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Diagnostic services are a fundamental part of the healthcare ecosystem. Despite this, the value of diagnostics tends to be underestimated. This has resulted in providers competing on cost and arguably focusing effort and investments into operational efficiency rather than investing in innovation, technology and service quality.
Demand for services has been steadily growing. Ageing populations have meant that healthcare systems are dealing with an increasing prevalence of chronic conditions. Advances in science are providing new solutions in the form of personalised medicine and genomics. At the same time, increasing strains on national healthcare budgets mean that diagnostics are too often viewed as a relatively easy source of savings.
Driving value through diagnostics is a key challenge in the coming years but it should be facilitated by the increasing capacity to leverage data for improving care and clinical outcomes and through evolving business models. We highlight five core value drivers below.
It is important not to overlook the value of diagnostic services, recognising how these services can help healthcare systems drive efficiencies while improving patient outcomes.
Diagnostic services can also facilitate the move of healthcare activity from the hospital to the community. By providing services in local clinics or even in the home, patients can get a faster, more convenient service while saving the health system time and money by avoiding costly hospital visits.
In addition, private diagnostics players can provide valuable solutions in partnerships with the wider care system and public providers. Examples include the increasing role of private radiology providers and teleradiology specialists in UK imaging. These evolving care models provide solutions to problems such as clearing waiting lists, adding capacity or specialist skills and, if used appropriately can help reduce the overall cost of care.
Early diagnosis can catch problems early, improving patient outcomes and saving downstream healthcare costs. Diagnostics can also accelerate the move by health systems away from treatment and focus on volume to prevention and a focus on value.
At the same time, healthcare systems around the world are facing the compounding challenges of an ageing population and squeezed healthcare budgets. To manage these challenges, they must not forget about the benefits a strategic and value-based approach to diagnostic services can bring. Payers and commissioners have an important role to play by shifting the focus away from price and towards value. Regulators can support this move by relaxing sometimes burdensome regulatory requirements.
However, it is also down to diagnostic service providers to practically demonstrate the value they can bring. This can be achieved through making best use of the data already available, working more closely with physicians, being an active party in initiatives to shift care to the community and providing new solutions through ongoing research and development efforts.
Private providers are relied upon in many markets to provide new and innovative solutions, know-how and capacity to national healthcare systems. In KPMG's latest report, “The healthcare diagnostics value game,” we explore the challenges and the solutions of delivering and demonstrating value in under-pressure markets based on research and interviews with leaders in the market.
For further information, download the full report (PDF 593 KB).
1National Pathology Programme (PDF 1.70 MB)
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