Bending the Cost CurveEmerging International Best Practices

“No one is smarterthan everyone.”

February 1–2, 2011

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Dear Colleagues,

As we prepare for the inaugural symposium of Bending the Cost Curve: Emerging International Best Practices in Washington, DC, we know that each of you is looking for answers. You have achieved great success and renown in healthcare. Yet, we all are confronted with the nagging reality that our healthcare systems cost far more than they should.

In the face of aging populations and exploding new technologies, cutting healthcare spending may be impossible. But, bending the cost curve; that—is within our grasp.

Our symposium is designed to examine how this bending takes shape. Can we apply the proper pressure on spending to our own geographies? We’ve selected case studies in five countries: Spain, India, Australia, the Netherlands and the United Kingdom. Each case study was carefully selected to spark vigorous debate on methods, unintended consequences, and the likelihood of transferability. Each addresses key ways to bend costs: innovation, shared risk, patient engagement, standardisation, specialisation, regulatory intervention, collaboration, incentives. These well-worn terms are all-too familiar to us. However, we plan to breathe new life into them by collectively vetting these concepts through leading case studies.

The attached document is intended for you to review prior to arrival so you’ll come armed with knowledge and questions about how these examples can be implemented. Together, we will ask new questions and tease out the best practices from public and private sectors to improve healthcare systems.

Tuesday evening’s dinner on Feb. 1 with U.S. Secretary Kathleen Sebelius and our conversation on Wednesday, Feb. 2, will open new opportunities for you to develop new partnerships and business relationships, while sharing models and experiences from around the world. As we have stressed, this is meant to be a highly interactive discussion, drawing on all of your remarkable expertise.

Dr. David LevyGlobal Leader, HealthcarePwC

Dr. Richard I LevinDean, Faculty of MedicineMcGill University

Frederick KempePresident and CEOAtlantic Council

Karen DavisPresidentThe Commonwealth Fund

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Atlantic CouncilThe Atlantic Council promotes constructive U.S. leadership and engagement in international affairs based on the central role of the Atlantic community in meeting the international challenges of the 21st century. The Council embodies a non-partisan network of leaders who aim to bring ideas to power and to give power to ideas by:

• stimulating dialogue and discussion about critical international issues with a view to enriching public debate and promoting consensus on appropriate responses in the Administration, the Congress, the corporate and nonprofit sectors, and the media in the United States and among leaders in Europe, Asia, Africa and the Americas;

• conducting educational and exchange programs for successor generations of U.S. leaders so that they will come to value U.S. international engagement and have the knowledge and understanding necessary to develop effective policies.

McGill UniversityMcGill University is one of Canada’s best-known institutions of higher learning and one of the country’s leading research-intensive universities. With students coming to McGill from about 150 countries, our student body is the most internationally diverse of any medical-doctoral university in Canada.

The oldest university in Montreal, McGill was founded in 1821 from a generous bequest by James McGill, a prominent Scottish merchant. Since that time, McGill has grown from a small college to a bustling university with two campuses, 11 faculties, some 300 programs of study, and more than 36,000 students. The University partners with four affiliated teaching hospitals to graduate over 1,000 health care professionals each year.

The Commonwealth FundThe Commonwealth Fund, among the first private foundations started by a woman philanthropist—Anna M. Harkness—was established in 1918 with the broad charge to enhance the common good. The mission of The Commonwealth Fund is to promote a high performing health care system that achieves better access, improved quality, and greater efficiency, particularly for society’s most vulnerable, including low-income people, the uninsured, minority Americans, young children, and elderly adults.

The Fund carries out this mandate by supporting independent research on health care issues and making grants to improve health care practice and policy. An international program in health policy is designed to stimulate innovative policies and practices in the United States and other industrialized countries.

Co-sponsors

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Bending the Cost CurveEmerging International Best Practices

A Global Symposium SeriesAs developed and emerging economies contend with increasing demand for healthcare services, they face a common challenge: how to manage the escalating costs while increasing access and quality. We believe that it will take the collaborative effort of the best minds from industry, academia and government worldwide to tackle this challenge.

