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The changing world of healthcare

A sector in disruption shifts to focus on patients, prevention, outcomes and trust

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HEALTHCARE worldwide is changing. It is a sector in disruption, one that faces the universal forces of rapid digitisation, ageing populations worldwide, a greater prevalence of chronic diseases, and more informed and connected consumers.

But disruption births opportunity, as stakeholders of the health ecosystem – governments, healthcare providers, pharmaceutical and life sciences companies, medtech companies, insurers, and patients – begin thinking differently about healthcare.

EY describes this transformation as the sector's move to "Health 2.0, the consumercentric, outcomes driven, prevention focused future of healthcare".

Other estimates from PwC's Health Research Institute project global healthcare spending of US$18.28 trillion by 2040 and a worldwide shortage of 12.9 million healthcare professionals by 2035.

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Growth in demand is positive for healthcare businesses, but when it comes to healthcare, affordability, accessibility and the delivery of care become critical concerns for governments and businesses alike.

A key driver of rising healthcare costs is the world's rapidly ageing population. There are now more than 668 million people over the age of 65, making up 11.6 per cent of the world's population. By 2025, this group is expected to make up a third of a world population that is one billion people larger.

And while medical advances may be winning the fight against communicable diseases, the challenges and costs of treating non-communicable ones such as cancer, heart disease and diabetes, continue to grow, says Deloitte.

This is why healthcare stakeholders, as they envision new business and care delivery models, need to be "shifting focus away from a system of sick care, in which we treat patients after they fall ill, to one of healthcare which supports well-being, prevention and early intervention", says Deloitte's 2019 Global Health Care Outlook report.

"Healthcare organisations around the globe will continually face challenges to care for those they serve in smarter ways, emphasising preventive efforts, more access, a personalised approach and better quality and outcomes – all while being more efficient and cost-effective," says a PwC report on health industry issues.

"The lifeblood of meeting these challenges will be data and technology," PwC says. Integrating technology – artificial intelligence, smart medical devices and more – in a way that meets patients' needs is what top healthcare companies must now aim for.

In all this, trust will be critical. "Healthcare organisations must recognise that consumers' trust in their physicians and hospitals to secure their personal health information has eroded, so they should take extra measures to secure the information and how information is exchanged," says PwC. Indeed, these themes – of the shift to personalised healthcare and an emphasis on trust between patients and those providing them with treatments, medicines, and medical devices – are recurring ones in our conversations with the industry players featured in this edition of Who's Who in Healthcare.

From multinationals to Singapore-listed specialist groups, medical device providers to a range of local specialist physicians, surgeons and dentist, these leaders in their respective fields of healthcare and wellness offer a glimpse into how individual organisations are responding to, and taking advantage of, the sweeping changes transforming the global healthcare landscape.

Many of these trends shaping global healthcare are salient here in Singapore too. In addition, the private healthcare specialists interviewed also face the challenges of rising competition and business costs. The latest snapshot of the health services industry here from the Department of Statistics – which excludes pharmaceutical companies and other businesses – attests to this.

In 2017, the 5,607 hospitals, Western clinics, non-Western clinics, and establishments providing dental and other medical services raked in operating receipts of S$17.3 billion, contributing value-added of S$9.8 billion to Singapore's economy that year.

But their overall profitability ratio had fallen from 14 per cent in 2007 to 9.7 per cent in 2017. This drop in profitability was recorded across all segments. Even Western clinics, the segment with the highest profitability ratio in 2017 of 21.8 per cent, still saw a drop compared to 24 per cent in 2007.

This could be attributed to rising manpower costs, which accounted for close to half of the sector's business costs in 2017. But some also cite a slowdown in medical tourism from the region as a contributing factor.

"Increased competition from Malaysia and Thailand in healthcare services could potentially place pressure on the local healthcare market in the upcoming years," a December 2018 PwC report says. "The strong Singapore dollar against these regional currencies could make medical tourism in Singapore more costly, thus reducing demand from foreign patients," it adds.

Not that the competition daunts Singapore's players. They share in the pages that follow how they are differentiating themselves from competitors, local and foreign, with their medical and surgical skill and the promise of personalised support for each patient.

PwC concurs. "Despite the competition from our Asean counterparts, we expect continued growth in Singapore's healthcare sector given the reputation of the Republic's healthcare system, increasing demand led by its ageing population, as well as the growing affluence of the region."