Tackling healthcare for the very poor
This year in Davos, there is a lot of talk about transformations and new business models that will be important in our global economic recovery. In healthcare, new models will be a significant part of expanding access to patients in need. While it is clear there is lots of growth potential in emerging markets, it’s also important to address the larger societal challenges associated with this growth. This is especially true in the developing world where access and affordability are major issues.
Nearly half of the world’s population lives on less than $2 per day. I was recently in India, where I got to see firsthand what this means. According to the latest estimate from the World Health Organization, there are more than 835 million people across rural India — more than twice the entire population of the United States. Only 35 percent of these people have access to essential medicines. For those of us in the developed world, this is a seemingly unimaginable gap.
As CEO of a global healthcare company, I believe it is critically important to help improve the health of people everywhere by expanding access to medicines in a sustainable way. However, there are many obstacles to delivering care in developing countries, and overcoming them requires adapting to local needs. Poor infrastructure, poverty, inadequate sanitation systems, unclean drinking water and a lack of trained health workers all compound the problem. The question is: With problems so large, how can we be part of the solution?
At Novartis, we realized it was important to take a step back and consider not just how we can enter a market but also how we can adapt to better consider local conditions. We saw that there was a need for a new model in emerging markets like India. That is why we developed Arogya Parivar, meaning “healthy family” in Hindi. This is what we call a “social business” model, meaning it blends corporate citizenship with entrepreneurship.
While many have highlighted the cost of medicine, there is not enough emphasis on solving the associated distribution and social challenges. Arogya Parivar addresses what I believe are the two most important issues in developing countries: healthcare education and infrastructure. The program works by recruiting and training locals to become health educators and tour villages, schools, and health centers. They conduct community health meetings and talk directly to patients about disease prevention and encourage them to seek timely treatments. Also, the local teams address the infrastructure issue by organizing health camps — mobile clinics that provide access to screening, diagnosis and therapies to patients in remote villages who don’t have regular access to healthcare. In 2010, we hosted more than 3,000 health camps, reaching an estimated 140,000 people.
To make treatments more available and affordable, we also sell over-the-counter medicines in smaller packs with doses for only one to three days. While patients need to purchase the packs more frequently, one local doctor mentioned that this helps them better track a patient’s compliance and helps keep weekly out-of-pocket costs low. Importantly, this initiative turned profit-positive this year after four years of losses. This is critical for its sustainability.
Our model is based on the understanding that access to medicines in the developing world is bigger than a pricing issue. Insufficient infrastructure and lack of healthcare access are larger problems that need to be addressed. What is needed is entrepreneurship that creates jobs, expands access to health education and works closely with patients in the context of local customs. Health solutions must be tailored to meet diverse local needs.
Making the business case for a healthy workforce
The role that today’s workplace plays in health and well-being is often debated. People spend much of their time at work, and wellness at work matters. Employers generally find that healthy employees contribute to business success, but the exact quantitative relationship between improvements in employee health and corresponding improvements in employee productivity and engagement remains elusive.
At the same time, employees around the globe are increasingly subject to non-communicable diseases – primarily cancer, heart and chronic pulmonary diseases, and diabetes. Many such diseases have their root in obesity or tobacco use, and thus to a large extent are preventable. Worldwide, non-communicable diseases cause an estimated $2 trillion in losses each year in economic activity, as well as the premature deaths annually of 18 million people still in their productive years. That’s why the World Health Organizations tags such non-communicable diseases as “the world’s biggest killer.”
For the past two years, the Workplace Wellness Alliance has been tackling the problem. Triggered by a call to action during the 2010 World Economic Forum, this consortium began with 13 companies and now has more than 100 major global employers representing 4.5 million employees worldwide, all dedicated to ensuring that – regardless of country or industry – optimum employee wellness is a priority in the workplace.
As the consortium has grown in size, so has its influence. In fact, the corporate social responsibility newswire CSRwire recently named the rapid growth of the Workplace Wellness Alliance as a “Top 10 CSR Moment of 2011.”
Specifically, the Alliance is helping establish a global standard of wellness – through metrics and best practices contributed by its member companies – to improve workforce health and productivity. Already, it has collected homogeneous health metrics from more than 150,000 employees across 20 global companies. These will help establish a measurable global workplace health baseline and provide the structure, tools and processes essential to maximize efforts against chronic diseases. It also has established a database of real-life case studies that describe successful workplace wellness programs.
It’s a critical effort. In the U.S., chronic illnesses affect more than one in three workers, with treatment costs accounting for about 75 percent of our national healthcare spending annually.
The consequences are equally dire elsewhere. In the Russian Federation, every employee on average loses 10 working days a year to chronic disease and injury. In the United Kingdom, the cost of mental ill-health to employers was estimated at 25.9 billion British pounds in 2006. The societal implications are far-reaching as well. In Taiwan, if you’re diagnosed with diabetes or cardiovascular disease, your chances of being hired are reduced by 19 percent and 27 percent, respectively.
There is no “business case for a healthy workforce”.
It’s an oxymoron.
The only rational “business case for a healthy workforce” is to quietly get rid of an employee when he/she (or their family) becomes a healthcare burden to the employer, since it directly affects the bottom line.
This also includes the ongoing need for “preemptive action” on the part of an employer to keep its employee base as young as possible, since an older workforce tends to cost more, but without generating any additional efficiency that drops profits to the bottom line for investors.
US jobs are “outsourced”, not only because of direct labor cost, but also to avoid having to pay the “overhead” associated with a US work force, which includes, among other things, health care costs that are rising rapidly each year.
No matter how you look at it — from a financial investment standpoint — maintaining a business in the US versus overseas is a lose-lose proposition.
And, taking the US economy as a whole, the fewer individuals insurance companies have to spread the risk over, the higher the healthcare costs to the employer.
Then the cycle begins again, ad infinitum.
It’s the dirty little secret about healthcare no one wants to talk about, but it exists nevertheless.
What we REALLY need to do is to take the employer out of the equation altogether, thus reducing business overhead costs, which are a direct conflict of interest for any employer, and then we can REALLY focus on a “healthy workforce”, plus a whole lot of other social problems that contribute to an unhealthy US workforce.
The underlying problem is that neither government nor business can seem to understand that maintaining this employer-based health care system is destroying this country, no matter how you choose to look at it.
What we REALLY need is a healthcare system like many European countries, which would probably give us better coverage for less cost.
The underlying problem is that moving to a healthcare system that really works, would gore too many “sacred cows” in the healthcare industry.
What we REALLY need is way to force healthcare changes on an industry that is unwilling to reform itself.
The underlying problem is the healthcare industry has too much clout with the federal government to ever allow that to happen.
Which brings us back to square one again — a massively overburdened healthcare system, that delivers poor results, and costs a fortune to boot.
Privatizing this system is guaranteed to make matters even worse than they are now — just like privatizing other industries has done. It is NOT the solution.
Why doesn’t someone tell the truth for a change as to what is really wrong with our healthcare system?
Recognizing the problem would at least be a start to correcting it, which would be a lot further than we are today, since we are clearly moving in the opposite direction from any solution that will work.
PseudoTurtle
CPA/MBA
-
Resident Davos Expert
-
Pharmas are not compassionate, they are bottom line.