Bending the Cost Curve is a four-part, two-year global symposium series designed to create a network for sharing emerging best practices that can “bend the cost curve.” The requirement for change is urgent, and there is no sense in re-inventing the wheel where practical and adaptable solutions have already proven successful.

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Over the next two years, the symposium series will bring together healthcare leaders from around the world who have hands-on experience in creating new solutions and managing change for the benefit of communities, patients, families providers, government, insurers and suppliers. Using a case study approach, we will introduce and explore several topics that are relevant for participants. The group is intentionally small, in order to provide the maximum opportunity for substantive discussion and networking.

The inaugural symposium will be held on Feb. 2, 2011 in Washington, DC, with an introductory dinner the prior evening, to be keynoted by Kathleen Sebelius, Secretary of the U.S. Department of Health and Human Services. Subsequent symposia will be held in Europe and Asia. The series will culminate in a white paper review of significant business stature.

In this packet, you will find an overview of the agenda topics, case studies, related articles as well as lists of confirmed attendees and speakers for the Washington, DC, event. While we understand the demands on your time, a review of the case studies and related articles will add immeasurably to our roundtable discussions.

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The growth in healthcare spending is unsustainable. In both developed and emerging nations, healthcare is growing faster than the overall economy. Since so much of healthcare is financed through governments, elected officials are forced to address hundreds of cost drivers that affect spending. They want to restrain spending growth, but don’t want to eviscerate care that is vital to their population’s health. Calculating health spending growth is a straight-forward exercise; the solutions to control it are complex and evolving.

Even so, the numbers are astonishing. Spending on healthcare among the OECD (Organisation for Economic Cooperation and Development ) and BRIC (Brazil, Russia, India and China) nations will grow by 51% between 2010 and 2020, according to estimates from PwC’s Health Research Institute. According to PwC projections, the countries that are expected to have the highest health spending growth between 2010 and 2020 are China (166%) and India (140%). For OECD countries, health spending as a percent of GDP will increase to 14.4% in 2020, up from 9.9% in 2010, according to PwC estimates. The BRIC nations are expected to experience even stronger growth in health spending, as their economies grow, and they build out their health systems. Health spending as a percent of GDP is expected to grow from 5.4% in 2010 to 6.2% in 2020 in those nations. In actual spending, this amounts to a 117% increase in spending over the decade, with China leading the way.

Why are costs so high and rising so fast? We could point to many culprits, from income growth to perverse financial incentives. However, two overarching factors explain much of the cost acceleration: aging populations and a surge in chronic illness.

Background

By 2050, 22% of the world’s population will be at least 60 years old—double the percentage in 2009.i As populations age, medical costs increase. In the U.S., medical care for a person over age 65 costs five times more than for someone younger.ii That’s partly because about 80% of older adults suffer from at least one chronic condition (e.g., arthritis, osteoporosis) that requires ongoing treatment.iii This helps to explain why chronic disease accounts for more than 75% of healthcare costs in the U.S..iv

Both young and old are developing chronic diseases in record numbers, leading to an explosive consumption of resources that is driving up spending and creating liabilities for future generations. Unfortunately, many chronic diseases are fueled by unhealthy lifestyle choices—mainly smoking, poor diets, and lack of exercise. Today, half the population of OECD countries is obese or overweight (versus 10% in 1980). That’s led to a rise in chronic conditions like diabetes.v Over the next two decades, such “lifestyle diseases” are projected to kill more individuals worldwide than traditional killers such as tuberculosis, diarrhea, and infections.vi India is now the diabetes capital of the world, home to more diabetics—an estimated 50 million—than any other country, according to the International Diabetes Federation.vii

Against this backdrop, participants in the inaugural Bending the Cost Curve symposium will explore five case studies that illustrate how various countries are solving these pressing issues.

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Partnerships between government and private organisations are not new in healthcare. For example, the National Health Service in England built about 100 new hospitals during the 1990s through financing vehicles broadly described as public-private partnerships (PPPs). However, this model is evolving to introduce efficiency and innovation more broadly into the delivery of health.

