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Western healthcare models ‘not value’ for emerging economies, says KPMG

 By Judith Ugwumadu | 24 January 2014  

Emerging economies face major long-term financial problems if they try to replicate Western hospital-based models of healthcare, KPMG has warned.

Its report, Necessity: the mother of innovation, highlights significant underlying financial weaknesses in the health systems in developing countries including South Africa, China, India, Kenya and Rwanda. 

The firm found that emerging economies had copied western-style healthcare models built around high tech and secondary care interventions, but it argued that the ‘volatile’ nature of rapidly developing economies means many of these systems are failing to translate this high-cost, hospital-based approach into real value. 

KPMG said emerging health systems should instead work on developing flexible, community-focused solutions.

Mark Britnell, chair of KPMG’s global healthcare practice, said: ‘The last decade has seen a huge explosion in the number of people moving from poverty to financial independence. Over a billion people, with a combined wealth of $33 trillion, are now thought to belong to this new population bracket. 

‘Such a major demographic shift is putting massive pressure on health systems. We don’t believe that they can respond to these challenges by copying what is already out there. To be sustainable they need to find innovative new ways to respond to these changing demand patterns and escalating costs.’

The report highlights six key areas that emerging health systems should focus on in order to keep costs down without compromising quality. Among these is the suggestion that they should redesign staff roles, introducing new processes and training to maximise their use.

Other suggestions include: the adoption of new pathways to separate out complex from routine work; identification of ‘bottlenecks’; and increased use of technology such as smartphones and portable diagnostics to bring services closer to patients. 

According to the report, countries and systems that take a whole-systems approach to health care, using community care models and payment regimes that focus on population health improvement, are the ones most likely to deliver affordable, sustainable, high-quality care.

Sven Byl, co-author of the report and KPMG’s head of healthcare for the Africa region, explained: ‘We found that in many cases health system architects have focused on one part of the value chain, for example low-cost estates or well-developed care pathways. 

‘However, expensive medical technology or inappropriate skill mix has held them back and prevented them from delivering equitable improvements at sustainable cost.

‘Those systems that have managed to see the whole jigsaw, put the pieces together in right order and move beyond simply looking at “low cost per transaction” are the ones who are really reaping the benefits.’

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