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An Economist’s View – How Innovation Can Really Help Healthcare

Mitch Higashi, GE Healthcare’s Chief Economist, who took on the topic of 'healthy aging' at the Uppsala Health Summit.

Mitch Higashi, GE Healthcare’s Chief Economist, takes on the topic of ‘healthy aging’ at the Uppsala Health Summit.

“Prevention and productivity are the next frontiers in healthcare innovation”, says Mitch Higashi, GE Healthcare’s Chief Economist, who takes on the topic at the Uppsala Health Summit on ‘healthy aging’ this week, where experts, opinion leaders and decision-makers have gathered to share insights into current healthcare dilemmas.

“The increasing demand on our hospitals to achieve more with less money will create a disruptive decade for the healthcare industry. Medical advances mean that people are living longer, but chronic diseases are becoming more common in our aging populations.  The financial pressure will require new approaches to unlock the productivity potential of our healthcare system” explained Higashi.

Globally in 2013, $8 trillion dollars were spent on healthcare. According to an internal study carried out by Higashi, the world is heading towards a $12 trillion dollar per year healthcare spend by 2020. However, austerity measures throughout the European Union have created a potential shortfall of around 1 million healthcare workers by 2020, creating a 15% gap in the labor supply – equivalent to every healthcare worker in the EU working an extra half day per week for free.

To avoid this scenario, Healthcare 2020 must meet three goals for aging communities:  delay the onset of costly and debilitating disease, extend & maximize healthy and productive years, and deliver these big gains cost-effectively.

The new era of big data will be a key enabler, as new analytic methods are applied towards challenges in population health and system productivity.  A GE white paper published in 2012 estimated that a 1% increase in global healthcare efficiency would generate savings of $63 billion.1

“Our policymakers need to ensure that the regulatory framework, currently undergoing a major revision in Europe, allows innovative products to get to market in a timely manner while also enhancing patient safety. Providers and policymakers can also play a more active role in directing innovation towards prevention and productivity targets, not just clinical targets. The future has to lie in more integrated healthcare networks and a society where healthy aging is a priority.

“With a predicted 20% of Europeans being 65 or older by 2025,we need to innovate to keep people out of hospitals, so not just looking at how to treat these people once they are afflicted, but how to actually prevent or delay the onset of costly and debilitating diseases, and to extend and maximize healthy and productive years. That will be the true measure of success for future innovations in healthcare.”

References

1 – http://www.ge.com/docs/chapters/Industrial_Internet.pdf

2 - http://ec.europa.eu/health/population_groups/elderly/index_en.htm

More Information

Uppsala Health Summit