• Chris Hardesty, Director |

The year 2020 was, by many accounts, one of the most trying in recent memory.  But for those of us working in the healthcare field, while much blood, sweat, and tears have been shed, there is a silver lining – never has the level of focus on the intertwined nature of health and economy been higher.

This is an important notion because the healthcare industry is typically seen as a cost center when it comes to national planning.  True in both the developing world, where there is a disproportionately small allocation of resources provided to healthcare, and in the developed world, where there is much unnecessary wastage.  The time has come to bring healthcare to the forefront, into the new reality.

“S” stands for hope

In the Asia-Pacific, like in many other regions, country governments are focused on achieving the United Nations’ Sustainable Development Goals (SDGs), particularly #3, which pertains to implementing Universal Healthcare Coverage (UHC) programs.  This momentum accompanies a growing appreciation of the ‘health-to-wealth’ concept, by which a healthy population will help drive a country’s socio-economic growth.1

Unfortunately, due to the classic underfunding of health systems in the Asia-Pacific the UHC ambition alone represents a US$2 trillion investment.2  And we now have less than a decade to achieve the vision.

Yet, as our populations evolve, especially in a post-pandemic context, and health system structures become outdated, we wonder whether UHC alone is enough?  The “S” in SDGs is hence key – ensuring that the decisions we make today for the design of health system financing and delivery are with a future generation in mind. 

The gap is that many health reform initiatives focus solely on the demand side of things, often based on models from the west that were architected nearly a century ago.  As average life expectancy has increased dramatically, pressure on national resources is being drained by increasingly older populations riddled with chronic disease, often in comorbid fashion.  For instance, one can readily imagine the impact upon national health systems in some Pacific islands where diabetes prevalence is now as high as 40 percent.3 And, as COVID-19 has reminded us, we are certainly not out of the infectious disease trap either.

The paradox of advanced scientific knowledge, pitted against unattainable need, leaves healthcare as a primary driver of poverty. This is evident among those Asia-Pacific governments that now struggle to finance their healthcare systems, where it’s not uncommon to see citizens with out-of-pocket expenditures that represent 40% or more of the total healthcare costs.

Instead, and bearing the demand factors in mind, we need to look more deeply into the supply side.  Most health systems are financed through either taxation or employer contribution programs, both of which are fading fast due to government fiscal policy challenges and large informal workforces.  For example, few Asia-Pacific countries now meet the 15 percent Tax-to-GDP ratio, the threshold set by the IMF to enable sustained and inclusive growth.

Adverse selection renders many social insurance schemes powerless as people move in and out of the system only when they need the help.  And antiquated techniques around risk pooling, screening, and innovation valuation are squandering the billions and trillions of dollars already allocated to healthcare.

We have to do better.  Especially as population health literacies are improving following the modern pandemic, and the linkage between health and wealth creation is clearer than ever before.  To highlight just one example, a study by Johns Hopkins University concluded that preventative, life-course immunization programs yield a return of $44 on every dollar spent in low-and middle-income countries.4 With this compelling evidence that such investments harvest significant economic benefit, sustainability of program delivery is the key.

There’s a new program in town

With the above gap in health reform programs and existing SDG initiatives in mind, KPMG, Sanofi and the World Economic Forum are embarking on a new program in the Asia-Pacific to really nail down initiatives to take forward, seeking to unlock tactical efforts required for sustainable healthcare financing and delivery models.

With initial ASEAN Secretariat fieldwork to guide the frame of the program in 2019, we’ve completed the literature reviews in 2020 and are kicking off multi-stakeholder workshops in 2021. The workshops will take place in Singapore, Vietnam, India, China and Japan leading up to the Annual Meeting, now scheduled to take place in May 2021 in Singapore. 

The workshops serve as a primary research vehicle; in other words, stakeholders from across the public and private sectors are actively contributing to the final report. The report will be clear about the suggested initiatives to drive sustainable healthcare financing and delivery in the Asia-Pacific, which will then be actioned by taskforces accordingly. We are focusing on four main pathways – life-course immunization, diabetes, respiratory infection and rare diseases. Each represents not only a population health burden in the region, but moreover a conceptual challenge to the current design of our financing and delivery approaches.

In addition, and given the hybrid virtual working nature of the program, we are also running crowdsourcing campaigns to solicit inputs into the workshops and report. The first tranche of such crowdsourcing has been completed, with further rounds expected. This allows a very inclusive approach to solving some of the most complex challenges of our time.

Our new reality

At KPMG, we look forward to facilitating the World Economic Forum workshops over the coming months, and to contributing to the Annual Meeting.  Together, with Sanofi, the KPMG team feels incredibly inspired in being able to take part in such an impactful campaign.

While there is much discussion about healthcare’s “new reality” in terms of making generational decisions for the future, perhaps this is KPMG firms’ new reality too in bringing our service capabilities to greater heights.  The role and responsibility of such a program does not go unnoticed by us – the Clear Choice in making healthcare an equitable, affordable, innovative sector that can give the pandemic recovery a boost.

Further information about the program and context can be found here.