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SPOTLIGHTS
Sustainable Healthcare Financing in ASEAN
On 9 March 2020, Sanofi and KPMG launched the first sub-paper to the overarching report on advocacy principles: Driving Comprehensive Healthcare Policy in ASEAN published in 2019. The papers aimed to highlight advocacy principles in providing affordable and accessible healthcare in the ASEAN region.
by Deborah Seah

Ageing populations and emerging infectious disease puts a heavy strain on healthcare systems across the world. Particularly in the Southeast Asian region, the countries within the Association of Southeast Asia Nations (ASEAN) together accounts for almost 650 million lives. Between 1998 and 2010 there has been an increase in health expenditure within the region by 250 percent. This alarming increase warrants the need for evaluating the sustainability of healthcare expenditure in ASEAN as well as setting solutions for better spending to reconcile any inefficiencies.

The sub-paper present by KPMG and Sanofi – Sustainable Health Investment as an Economic Driver: The Time for ASEAN to Act is Now – drew close attention to main issues that may be stumbling blocks to achieving sustainable healthcare financing for the region. Recommendations were also presented in the report for healthcare systems in the ASEAN region.

It was highlighted in the sub-paper that despite the huge increase in healthcare expenditure across the region, life expectance and Universal Health Coverage (UHC) index scores remain low compared to other developed nations.

Sustainable Healthcare Financing: Key Issues

1. Unprecedented Demand for Healthcare

It is projected that within the ASEAN region 70 million people will be over 65 years old by 2030. With advancing age comes the inevitable rise in age-related disease such as cardiovascular disease, cancer, and diabetes, just to name a few. Besides the increase in non-communicable diseases, emerging infectious diseases such as the recent COVID-19 global pandemic has proven to be disastrous for unprepared healthcare systems. The region also has to be ready for healthcare demand during re-emergence of some infectious diseases such as measles and polio in recent years.

2. Inefficiencies in the Healthcare System

Lack of investment in cost-effective healthcare services such as primary care, long-term care and preventive care is one notable point as part of the inefficiencies in the healthcare system. These services will better empower patients in self-management of their disease and conditions, reducing the need for hospitalizations and allowing more convenient and efficient care between the doctors and patients. Other preventive programmes such as immunisations typically are still falling behind in terms of budget allocations compared to treatment infrastructures.

Another inefficiency highlighted in the sub-paper is the underutilisation of advanced healthcare procurement techniques. This will cause deficiencies in the healthcare system as most ASEAN countries still use provider payment mechanisms for the procurement of healthcare services. An alternative would be to explore the use of a mixed provider payment mechanism.

Digital transformation and technological advancements are no stranger to the healthcare industry, however pricing controls on medical technology has shown to hinder efficient use of healthcare spending.

Shifting priorities to developing the healthcare workforce as compared to healthcare infrastructure development was also highlighted in the sub-paper. The healthcare industry is driven by its workforce of healthcare professionals and should not be overlooked when assessing inefficiencies in the healthcare system.

3. Unsustainable Financing Base

Growing ageing population and the expanding informal economy in the ASEAN region exacerbates the shrinking taxable workforce in countries. As the financing of healthcare needs are depended on a large extent on taxation, it is critical for countries to re-evaluate this area for sustainable financing of healthcare systems.

Recommendations for the ASEAN Region

The following were the key recommendations mentioned in the sub-paper by KPMG and Sanofi:

1. Rectifying Inefficiencies in the Existing System

a. “Health-for-Wealth”

This recommendation encourages governments to bring healthcare priorities to the forefront by shifting the perception of healthcare as a fundamental driver of the economy. Proven links between population health and GDP have shown that promoting a healthy workforce through public health policies will allow for a more sustainable workforce to support the economy and the ageing population.

b. Reinforce Focus on Prevention Programmes

More emphasis should be placed on prevention programmes such as immunisations and public health interventions to encourage health lifestyles. Vaccinations would be one such intervention to be prioritised as it serves as a line of defence and herd immunity against infectious diseases.

Funding for public health programmes could also be prioritised to encourage the population to make choices in support of a healthy lifestyle. These programmes are especially crucial to be specific to the individual country’s needs as disease prevalence will differ depending on population and various risk factors available. Through these interventions the risk of non-communicable diseases could be mitigated thereby reducing the burden on healthcare systems. Public health programmes could also serve to raise awareness of prevalent diseases in the country and providing people with the information on how to best prevent it.

Supporting early detection and diagnostics, especially for age-related diseases is another key component. The use of digital and analytics tools can help to identify high-risk groups that need targeted screening. This will help in early diagnosis, and improve chance of survival when treatment is implemented early, thereby lowering and mitigating any unwanted costs.

c. Next Generation Healthcare Delivery Models

Boosting primary care could provide an effective frontline for healthcare systems, reducing the burden on hospital facilities. Promoting self-care or self-management could help to ease the load on healthcare facilities and encourage patients to take charge of their condition or disease.

Providing patients with the right tools to empower self-management is therefore key in this healthcare delivery model. The need for technological innovation and digitalization will provide powerful tools for patients to have access to health information for effective self-care. Other digital health tools such as those that support telemedicine, self-management of diabetes, and even patients with mental illnesses could be possible investments for governments to look into to achieve a sustainable healthcare system.

d. Investing in the Healthcare Workforce

Empowering all healthcare professionals long the value chain through public and private sector collaborations can help to boost sustainability in the healthcare system. On top of that, encouraging more to join the healthcare industry through government initiatives can also help to meet the growing demand for healthcare.

2. Re-evaluation of Core Financing Model

Recommendations on the evaluation of the core financing model in ASEAN were also made in the sub-paper. Looking into the core financing model of healthcare, countries within the ASEAN region could develop efforts with revenue collection and scheme contributions. Heavier tax on products that are harmful to health could be used to invest in public health programmes or cater for premiums and schemes for people in the informal economy.

It was recommended that a composite fundraising model would provide more sustainability in financing by not purely relying on taxation or scheme contributions for revenue.

The healthcare industry is a complex system with multiple levels that require the collaboration of governments, private organizations, and the people to achieve sustainability and meet growing demands. The advocacy principle laid out in this sub-paper by KPMG and Sanofi would thus provide a framework for ASEAN countries to work on for sustainable healthcare financing for the future.

Reference

EU-ASEAN Business Council, (9 March 2020). Sustainable Healthcare Investment as an Economic Driver: The Time for ASEAN to Act is Now.

 

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