As the scope of partnership projects in healthcare grows, so, too, does the size of the potential market for private organisations. Between 2010 and 2020, the cumulative amount spent on healthcare infrastructure is estimated to be $3.6 trillion, according to PwC projections. However, cumulative health spending beyond infrastructure is estimated to total $68.1 trillion during that period, indicating an enormous and largely untapped market for private organisations to assist governments to improve both the efficiency and quality of their healthcare systems. Competition for private capital has prompted governments in Europe, Asia, Africa and southeast Asia to establish PPP agencies, charged with developing PPP policy recommendations, streamlining procurement and contracting for services.

Case Study 1The Valencia Concessional Model: A PPP Example in Spain

Case IntroductionSir Richard Feachem, Executive Director, UCSF Global Health Sciences and Professor of Global Health, University of California San Francisco and University of California Berkeley

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A second Alzira model was created in 2003 for integrating primary care and hospital care.viii In addition, the government initially agreed to pay the hospital a capitated rate that increased annually with general inflation. However, medical costs were increasing at two to three percentage points above the inflation rate. Consequently, the contract was renegotiated so that payment increased in line with the rate of medical inflation.

Enclosed readingBuild and Beyond: the (R)evolution of healthcare PPPs, PwC Health Research Institute, December 2010

“SPAIN—Hospital de La Ribera,” Public-Private Investment Partnerships for Health: An Atlas of Innovation. San Francisco: The Global Health Group, Global Health Sciences, University of California, San Francisco, August 2010 (pp 41-45)

Partnerships like Spain’s Alzira project, which includes hospital and primary care services, have saved government 25% of the cost of providing care. This project is based on a strategic partnership between the government of Valencia and a private company, Ribera Salud Temporary Union of Businesses. It carries the advantages of a decade-long track record that illustrates the need for flexibility and ongoing review. Since the €75 million Alzira hospital opened, at least 20 other PPPs have been completed in Spain. Central to the Alzira model is the notion that “money follows the patient.” Citizens of the region have the choice to visit any hospital within the region, with their catchment hospital being responsible for 100% of the cost when that happens. Conversely, when outside patients attend the Alzira hospital, the operator only recovers 85% of that cost. This is a strong incentive to provide high quality services to maintain patient confidence. After the hospital opened in 1999, officials soon realized the need to collaborate with the primary care sector to better coordinate and integrate medical care throughout the district.

Questions

Are there segments of healthcare in which partnerships with private organisations should not be considered? Why?

To what degree can PPPs influence a major cost driver: the salaries of clinicians and other healthcare workers?

What types of private companies and/or investors should governments seek as their partners in PPPs?

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what is referred to as reverse or “downward” innovation. This term has been used by technology manufacturers to describe how they redesign expensive machines into simple ones that cost a fraction of the price and can be sold in mass quantities. It’s doing more for less, using economies of scale to drastically reduce the cost of production. This is also the philosophy espoused in C.K. Prahalad’s book, “The Fortune at the Bottom of the Pyramid,” a book that has changed the way many businesses think about marketing in emerging nations.

Through relentless process innovation, NH conducts more than 10% of all cardiac surgery (adult and pediatric) in India at higher quality than virtually all U.S. hospital centers. See Figure 1.ix

Yet, the costs of these surgeries makes jaws drop in the United States: USD$2,000 for an open heart surgery. The 1,000-bed hospital does this through economies of scale, and that scale continues to expand. Dr. Shetty is planning to expand the NH network into a 30,000-bed enterprise by FY2017, including opening a

Case Study 2The Power of Process and “Reverse” Innovation: India’s Narayana Hrudayalaya

By Western standards, Narayana Hrudayalaya (NH) has done so much with so little. Pricing cardiac surgery at a fraction of what it costs in other countries, the health system has brought treatment to the masses in India. In addition, the system has gone way beyond this niche, financing telemedicine, prevention, medical and nursing education, and an insurance scheme. Amid this array of accomplishments, this case study will focus on how NH founder Dr. Devi Shetty re-engineered heart surgery. Dr. Shetty, who was also the personal physician of the late Mother Teresa, founded the Bangalore-based health system in 2001 through

Case IntroductionDr. David Levy, Global Leader,Healthcare, PwC

Case PresentationDr. Julius Punnen, Vice President and Chief Cardiac Surgeon, Narayana Hrudayalaya Hospital

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network of 55 low-cost, 300-bed heart hospitals. NH also plans to accelerate the creation of a major biocluster for innovation, research and treatment in the Bangalore area. The case of NH illustrates how healthcare can join other sectors of the economy in constantly innovating for cost reduction and quality improvement simultaneously. With increasing cost pressures felt in all developed economies, and expensive hospital care as a focal point of cost reduction, reverse innovation is a path worth considering.

