Current healthcare business model causing rise in expenditure

Frost & Sullivan: Current healthcare business model causing rise in expenditure


Written by Melody Song
Thursday, 21 October 2010 13:04


KUALA LUMPUR: The current healthcare business model, which is driven by incentives given by insurance providers based on patient visits are causing the rise in healthcare expenditure, according to a survey from Frost & Sullivan.

The business research and consultancy firm said in a statement Thursday, Oct 21 that the present model results in 90% of a country’s healthcare expenditure being spent on only 30% of its population, thereby causing the rise in healthcare cost.

“The healthcare system needs to embrace a paradigm shift to incentivize the wellness condition of a person rather than merely treating diseases or sick-care” said Frost & Sullivan senior vice president Reenita Das.

Frost & Sullivan also said that under the current healthcare system, physicians' attention is only focused on 20% of a person's life, whilst another 80% goes neglected.

Medical hours are spent on treating symptoms or diseases rather than ensuring the overall wellness of a person, it added.

“There are huge opportunities for healthcare providers, medical devices sector, pharmaceutical sector and other healthcare verticals to tap into this 'lucrative but yet to be explored area’ of a person’s life,” it said.

Frost & Sullivan said it expected the cost of healthcare to continue rising as the global ageing population increases under the current healthcare model, unless there is a paradigm shift in the healthcare system towards a patient-centric model.

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