Medicare Across Borders

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Medicare Across Borders

    New Consumer Trends in

    Global Health Care

    The Flattening of the Healthcare Landscape

     November, 2009

    Confidential property of UnitedHealth International. Do not reproduce or redistribute without the expressed written consent of UnitedHealth International. Copyright ? 2007 UnitedHealth International. All Rights Reserved.

New Consumer Trends in Global Health Care

By Stephen Gage

    Countries around the world, both industrialized and developing, are making dramatic systemic changes to the way they deliver and finance health care. All of them can learn a lot from U.S. models.

    Ori Karev, CEO of UnitedHealth International, has news for author Thomas L. Friedman. Friedman declared that ―the world is flat‖ in his book of that name. He coined the phrase in terms of the

    world’s economy, pointing out how India, China and other developing countries with emerging economies have joined the highly industrialized western countries to create a global supply chain for manufacturing and services.

    But now, more and more, health care is contributing to the flatness of the world as well, says Karev. After all, most of health care is science, and science is culturally agnostic. It doesn’t matter whether a man in China or a woman in the United Kingdom has liver cancer; they both have liver cancer, period, and all things being equal, there are best practices for treating it. Modern medicine has the science behind such condition-based treatment, and those practices are being disseminated across the global medical community. ―The fact of the matter is,‖ says Karev, ―health care delivery is a system that follows the rules of science, and it can be managed. Whether they are highly developed western countries coming from socialized medicine, or emerging economy countries in Asia, Africa and South America with little health care structure, there are systemic rules that apply to optimizing health care delivery.‖

    One need only look at several high-profile systems to see what is happening. In the United Kingdom, the nationalized health care system is on shaky ground. Care is rationed, patients have to wait sometimes long periods for treatment and service, and outcomes - at the societal level are not

    consistently optimal. Although the UK usually is considered the standard-bearer for nationalized health care, the reality is that privatization has increased dramatically in the last decade because the centrally controlled system has not fully met people’s medical needs while, at the same time, costs have risen to unsustainable levels. So increasing numbers of people in the UK are going outside their government-sponsored health systems for treatment, and paying for it with their own money or through private insurance. Surprisingly, private health spending in the UK is now roughly equal to public spendingand perhaps even more surprisingly, the same holds true in the US.

    On the other side of the world, both literally and economically, increasing numbers of wealthy and newly emerging middle-class people in emerging economy countries are using personal wealth to purchase health care simply because they have no other option. For example, in the past decade, China has emerged as a true world economic superpower. With that, a middle class with disposable income has begun to grow and as it has, it has begun to seek better health care services. But this is taking place in a health care delivery and financing environment that has not yet caught up with the new demand. The result is a rapidly emerging, private cash economy for health care services.

Confidential property of UnitedHealth International. Do not reproduce or redistribute without the expressed written consent of UnitedHealth International.

    Looking at yet another situation, it has long been the custom in countries that have what colloquially is known as two-tiered economies, for so-called ―elites‖ to travel outside their countries to seek

    world-class health care. Wealthy people from Latin American countries, for example, have routinely traveled to leading US health centers for secondary and tertiary care, and have paid for it out of their own pocketsregardless of the health care system in their own countries.

    These scenarios are playing out in one form or another in many of the countries of the world, from the Netherlands to India, from Canada to South Korea. Personal health consumption is rising as the world grows in wealth and people increasingly are willing to pay a larger portion of their personal income to purchase it.

Why should Americans care?

    For one, what might be of intellectual interest to America, which is in the throes of health care reform efforts, is the fact that although arising from different circumstances, these scenarios have at their core a shift in individual health caretoward private spending and away from public funding,

    toward personal responsibility and away from government auspices. For another, as a practical matter, America’s is not an insular economy any more. Many American companies either have

    employees living and working outside the country, permanently or on assignment, or they have executives who frequently travel overseas. Some 50 percent of the earnings of Standard and Poor’s

    500 companies alone come from outside of the United States. These global companies are faced with the same issues every American company is faced withhow to keep its workforce healthy and


    It all speaks to the essential nature of health care. Are there universal dimensions of health care that transcend geographical and cultural borders? Are there core elements of maintaining good health and treating illness and disease within certain economic principles? ―The empirical data suggest

    there are, especially as you move up the pyramid of health care from basic health and safety requirements to more sophisticated clinical treatment,‖ says Karev. ―There are elements of health care that simply obey the laws of science, regardless of language, location or tradition.‖

    Probably of particular interest to economists, public policy makers and health care providers is the fact that the most sophisticated clinical services are the most effective and, often, most in demand; the da Vinci robotic surgery device. Not surprisingly, they are also are the most expensive and, all too frequently, the shortest in supply. But these same services, because of their newness, are also the most manageable. Access, quality and cost effectiveness can be achieved with a systematic approach to supply and demand. The managed care industry can corroborate that to health systems in America and around the world.

    UnitedHealth International has found many instances of the need for these types of processes, management disciplines and applications. For instance, a UnitedHealth Group company, Ingenix, the largest health care data and analytics company in the world, has supplied demand management analyses through predictive modeling algorithms to national health systems in Western Europe. This

Confidential property of UnitedHealth International. Do not reproduce or redistribute without the expressed written consent of UnitedHealth International.

    is a systems way of looking at health care delivery and it doesn’t matter if it is done in the UK or in an emerging economy country. Wherever it is utilized, predicting what the health care needs of a population will be and making sure best practices are in place drives the best outcomes and the most efficient systemthat is, the lowest cost.

    UnitedHealth International also has worked with hospitals and national health ministries in emerging countries to provide the most basic levels of health procedure coding systems to begin the process of data collection and knowledge management. And it has worked with purchasers and third-party administrators of private health care delivery systems around the world to ensure that best practices and evidence-based medicine standards are utilized to produce quality and efficiency. ―That’s s a big

    issue in the US, but it’s a huge issue outside of the US,‖ says Karev. ―There are universal practices that just need to be promulgated.‖

    Such is the world of health care today. It logically, universally follows the laws of science and it therefore demands and allows for a process for managing it.

    The challenge for people in positions of leadership in health care around the world, whether on the public funding side, the private insurance side or the delivery side, is to recognize, adopt and optimize best practices. Can this massive phenomenon be managed? Yes. The tools, the technology and the talent exist to provide the best health and health care delivery possible to every kind of medical system in the world. What is needed is management discipline, the will to maintain it and the ability to sustain it.

    The ultimate goal is extraordinarily simple: to manage resources and to use systems to make and keep people around the world as healthy as possible, as cost-effectively as attainable.

In doing so, the world will become flatter still.

About the author:

Stephen Gage is the Chief Marketing Officer of UnitedHealth International, a UnitedHealth Group company.

    In this capacity, he is responsible for leading UnitedHealth International’s global branding, marketing and

    communications, advancing its position as the leading global health and well-being Company. For additional information, contact Nancy Calderon at +1 860.702.6614.

Confidential property of UnitedHealth International. Do not reproduce or redistribute without the expressed written consent of UnitedHealth International.

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