Healthcare costs around the world are increasing. In 2013, the total global healthcare spend was $7.2 trillion, or about 11 percent of the world’s gross domestic product. This figure is set to climb more than 5 percent a year for the next few years.1 In the U.S., costs are expected to rise to $4.8 trillion by 2021, accounting for almost 20 percent of the country’s GDP.2
Unfortunately, it’s not an efficient use of money, either — in the U.S. more than a quarter of the total hospital expenditures accounted for were administrative costs and that number is increasing. The U.S. outpaced the Netherlands (19.8 percent) and England (15.5 percent) ranking second and third highest — if the country could reduce its overhead spending to the lower levels found in Canada or Scotland, the country could reduce spending by $150 billion.3
That’s why governments, healthcare systems, health insurance companies, and other organizations are experimenting with wide-scale, new approaches to decrease health costs, which now stand at $948 per person a year globally.4
As a global organization that works with stakeholders and professionals across the healthcare system, Medtronic is stepping forward to put the full power of our technologies, services, resources — and our people — to work with new partners, in new ways, to usher in a new era in healthcare.
We are working with the global healthcare community to take our technology, services, and insights and fashion them into solutions that either drive operational efficiency within the healthcare system or augment the delivery of care through better patient care management. We are forging new types of relationships with healthcare providers and payers who are committed to building models that improve patient outcomes and reduce costs.
“The best hospital bed is an empty one,” Don Berwick, former administrator of the U.S. Medicare and Medicaid programs, has said on many occasions.5 He argues that in a fee-for-service model, hospitals aim for volume of care, as this is how they stay profitable. But as nations around the globe turn to value-based healthcare, systems are embracing new strategies to get patients through hospitals as quickly as possible or keep them out of the hospital altogether — all the while providing the best patient care possible.
Our Integrated Health Solutions team started working with medical facilities more than two years ago to increase throughput and drive healthcare efficiencies by better managing cardiac catheterization (cath) labs inside hospitals and make them more efficient so that more patients can be treated.
At the Imperial College Healthcare NHS Trust in the UK, the Medtronic team renewed aging cath lab equipment with the most innovative medical technology available, and optimized daily operations to show significant value creation — including efficiency savings — estimated at £840,000 in the first year.
Based on this success, this program has been replicated in other global markets — with over 50 cath labs being overseen by the Medtronic team, which is efficiently managing $1 billion in cardiac care.
Outside of cath labs, we’re applying our therapy and disease state expertise across the entire hospital while supervising overall operations. Through our work in this area with Maastricht University Medical Center in the Netherlands, Medtronic has helped the hospital save about $6 million during the first year of our work together.
We also work with patients outside of the hospital altogether, leveraging the power of technology to produce more integrated care. Keeping in mind the idea that the best hospitals are empty ones, the largest integrated healthcare system in the U.S., the U.S. Veterans Health Administration (VA), is using a range of telehealth services — including Medtronic’s Care Management Services — to serve specific patient subsets of its 23 million patient population. To date, the VA’s telehealth program has delivered a 20 percent reduction in expensive hospital admissions and a 25 percent reduction in hospital bed days.6
In addition, Medtronic recently acquired the Netherlands-based company Diabeter — which uses high-tech and high-touch solutions to manage the care of people living with diabetes outside of the hospital setting.
While we firmly believe Medtronic has a unique role to play in the move toward aligned, value-based care, we know we can do more. We have the ability to create powerful new technologies and services to achieve better outcomes for patients at a reduced cost. And, we fundamentally recognize that no one single entity can completely move the health system in this direction. Only through collaboration and partnership can we all achieve the benefits of value-based healthcare.
Our commitment to driving new forms of value in partnership with others is one more example of how Medtronic is prepared to go Further, Together.
Deloitte. 2015 Global Health Care Outlook. http://www2.deloitte.com/content/dam/Deloitte/global/Documents/Life-Sciences-Health-Care/gx-lshc-2015-health-care-outlook-global.pdf. Accessed September 8, 2015.
Centers for Medicare and Medicaid Services, National Health Expenditures Projections 2011-2021. https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsProjected.html. Accessed September 8, 2015.
Himmelstein DU1, Jun M2, Busse R3, Chevreul K4, Geissler A5, Jeurissen P6, Thomson S7, Vinet MA8, Woolhandler S9. A comparison of hospital administrative costs in eight nations: US costs exceed all others by far. Health Aff (Millwood). 2014 Sep;33(9):1586-94. doi: 10.1377/hlthaff.2013.1327.
World Health Organization. Spending on health: A global overview. http://www.who.int/mediacentre/factsheets/fs319/en/. April 2012. Accessed September 8, 2015.
East Carolina University News Services. Expert Opinion: Health reform can reduce costs, improve quality. http://www.ecu.edu/cs-admin/news/healthcare.cfm#.VeYMcZdTLHp. October 11, 2012. Accessed September 1, 2015.
Adam Darkins, Patricia Ryan, Rita Kobb, Linda Foster, Ellen Edmonson, Bonnie Wakefield, and Anne E. Lancaster. Telemedicine and e-Health. December 2008, 14(10): 1118-1126. doi:10.1089/tmj.2008.0021.