenging given the current demands being placed on the system. Each country needs a hybrid health payment system, one that balances cost containment and efficiency with quality and demand. There is no global cookie-cutter solution that will work universally, which is why each country needs to take parts and pieces that work given their culture, social goals and health system.”
PricewaterhouseCoopers’ research found clear trends around the world in how governments are juggling priorities. It found that:
There is a potential need for rational pricing across different countries and territories, particularly in Europe, as the healthcare marketplace becomes more global. Patients who are paying more out-of-pocket for care are shopping around for care in non-traditional venues and locations. Countries need to prepare to develop rational pricing for competing in the global market for healthcare services.
PricewaterhouseCoopers' Health Research Institute commissioned a global survey of more than 200 healthcare executives from 20 countries: Australia, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Italy, Malaysia, the Netherlands, Norway, Poland, Singapore, Slovenia, Spain, Switzerland, the United Kingdom and the United States
About the PricewaterhouseCoopers Health Research Institute
PricewaterhouseCoopers Health Research Institute is an unparalleled resource for health industry expertise. By providing cutting-edge intelligence, perspective and analysis on issues impacting the health industry, HRI assists executive decision-makers and stakeholders worldwide in navigating their most pressing business challenges. PricewaterhouseCoopers is one of the only firms with a dedicated global healthcare research unit, capitalizing on fact-based research and collaborative exchange among our network of professionals with day-to-day experience in the health industries.
PricewaterhouseCoopers’ Health Industries serves as a catalyst for change and the leading advisor to organizations across the health continuum, including payers, providers, health sciences, biotech/medical devices, pharmaceutical and employer practices in the public, private and academic sectors. With a distinctive approach that is collaborative, multi-disciplinary and multi-industry, PricewaterhouseCoopers draws from its broad perspective and capabilities across and beyond the health industries to help solve the array of emerging complex problems health organizations face, lead cultural and clinical transformation, and create a new sustainable model for care delivery that is quality driven, patient centered and technology enabled.
PricewaterhouseCoopers Health Industries’ clients include 40 of the top 100 hospitals in the U.S. and 16 of the 18 best hospitals as ranked by U.S. News & World Report; all 20 of the world’s major pharmaceutical companies; all of the top 20 commercial payers in the U.S.; municipal, state and federal government agencies and many of the world’s preeminent medical foundations and associations.
PwC has a network of more than 4,000 professionals worldwide and 1,200 professionals in the USS dedicated to the health industries. Our health industries professionals include a cadres of physicians, nurses , ancillary health providers and some of the nation’s leading minds in medicine, science, information technology, operations, administration and health policy.
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