Enclosed readingNarayana Hryudayalaya Heart Hospital: Cardiac Care for the Poor, Harvard Business School, April 25, 2006

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2

1

0

CABG observed mortality rates, Narayana Hrudayalaya and top U.S. cardiac hospitals

NH (2008) Texas Heart Johns Hopkins Cleveland Clinic Institute (2009) (2008) (2009)

1.4

2.92

1.671.2

Figure 1

Volume of CABG surgeries, Narayana Hrudayalaya and top U.S. cardiac hospitals

NH Bangalore NH Kolkata Mass General Cleveland NYP Texas Heart(2008) (2008) Hospital (2009) Clinic (2009) (2007) Institute (2009)

2,500

2,000

1,500

1,000

500

0

2,380

1,235

1,8861,577

1,146811

Questions

If NH expanded into your market, what are the first steps you would take to compete?

Economies of scale at NH have spawned super-specialisation of NH’s surgeons. Can this be applied elsewhere?

NH is adept at cost-shifting by making sure that revenue from paying patients covers the costs of those who cannot pay. Is this sustainable?

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Patient engagement is vital to bending the cost curve, yet it remains elusive regardless of geography. A healthy system that revolves around the needs of clinicians can bypass the needs of patients, and put them on the outside looking in. Patients are often unwilling to ask for help, or wait until their condition becomes critical and even more costly.

Perhaps the best example of this is young people in need of mental health. While this case study focuses on this particular population’s reluctance to seek medical treatment, the lessons it provides in multidisciplinary design of care are applicable to all segments of prevention and primary care. This example also points to the need to customise services to populations. For example, the experience of elderly patients in Australia seeking mental health was far different than young people.

Case Study 3Redefining Primary Care: headspace, Australia’s National Youth Mental Health Foundation

Case IntroductionDr. Christine Bennett, Past Chair of the National Health and Hospitals Reform Commission of Australia, Chief Medical Officer, Bupa Asia Pacific

Case PresentationProfessor Ian Hickie, Professor of Psychiatry, University of Sydney; Executive Director, Brain and Mind Research Institute

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While the main focus of the foundation is on mental health, headspace offers a range of other services to promote the general wellbeing of Australia’s youth, from educational offerings and employment to services designed to combat alcohol and drug dependency. To ensure that headspace programs are based on knowledge of what treatments succeed, the foundation’s Centre of Excellence is conducting a systematic review of the evidence related to interventions for mental health and substance abuse in youth, both in Australia and internationally.

Enclosed reading“Delivering youth-specific mental health services: the advantages of a collaborative, multi-disciplinary system,” Australasian Psychiatry, March 18, 2009

Research in Australia found deficiencies in the traditional care model in which patients seek mental health treatment initially through their general practitioner (GPs). What the government determined was that the existing healthcare infrastructure did not provide easy access to timely treatment. Patients were reluctant to go, and GPs were reluctant to refer patients to the broad range of mental health experts and resources. So, in 2006, the Australian government launched headspace, a program that provides collaborative support for mental health to Australia’s youth (ages 12 to 25) and their families through 30 centers.x The goal was to reach young people early—the key to resolving mental health problems quickly, before they lead to problems such as substance abuse and even suicide.

Questions

When patients are reluctant to seek help, how much responsibility does the health system have to seek them out?

How can medicine move away from the traditional referral processes?

Could this model result in overutilisation, and how could that be avoided?

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Health reform needs constant care. While politicians may grow weary of health reform discussions, the industry and patients benefit when health reform is an iterative process. Regulating and legislating the provision of care and cure must accommodate changes in the economy, technology, patient behaviours, and demographics. Handling this change is difficult, but not impossible. A prime example of this evolution in healthcare regulation is in the Netherlands. A major health reform law was passed in 2004, and its implementation continues to evolve.

