World's wealth will add to health burden

At the start of the 20th century, the global average lifespan was 31 years. Today, it is about 70. This is in large part testament to better healthcare. Diseases such as polio and measles have been tamed by vaccines and, in the case of smallpox, eradicated.

Yet these 20th century breakthroughs mean the world faces a fresh challenge in the 21st. While fewer people are dying of infectious diseases, growing numbers are living long enough to develop chronic conditions such as heart disease, cancer, diabetes and dementia.

This is true not just of rich countries such as the US, where 86 per cent of healthcare spending is directed at non-communicable diseases, but chronic conditions account for about 60 per cent of global deaths each year, three-quarters of them in developing countries.

This burden will only increase as economic development exposes more people in Asia, Africa and Latin America to factors such as sedentary lifestyles and greater longevity. The number of people on the planet aged over 60 has doubled since 1980 and this group will account for more than one in five of us by 2050, the World Health Organisation says.

A growing supply of affluent, ageing people susceptible to chronic diseases might seem like a recipe for growth for the healthcare industry. Healthcare spending in China, for example, is forecast to rise by 14 per cent a year between 2013 and 2017, the Economist Intelligence Unit says. Even the mature US market is likely to grow by an annual average of 4.4 per cent in the same period.

Yet these rising costs put a strain on governments, insurers and patients, and raise doubts over the sustainability of existing healthcare models. From rationing of cancer drugs in the UK's National Health Service to increasing out-of-pocket expenses for US patients, evidence of this is visible across the developed world. Cost pressures are no less severe in developing countries.

Kare Schultz, chief operating officer of Novo Nordisk, the world's biggest maker of insulin for diabetics, says rising costs are leading to a convergence of healthcare systems, with all countries sharing the burden between public spending, private insurance and patient self-funding. "Europe is moving a bit towards the US system and the US is moving a bit towards the European system, and China will arrive in the middle," he says.

Price pressure is nothing new in Europe's single-payer public health systems, which have long used their negotiating power to force a 30-40 per cent discount in the price of medicines compared with the fragmented US market.

But there are signs that even the US has become more cost-conscious since President Barack Obama's push to widen access to health insurance through the Affordable Care Act. A backlash by politicians and insurers against the high cost of new hepatitis C medicines is one example.

The tabular content relating to this article is not available to view. Apologies in advance for the inconvenience caused.

This environment is forcing drug companies to work harder to prove their products and services deliver measurable patient benefits at an affordable cost. And efforts are intensifying to cut the cost of developing a new drug - estimated to be $2.56bn on average.

There are hopes that the rise of digital healthcare technology and the accompanying proliferation of patient data can help provide solutions. Mobile apps and sensors hold the potential not only to provide real-time information on an individual's health but also to reveal population-wide trends that could increase the efficiency of medical research and care delivery.

Yet there is a big gap between the promise of this revolution and the reality of today's healthcare infrastructure. Pascale Richetta, vice-president for western Europe and Canada at AbbVie, the US drugmaker, says too many resources are spent on expensive hospitals designed for acute, rather than chronic, care. "We need to move care delivery away from hospitals to the home and community," she says.

Ms Richetta adds that there must be a greater focus on disease prevention and early diagnosis, and cites the example of outpatient centres set up in Spain to provide early intervention against musculoskeletal disorders, such as back pain. These are estimated to have saved €11 for every €1 invested by reducing long-term care costs and work absenteeism.

"It is important to view healthcare spending not just as a cost but as an investment. The emphasis should be on getting good value from that investment," says Ana Nicholls, healthcare specialist at the Economist Intelligence Unit.

By that measure, some countries are doing better than others. The EIU's Health Outcomes and Spending Index last year ranked Japan and Singapore among the best performers for outcomes and value for money. The US, in contrast, had only the 33rd best outcomes, below Lebanon and Costa Rica, despite spending the most per head of the 166 countries studied.

The index highlighted the gulf in spending between $9,216 per head for the US and $96 for bottom-placed Sierra Leone - one of the countries worst hit by the Ebola outbreak. Ebola has been a reminder that the medical advances of the past century are not evenly shared. Life expectancy in Africa has fallen since the 1990s because of Aids.

New drugs allow people with HIV normal lifespans, and promising vaccines and treatments for Ebola are being rushed into trials. There have been break­throughs in chronic diseases such as cancer. But the science may prove the easy bit compared with meeting the demand for affordable treatments.

© The Financial Times Limited 2015. All rights reserved.
FT and Financial Times are trademarks of the Financial Times Ltd.
Not to be redistributed, copied or modified in any way.
Euro2day.gr is solely responsible for providing this translation and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation