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As the biggest industry sector in most European economies, healthcare is already given a big chunk of the gross domestic product (GDP). This portion is expected to become even bigger and have a huge impact on employment, the opportunities to grow businesses and economies in general.

There are challenges to be addressed, however. Globally, all health economies face similar challenges - shortage of clinicians, quality, costs, easy and uniform access, regulatory compliance and safety. In addition, new consumer technologies have led to fresh challenges, promoting greater patient power.

Action is required at all levels to change the way healthcare is delivered. New healthcare IT systems must offer software that supports the core medical processes, hardware that allows easy access to information at the point of care, and standards that make the integration of different systems easier.

Governments’ financial incentives and regulations will make automation in healthcare practices a must-do. There’s an increasing need for hospitals to attain cost efficiencies and provide evidence of effective use of IT in healthcare practices. These will drive market growth.

Healthcare specific challenges

Healthcare faces many significant challenges in the near future. In the first paper of this series, Healthcare Challenges and Trends, we present these challenges in greater depth.

Cost
When it comes to funding, the number (and size) of buyers of IT varies from country to country. It does not necessarily depend on the size of the country but rather on the structure of the healthcare system.

Demographics
Europe is steadily greying. In the face of unprecedented demographic changes (an ageing population, low birth rates, changing family structures and migration), it is important, both at the European Union (EU) and national level, to review and adapt existing policies, and ensure sustainable public finances to guarantee adequate pensions, healthcare and long-term care.

Quality
Healthcare systems are under close scrutiny by society.
Good quality healthcare is one of the most important factors in how individuals perceive their quality of life. In most countries it is a major political issue and in some cases, the healthcare delivery organisation is a part of the national identity.

Pharma-specific challenges

Pharma 1.0, the traditional business model that relies on high value blockbuster drugs, is coming to an end.

Demonstrating benefits and cost-effectiveness is in demand
The cost of developing new drugs is increasing. From the scientifically intense discovery of new compounds, early stage development, pre-license clinical trials to data capture, submission to regulatory bodies and even late stage development – every related activity is proving more expensive. To add to the pressure, regulatory bodies insist on ‘seeing’ the benefits and cost-effectiveness, more than ever.

Reducing spend at the national level is in focus
Health economies and insurance companies, themselves under financial pressure, are driving cost savings in their drugs bills.
Faced with budget pressures and evidence of cost inefficiency, all OECD countries have introduced healthcare reforms or are planning to do so in the near future.

Why converge?

Traditionally, the healthcare and pharmaceutical industries have followed a conventional supplier-consumer relationship. However, both industries face the same core challenge: how to deliver better health outcomes at lower cost.