Implementation of the law began in 2006 with an emphasis on injecting competition in the market in the following ways:

• Citizens must purchase health insurance from the private insurers. In addition, they can change insurers every year if they wanted.

• Health insurance companies will compete for members.

• Health insurance companies can negotiate rates from public and private providers, prompting them to be more effective and efficient.

Case Study 4Adapting to an Evolving Regulatory Environment: The Dutch Healthcare Authority

Case IntroductionProfessor Jan Willem Velthuijsen, Healthcare Leader, PwC Netherlands

Case PresentationMr. Theo Langejan, Chairman, NZa, (Dutch Healthcare Authority)

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The model continues to evolve as government and the industry assess whether it is lowering costs, increase quality and gaining the trust of its citizens. The prior system was characterized by long waiting lists for procedures and diminishing quality of services.

As the new model evolves, the market has reacted in innovative ways. For example, dermatology practices have opened ambulatory clinics, thus reducing the number of patients admitted for skin conditions.

Enclosed reading“A Living Model of Managed Competition: A Conversation with Dutch Health Minister Ab Klink,” Health Affairs, April 8, 2008

The law is viewed as a liberalisation effort in that it forced insurance companies and providers into a market economy. The premise was that competition would drive up quality and efficiency and drive down prices. Previously, the Dutch health system had been centrally regulated in which the government set all prices paid to providers.

Currently, about one-third of prices to providers have been deregulated, and eventually, as much as 70% of prices will be deregulated. This means that insurers no longer have to pay a government-regulated rate for a service; they can decide what they want to pay, depending on a provider’s quality and cost efficiency.

Questions

How do you measure success—cost reduction and/or quality improvement mix?

Under what conditions is competition a good way to impose cost reduction incentives?

How can a regulator balance the need for flexibility to intervene and correct versus the steadiness needed to encourage entrepreneurship?

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Healthcare is not synonymous with cost-effectiveness. Yet, any discussion of bending the cost curve must attempt to address the cost-benefit ratio. Since 1999, Britain has used NICE for economic modeling of the cost effectiveness of new treatments. Critics of NICE have been vocal, contending the agency inhibits innovation and access by British citizens to new expensive, but valuable drugs. Indeed, the country’s new coalition government recently floated a proposal to curtail NICE’s power, saying that it could advise doctors on the best approaches, but not hinder them from prescribing certain drugs.xi

Case Study 5Cost Effectiveness: Britain’s National Institute for Health and Clinical Excellence (NICE)

Case IntroductionRt. Hon. Alan Milburn, Former Secretary of State for Health with the British Labour Party

Case PresentationSir Michael Rawlins, Chairman of the National Institute for Health and Clinical Excellence

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In the U.S., NICE has been a flashpoint in a dialogue about controlling costs. Critics contend that exporting NICE’s brand of cost control will result in rationing. While everyone agrees with the need to control costs, NICE’s explicit mission to weigh cost against benefit engenders debate. For example, NICE decisions are based in part on quality-adjusted life year (QALY) gained by a specific technology or device. While there is not a specific threshold, NICE uses a range that puts a price point on what breakthroughs doctors can prescribe.

However, because NICE doesn’t take into consideration the impact of its decisions on the NHS’ budget, it has also been accused of contributing to cost growth. This case study represents the best example to explore NICE’s track record and how it fits in today’s environment, in which drug spending growth has slowed considerably from when the agency was founded.

Enclosed reading“Quality, Innovation, and Value for Money: NICE and the British National Health Service,” Journal of the American Medical Association, November 23-30, 2005

Questions

Are governments better at controlling costs than markets?

Can the NICE model be applied to clinical processes?

