Countries around the world are facing common challenges and opportunities impacting the health of their citizens and their healthcare systems: aging populations, increase in chronic disease, healthcare cost growth outpacing economic growth, consumer access to health information, and unprecedented technological innovation (e.g., medical and pharmaceutical technology, information technology).
Against this backdrop, each region and country is confronting a unique combination of dynamics that challenge their healthcare systems to deliver better outcomes at a reduced cost burden.
The U.S. spends more than $3 trillion (nearly 18% of GDP) on healthcare — two times or more dollars per capita than other developed nations, for quality and outcomes that lag these global peers.
For such a massive industry, most healthcare spending remains a local game. Constituents throughout the healthcare value chain face highly dynamic environments that are impacted by a number of key trends, including an aging and less healthy population; political and regulatory uncertainty; migration to value-based and accountable care models; integration across the care continuum; payer and provider consolidation; new and increased access to data, innovation and technology; increasing levels of consumer engagement and expectations; and increasing recognition of the role of social determinants of health. To make matters more complex, participants are migrating into each other’s spaces, and nonparticipants are entering the healthcare fray. For example, managed care organizations are buying providers; providers are offering health plans; and Apple, Google and other iconic brands are finding ways into the consumer engagement arena.
These and other challenges offer unprecedented opportunities for innovative and forward-thinking healthcare services companies to develop and deploy business models and solutions that reduce healthcare cost, improve quality and outcomes, and enhance the patient experience, while capturing value for shareholders.
In Europe, aging populations are placing significant burdens on healthcare delivery systems and payers to “do more, better, with less.” Providers are working to drive clinical excellence and consistency across their activities, and to create improved linkages across different care pathway settings. Ancillary service providers, such as diagnostic imaging, dialysis and pathology lab companies, are using operational best practices across their increasingly international networks to improve quality for lower cost. Clinicians are adapting to growing demands on their time by incorporating increasing levels of digitization in their workflows. And patients are looking to technology to inform their healthcare decision-making and, in some markets, paying for accelerated access to healthcare in response to lengthening public sector waiting times.
The Asia-Pacific region has a wide-ranging set of healthcare systems with varied maturity profiles ― most emerging markets in the region have nascent public healthcare reimbursement systems, while established markets have a higher degree of universal coverage.
Healthcare systems across the region are rapidly evolving, with overall healthcare spending projected to surge to US$2.3 trillion by 2026. Aging populations and the rapidly growing burden from noncommunicable diseases — fueled in part by an increasingly urbanized lifestyle — are driving demand. Especially in Southeast Asia, private healthcare providers are capitalizing on this demand by addressing the systemic issues in public health.
The healthcare systems in many developing markets are constrained. For example, public hospitals are often overcrowded and plagued by a shortage of doctors, medical supplies and diagnostic equipment, which affects the quality of care. These strains on APAC’s health infrastructure present significant opportunities to reduce reliance on hospital-centric care. Models such as ambulatory surgery centers, home care and telehealth will therefore flourish.
L.E.K. Consulting works with senior healthcare executives to help solve their most complex challenges during this period of dynamic change. We partner with healthcare systems, payers, providers, technology and solutions organizations, distributors, and healthcare investors to improve business performance by unlocking new market opportunities, improving organizational agility, supporting higher quality outcomes at lower costs and increasing profitability.
Global Health and Healthcare Strategic Outlook: A Shared Vision for 2035
The World Economic Forum (WEF) is the leading international organization for public-private cooperation, engaging leaders from business and all facets of society to help shape agendas and drive positive change globally. L.E.K. is a participating member of the WEF, contributing our expertise and insights to the Forum’s collective thought leadership.
L.E.K. 2022 Annual US Hospital Study: Navigating Out of the Pandemic
The cumulative effect of changes across the US healthcare landscape have forced hospitals and health systems to become more agile, collaborative and resilient. L.E.K.’s 2023 Annual Hospital Study looks at what how hospitals have been able to mitigate these and other challenges, in order to continue to deliver quality care while also investing in a sustainable future.
L.E.K.'s Healthcare Insights Center
Understanding and dissecting the dynamics of the quickly evolving healthcare ecosystem is the central focus of L.E.K.’s HealthCare Insights Center. Our global team of subject matter experts bring novel insights to the most difficult and pressing questions facing healthcare companies today. With access to this information, industry leaders will be well-positioned to not only navigate today’s challenges, but anticipate those on the horizon.
Asia-Pacific Life Sciences Centre of Excellence
The Centre is supported by the Singapore Economic Development Board, and leverages L.E.K.’s deep industry knowledge and proprietary tools, as well as Singapore’s strong research ecosystem, to produce materials on a broad range of life sciences and healthcare topics.
