Tackling financial instability within the healthcare sector
Goal 3 of the United Nations Sustainable Development Goals is ‘ensure healthy lives and promote wellbeing for all at all ages.’ Goal 3 recognises the fundamental role that finance has in achieving this, specifying that it aims to ‘achieve universal health coverage, including financial risk protection, access to quality health-care services and access to safe, effective, quality and affordable essential medicines and vaccines for all.’
As it stands, public health is in the midst of a financial crisis. It is a crisis that is not only at risk from a sustainability perspective, but one that is having a catastrophic effect on global population health – including quality of life and overall health outcomes.
What is the issue?
The public health sector continues to face systemic and persistent financial challenges across its service network. Increasing pressure – as a result of spiraling healthcare costs during the COVID-19 pandemic and growing demand – has resulted in inequality of health outcomes, cuts to clinical services, increased wait times, and a large global population whose health needs go unmet.
Despite efforts to close widening gaps in health equity, ineffective financing systems for key services – including mental health support, drug coverage, health screenings and primary care – remain a barrier to progress. More generally, there exists an irrefutable need to reconfigure the operating models of struggling and constrained public healthcare systems.
The pandemic has highlighted the interconnectedness of our global populations, together with shared global health. Our global health ecosystem needs to be leveraged to tackle this global-scale issue.
What can be done to tackle financial instability?
Deloitte’s 2022 Global Health Care Outlook report states that the World Health Organization (WHO) and other aid groups have appealed to leaders of the world’s 20 biggest economies to fund a $23/4 billion plan to bring COVID-19 vaccines, tests, and drugs to poorer countries in the next 12 months. However, the issue is not confined to tackling the spread and effects of COVID-19: it must go far beyond this.
There exists a clear correlation between strong financial performance among healthcare providers and improved patient care, which is the strongest component to indicate quality and safety. As such, financially stable institutions and services are better equipped to focus on quality improvement and maintain reliable systems for patients.
The Organisation for Economic Co-operation and Development (OECD) reports that the health systems we enjoy today, and expected medical advances in the future, will be difficult to finance from public resources without major reforms. Mindset shifts – related to both operating and financial structures – need to occur.
For example, high-level interventions could include:
- Aligning funding and incentives – for both providers and insurers – with the prevention, health promotion and wellness
- Optimizing revenue for virtual health – via consistent reimbursement models, or risk-sharing arrangements connected to health plans
- Ensuring public health leadership leverage both existing and untapped sources of funding
- Investing in cross-party and cross-provider platforms and solutions that drive patients to appropriate care pathways, boost care delivery and focus on continuity of care – supporting healthcare providers, private insurers and retailers
- Streamlining government support, private equity funding, social impact investing, public health trusts, community development financial institutions, and environmental, social and governance investments – and incorporating these mechanisms into public health funding models
- Capitalizing on next-generation financial investment models that could promote health
- Encouraging and engaging patients to actively manage their own health – through the use of monitoring equipment, trackers and other tools – and to seek virtual health support where possible.
These measures need co-operation and buy-in from governments, funding bodies, public policymakers, healthcare leaders, health insurers – such as Medicare – and other relevant stakeholders if they are to be effective.
On a local and regional level – which vary greatly by country, GDP, population and an array of other metrics – healthcare leaders have adopted a variety of approaches and initiatives to increase financial stability:
- Eliminating waste and assessing allocation of resources
- Optimizing processes
- Condensing the range of services offered, including assessing numbers of inpatient and outpatient beds, clinicians within certain practice areas, etc.
- Divesting assets
- Seeking strategic partnerships and markets in which to grow service lines and leverage assets, including private equity firms
- Investments in necessary technology
- Automating payments and generating revenue by changing the ways in which suppliers are paid.
These measures are pressing: of the survey respondents, 46% reported that they only have 30-60 days cash on hand, and one in three are focused on cost-reduction as a strategic initiative.
What does investment in prevention look like?
Prevention is heralded as being one of the most cost-effective methods to sustainably maintain good population health. However, concerns surrounding initial costs to fund prevention efforts – combined with a perceived intangibility of evidenced outcomes – often results in inaction and health spending being diverted elsewhere. Despite this, prevention has the potential to deliver both short-term returns and longer-term benefits.
There are a range of highly cost-effective measures available:
- Determinants (non-medical factors that influence health outcomes): green space; employment; housing; transport; environment.
- Behaviors: physical activity; mental health; violence prevention; limitation of alcohol; tobacco control; healthy nutrition.
- Disease prevention: vaccination and screening.
Some countries have managed to guarantee protected budgets for public health services and preventative measures, and some receive dedicated, cross-sector funds from ministries of finance. Additionally, the WHO provides a financial planning tool designed to support low-income and middle-income countries to scale core interventions in order to tackle non-communicable diseases.
Gain the expertise to help build a more robust healthcare system and tackle health inequalities
Are you keen to remove barriers to healthcare and address soaring costs within the sector?
If you are interested in helping to combat financial instability within healthcare services, choose the University of the Commonwealth Caribbean’s online MBA Healthcare Management programme.
Created for individuals seeking senior leadership positions within the health sector, this flexible degree programme at UCC combines business and leadership expertise with specialist modules in healthcare management. You will develop the skills required to succeed in this ever-evolving, challenging industry, applying your insights into organizational workings and healthcare knowledge to innovation, decision-making and problem-solving. The UCC MBA in Healthcare Management will include courses that encompass healthcare delivery, quality control and management, healthcare expenditure and budgets, health policy, finance, strategy, operations, and more.