With the drop in drug spending growth, should the resources spent on reviewing new drugs be shifted to other cost drivers?

i United Nations, “Population Ageing and Development 2009.”

ii Centers for Disease Control and Prevention and The Merck Company Foundation, “The State of Aging and Health in America 2007.” Whitehouse Station, NJ: The Merck Company Foundation; 2007. Available at www.cdc.gov/aging and www.merck.com/cr. An interactive version of The State of Aging and Health in America 2007 report is available online at www.cdc.gov/aging

iii Ibid.

iv Centers for Disease Control and Prevention, “Chronic Diseases: The Power to Prevent, The Call to Control: At A Glance 2009” Available at www.cdc.gov/chronicdisease/resources/publications/AAG/chronic.htm

v “Health: Improving healthcare is vital for long-term growth,” OECD Observer No. 281, October 2010. Available at www.oecd.org/document/54/0,3343,en_21571361_44315115_46155446_1_1_1_1,00.html

vi World Health Organization, “World Health Statistics 2008”

vii By 2010, India will have maximum number of diabetics, Times of India, Oct. 21, 2009

viii Build and Beyond: the (R)evolution of healthcare PPPs, PwC Health Research Institute, December 2010

ix Massachusetts General: Massachusetts Office of Health and Human Services: www.mass.gov/?pageID=eohhs2terminal&L=4&L0=Home&L1=Government&L2=Special+Commissions+and+Initiatives&L3=Health+Care+Quality+and+Cost+Information&sid=Eeohhs2&b=terminalcontent&f=dhcfp_quality_cost_archives_qc3_reports&csid=Eeohhs2#heart_surg

Cleveland Clinic: Heart and Vascular Institute “Outcomes 2009.” http://my.clevelandclinic.org/Documents/outcomes/2009/hvi-2009-outcomes.pdf

NYP: New York State Department of Health. “Adult Cardiac Surgery in New York State.” Revised 2010. www.health.state.ny.us/statistics/diseases/cardiovascular/heart_disease/docs/2006-2008_adult_cardiac_surgery.pdf

Texas Heart Institute: Texas Department of State Health Services: www.dshs.state.tx.us/thcic/DataAndReports.shtm

Johns Hopkins: Johns Hopkins University HealthSystem* Consortium Mortality Statistics: www.hopkinsmedicine.org/quality/performance/mortality/uhc.html#cardiology

x This overview is adapted from information found on the headspace website, www.headspace.org.au

xi U.K. Drug Watchdog to Lose Industry Power, Wall Street Journal, Nov. 2, 2010

February 1, 2011

Daughters of the American Revolution Hall (DAR) 17th & C Street, NW, Washington, DC

6:00pm Shuttle service begins Shuttles depart from Ritz-Carlton Hotel for DAR as needed until 7:00pm

6:30-7:30pm Cocktail reception

7:30-9:30pm Dinner Keynote address by Kathleen Sebelius, Secretary of Health and Human Services

February 2, 2011

The Ritz Carlton Hotel, Plaza Ballroom 1150 22nd Street, Washington, DC

7:30-8:00am Registration and Continental Breakfast The Roosevelt Room

8:00-8:15am Opening remarks

8:15-9:45am Session 1 Managing Rising Costs in a Fiscally Constrained World: The Role of Public-Private Collaboration

Introduction by Sir Richard Feachem, Executive Director, UCSF Global Health Sciences and Professor of Global Health, University of California San Francisco and University of California Berkeley

Case Study: The Valencia Concessional Model: A PPP Example in Spain

Bending the Cost CurveFebruary 1–2, 2011Agenda

9:45-11:15am Session 2 The Power of Process and “Reverse” Innovation

Introduction by Dr. David Levy, Global Leader, Healthcare, PwC

Case Study: Narayana Hrudayalaya, Bangalore, India

Comments by Dr. Julius Punnen, Vice President and Chief Cardiac Surgeon, Narayana Hrudayalaya Hospital

11:15-12:45pm Session 3 Redefining Primary Care and Wellness

Introduction by Dr. Christine Bennett, Past Chair of the National Health and Hospitals Reform Commission of Australia; Chief Medical Officer, Bupa Asia Pacific

Case Study: headspace: Australia’s Youth Mental Health Foundation

Comments by Professor Ian Hickie, Professor of Psychiatry, University of Sydney; Executive Director, Brian and Mind Research Institute

12:45-1:30pm Networking lunch The Roosevelt Room

1:30-3:00pm Session 4 Healthcare Costs and Privatisation

Introduction by Prof. Jan Willem Velthuijsen, Healthcare Leader, PwC Netherlands

Case Study: Dutch Healthcare Authority

Comments by Mr. Theo Langejan, Chairman, NZa (Dutch Healthcare Authority)

3:00-4:30pm Session 5 Comparative Effectiveness: Change Accelerator or Barrier?

