Siemens Financial Services (SFS), has analysed the gap between healthcare costs and capabilities.
The analysis results illustrate that healthcare delivery costs worldwide have grown over the last eight years and continue to outpace the development of Gross Domestic Product (a key indicator of a country’s ability to fund healthcare).
The analysis results illustrate that healthcare delivery costs worldwide continue to outpace the development of Gross Domestic Product
This reflects the continuation of a long-term trend. Furthermore, the pace of cost growth has significantly accelerated, exceeding inflation by a considerable margin.
The Graph below (figure 1) below plots the growth of healthcare delivery costs since 2016 and compares it to growth in gross domestic product and inflation, illustrating the continued widening of the gap between healthcare costs and the national resources needed to pay for them.
Figure 1: Growth of healthcare delivery costs since 2016 and compares it to growth in gross domestic product and inflation
Accelerants of healthcare spending felt in common by all healthcare systems include an ageing population, rising rates of chronic conditions, advancements in medicine and new technologies, staff shortages, regulatory and sustainability requirements, inflated energy costs, generally higher prices, and expansions of health insurance coverage.
The cumulative legacy of those factors has to be managed – to secure the long-term financial sustainability of healthcare systems.
Changing patterns of demand require a pivoting of services and resources. Everywhere, health professionals are seeking to harness new ways of working and modern technologies to deliver better patient outcomes at lower cost.
However, reforming healthcare provision around the world comes at a price. If the capital burden of new technology acquisition could be softened, and precious funds not tied up in depreciating equipment, then healthcare systems reform, improvement, and efficiency could be achieved more quickly.
Reforming healthcare provision around the world comes at a price
This is where the power of specialist financial services comes into play.
Penny Pinnock, Business Development Manager, Siemens Financial Services, said: “Financial efficiency is as important as technological efficiency. If capital costs can be converted into operating costs (by harnessing third party capital), then healthcare organisations can transform without tying up their financial resources.
“For instance, energy-efficiency initiatives can be financed by harnessing future savings in a flexible financing structure. Existing equipment can be upgraded to superior performance standards. This is how flexible, private sector finance can enable transformation and new ways of working.”
Methodology
To illustrate the continued widening of the gap between healthcare costs and healthcare resources, Siemens Financial Services (SFS) created an index of healthcare spending to compare with indices of inflation and Gross Domestic Product (GDP).
GDP is an indicator of resources available for healthcare spending, whether for state/taxation-derived healthcare systems or those structured on health insurance policies. Index comparisons cover the eight-year period 2016-2024.