How we help
L.E.K.’s senior executive team delivers the industry insight and strategic perspective required to address critical business issues. Our collaborative, project-based approach is designed to build client capabilities by providing senior executives with the knowledge, tools and support they need to address specific pain points and move forward with confidence. To complement the deep industry experience of our team, we employ seasoned executives from major healthcare enterprises who have “been there and done that” and lend real-world, hands-on perspective to relevant engagements. And our heritage as a strategic advisor supporting mergers and acquisitions (M&A) has been instrumental in honing our process that combines unmatched analytical rigor, detailed analysis and rapid execution.
Some of the ways we help leading healthcare services organizations include:
- Enabling growth and new business development: We work closely with clients to assess new markets, prioritize strategic growth opportunities, develop business plans and commercial models, and codify implementation roadmaps to reduce costs and improve healthcare outcomes and quality, while creating shareholder value.
- Developing strategies in response to changing regulations: We assist clients in developing unique solutions to address an evolving marketplace by leveraging our in-depth understanding of policy, empirical and fact-based insights, and a detailed analysis of a client’s capabilities and assets.
- Driving innovation: We empower clients to transform ideas into new industry models. We demonstrate the ability to “move the needle” on quality and cost trends through thoughtful research, clear articulation and refinement of the value proposition, and a practical approach to integrating new solutions into the healthcare delivery value chain.
- Enhancing social and healthcare delivery models: We collaborate with clients to define models for technologies, products and services to meet increasing demand for preventive healthcare in primary, acute, home and social care settings.
- Capitalizing on the emerging healthcare “retail” market: L.E.K. supports clients along the value chain (including payers, benefit managers and care providers) to create robust strategies to enhance revenues, identify new market opportunities and provide consumers with innovative solutions. We combine consumer research with quantitative analysis of growth and profitability, modeling of adoption rates, and other market dynamics.
- Improving operational effectiveness: Our hands-on expertise with payers, providers and other constituents enables us to work closely with senior executives and line management to diagnose issues and develop and implement performance improvement plans. We have deep experience across the healthcare value chain in functions such as sales and marketing, customer service and retention, revenue cycle, medical management and clinical operations, and finance.
- Evaluating M&A opportunities: We have deep expertise in advising strategic and financial investors to identify high-yield investment opportunities. Our commercial due diligence efforts also feature post-acquisition strategy and integration services to optimize the value of portfolio companies.
- Growth strategy: L.E.K. developed a strategic and investment plan and provided implementation support to a national, multiline managed care organization (MCO) to substantially grow its Medicare Advantage membership over five years via new county expansion; improved member retention; targeted outreach to plan switchers, Medicare fee-for-service beneficiaries and age-ins; and enhanced distribution. The client approved the plan and financial investment that we recommended and pursued implementation with our assistance.
- Product development and strategy: L.E.K. created a comprehensive fact base of the accountable care organization (ACO) market opportunity to inform the go-to-market strategy for the services and technology business unit of a leading payer-provider, including an in-depth evaluation of the ACO services market (including sizing and segmentation), current and future competitors, customer needs, and articulated implications for the client’s go-to-market strategy. The client subsequently green-lighted additional investment, substantially refined the positioning of its service line and modified sales targeting, which led to accelerated growth.
- Operating and financial performance improvement plan: L.E.K. developed an operating and cost performance improvement plan for an operator of dialysis clinics. The client realized clinical operating efficiencies and cost optimization yielding an $80 million EBITDA improvement and G&A optimization yielding an additional $50 million in run-rate cost reductions.
- Commercial due diligence: L.E.K. completed commercial due diligence and an operational assessment of a free-standing emergency department (FSED) operator and developed a post-acquisition value creation strategy on behalf of a private equity investor. The client made a substantial strategic investment in the target organization.
- Growth and pricing strategy: L.E.K. developed a successful consolidation strategy built around organic and inorganic growth for one of Europe’s leading dental service providers. Together we leveraged internal operating metrics to drive best practice benchmarking and identified a clearer pricing strategy for patients paying out of pocket. Our collaboration supported rapid network growth and two successful changes of ownership, during a period when patient numbers and satisfaction also rose.
- Strategic option development: L.E.K. supported a leading European diagnostic and molecular imaging provider in its strategic development over a number of years. We provided management with an in-depth understanding of key market dynamics, challenges and opportunities, and together developed a number of strategic options. This led to the company’s success in three European countries, and the creation of a strong position for further expansion.
- Market and internal performance assessment: L.E.K. supported a leading UK private hospital provider in assessing the UK market, investigating the demand, supply and funding dynamics both overall and at the local hospital level. We also analyzed the performance of each of the company’s 20 largest hospitals, supporting management’s development plan and leading to a successful flotation of the business.