Introduction by Rt. Hon. Alan Milburn, Former Secretary of State for Health with the British Labour Party

Case Study: Cost Effectiveness: Britain’s National Institute for Health and Clinical Excellence (NICE)

Comments by Sir Michael Rawlins, Chairman of the National Institute for Health and Clinical Excellence

4:30-5:00pm Closing

Dr. Christine BennettPast Chair of the National Health and Hospitals Reform Commission of Australia; Chief Medical Officer, Bupa Asia Pacific

Mr. Stephen BergerChairman of the New York State Commission on Health Care Facilities in the 21st Century; Chairman, Odyssey Investment Partners, LLC

Ms. Muna Bhanji Senior Vice President, Global Market Access, Merck

Dr. Yves Bolduc Minister of Health and Social Services of Quebec, Canada

Mr. Mike BoswoodPresident and CEO, Healthcare and Science, Thomson Reuters

Dr. Fred CeriseFormer Secretary of Health, Louisiana;Vice President for Health Affairs and Medical Education, Louisiana State University

Dr. Jon CohenChief Medical Officer and Senior Vice President, Quest Diagnostics

Dr. Philippe CouillardFormer Minister for Health and Social Services of Quebec, Canada; Consultant, SECOR; Partner, Persistence Capital Partners; and Senior Fellow in Health Law, McGill University, Montreal, Canada

Roster ofParticipantsas of January 21, 2011

Ms. Janet DavidsonPresident and CEO, Trillium Health Centre, Ontario, Canada

Mr. Michael DowlingPresident and CEO, North Shore Long Island Jewish Health System

Lady Neelam Sekhri FeachemCEO, Healthcare Redesign Group

Sir Richard FeachemExecutive Director, UCSF Global Health Sciences and Professor of Global Health, University of California San Francisco and University of California Berkeley

Magdalena Sofía Frech LópezCoordinator of Special Projects, Office of the President of Mexico

Professor Ian HickieProfessor of Psychiatry, University of Sydney; Executive Director, Brain and Mind Research Institute

Mr. Theo LangejanChairman, NZa (Dutch Healthcare Authority), Netherlands

Dr. Richard Levin Dean of the Faculty of Medicine, McGill University, Montreal, Canada

Dr. David L. LevyGlobal Leader, Healthcare, PwC

The Right Honourable Alan MilburnFormer Secretary of State for Health, British Labour Party

Dr. Surya N. MohapatraChairman and CEO, Quest Diagnostics

Ms. Peggy O’KanePresident, National Committee for Quality Assurance

Ms. Robin OsbornVice President and Director, International Program in Health Policy and Innovation, The Commonwealth Fund

Dr. Julius PunnenVice President and Chief Cardiac Surgeon, Narayana Hrudayalaya Hospital, Bangalore, India

Mr. Saäd RafiDeputy Minister of Health and Long-Term Care, Ontario Government, Canada

Ms. Carol RaphaelPresident and CEO, Visiting Nurse Service of New York

Sir Michael RawlinsChairman of the National Institute for Health and Clinical Excellence, United Kingdom

Mr. John RotherExecutive Vice President of Policy, Strategy and International Affairs, AARP

Dr. Steven ShapiroChief Medical and Scientific Officer, UPMC

Dr. Michael StockerChairman, New York City Health and Hospitals Corporation, New York

Mr. Robert VallettaU.S. Healthcare Providers Leader, PwC

Professor Jan Willem VelthuijsenHealthcare Leader, PwC Netherlands

Dr. Gabriela Villarreal LevyGeneral Director of National Healthcare Information, Federal Healthcare Ministry, Mexico

Mr. Gregory WassonPresident and CEO, Walgreen Co.

Ms. Paula WilsonPresident and CEO, Joint Commission Resources (JCR)

Mr. Ronald ZwanzigerChairman, CEO and President, Alere Inc.

