The pressure of ageing populations, shortages of qualified clinicians and a steady growth in chronic disease are testing state healthcare services to their limit. Following the structural strain that the pandemic placed on already stretched public health systems, it comes as no surprise that private healthcare provision is becoming increasingly important across Europe.
With a combination of private demand, whether funded by individuals or employers via private health insurance, and a growing role in the delivery of publicly funded care, there is potential for private hospitals to deliver excellent levels of patient care. They can also deliver healthy returns for investors, provided they can navigate tariff pressures, the broader out-of-hospital agenda and evolving patient expectations.
So, how can providers make the most of the opportunities presented and address challenges? Recent L.E.K. Consulting research and experience reveals how to create value in this vital sector.
Across markets, there is a clear out-of-hospital care agenda pushed by public and private payors, which is creating the need for hospitals to rethink their participation models. Outpatient delivery is growing rapidly, driven in part by patients demanding more convenience, access and digital connectivity as well as a preference for clinic-based care when possible. This change is facilitated by medical advancements, technology and payors favouring cost-efficient care settings. Numerous providers across Europe have extended into integrated outpatient offerings.
For hospitals, there is a real risk of lagging behind these emerging integrated providers, putting the onus on them to adapt to survive.
Operational efficiency is, of course, under the spotlight, with costs increasing and pressure from payors. In the search for efficiency at both group and individual hospital level, scaled players and platforms look set to win the day. Also, as patient choice increases, so do expectations. This means that providers need to invest in brand building as well as using digital transformation alongside physical touchpoints to deliver better patient pathways.
Understanding the benchmarks in the market today and developing a strategy for long-term value creation for the future have never been more imperative.
The global megatrends driving change in healthcare provision
Below, we highlight the megatrends driving structural change across global healthcare, from evolving funding pressures to advances in treatment and supply chain transformation (see Figure 1). We also explore what this means in context.