Enclosed readingSynopses

Build and Beyond: the (R)evolution of healthcare PPPsPwC Health Research Institute, December 2010This report, published in December 2010 by PwC’s Health Research Institute, is a comprehensive look at how health PPPs are evolving from infrastructure to clinical services. The report includes the Alzira case study as well as examples in Switzerland, South Africa, Japan, China, the Middle East, Latin America and the U.S..

Key finidings in the study• Public and private sector partnerships are emerging as a new and compelling model for

financing and managing healthcare delivery. • Public-private partnership can relieve the burden on taxpayers by ultimately making the health

system more efficient and accountable for improved health outcomes and wellness.• Health PPPs have the potential to create a multi-trillion global market for private companies

across multiples industries inside and outside of healthcare.

Narayana Hryudayalaya Heart Hospital: Cardiac Care for the PoorHarvard Business School, April 25, 2006This article provides an in-depth look at why and how Dr. Shetty provides affordable cardiac care in the world’s second most populous country. On one of the walls of his office is this quote: “Most of the things worth doing in the world had been declared impossible before they were done.”

Key findings in this article• The system’s goal is the highest quality at the lowest price.• Costs are driven lower through high capacity utilisation, high productivity goals, negotiating

price discounts from vendors, and using information technology to drive efficiencies.• The hospital offered an insurance scheme, called Karuna Hrudaya, that allows poor patients to

pay less. Or, there is a charitable organisation that arrange funds for patients as well.

“Delivering youth-specific mental health services: the advantages of a collaborative, multi-disciplinary system,” Australasian Psychiatry, March 18, 2009This article describes the research that provided the foundation for developing more effective mental health services for Australia’s youth.

Key findings in this article• Traditional mental health services have responded poorly to the needs of young people.• 75% of major mental disorders develop before the age of 25.• In the headspace clinics, young people had access to a much more diverse range of professionals.

“A Living Model of Managed Competition: A Conversation with Dutch Health Minister Ab Klink,” Health Affairs, April 8, 2008The interviewer for this article is Alain Enthoven, a professor emeritus at the Stanford University Graduate School of Business. Enthoven has been regarded as the father of “managed competition,” a concept of that was the basis of health reform proposed during the Clinton administration.

Key findings in this article• During the late 1990s, the Dutch economy was soaring, and a shortage of clinical workers was

threatening to push costs higher and higher. The government was worried about being able to control costs.

• The political climate benefitted from two big parties that were willing to move to the centre on health policy issues: “It’s important to have centrist parties that are aware that they didn’t exist just to win elections, but also have to solve problems in society.”

• Efficiencies are driven by increased collaboration among hospitals and physicians because they are paid a global payment, called a diagnosis treatment combination (DTC) Health IT also enhances this collaboration as physicians are required to use electronic health records and that information is shared among clinicians.

“Quality, Innovation, and Value for Money: NICE and the British National Health Service,” Journal of the American Medical Association, November 23-30, 2005This article explores the pros and cons of NICE, both in the context of the British NHS as well as how it could be adapted to the United States. While NICE is best known for ruling the cost effectiveness of new drugs, its mission is much broader: The institute has 4 distinct programs: (1) appraisals of individual or classes of health technologies (eg, pharmaceuticals, devices, procedures, diagnostic methods), taking account of both their clinical effectiveness and cost-effectiveness; (2) development of clinical guidelines, involving considerations of both clinical effectiveness and cost-effectiveness, for management of individual conditions or symptoms; (3) guidance on the safety and efficacy of interventional procedures (both diagnostic and therapeutic), and (4) public health guidance including advice on the clinical effectiveness and cost-effectiveness of single interventions.

Key findings in this article• Mandatory funding of NICE technology appraisals helps to foster innovation.• NICE is viewed as independent in that its governing board is appointed by an independent

appointments commission.• NICE is one of several NHS initiatives to set national standards.

If you have any questions or additional considerations for our discussion in Washington, DC, please do not hesitate to contact us

David L. Levy, MD Global Leader, Healthcare, PwC+1 201 646 471 1070david.l.levy@us.pwc.com

Christine WaltersGlobal Marketing Director, Healthcare, PwC+1 416 941 8262christine.walters@ca.pwc.com

Silvia FracchiaGlobal Marketing Manager, Healthcare, PwC+1 917 912 0101silvia.fracchia@us.pwc.com

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