2015 global health care sector outlook Deloitte Touche Tohmatsu Limited’s yearly look at the topics, trends, and issues impacting the global health care sector Sector overview Global health care spend to grow at 5.2% annually to 2018 Global health care spend represents 10.6% of GDP Where’s the growth expected? Western Europe North America 4.9% 2.4% 8.1% Asia Middle East and Africa Latin America 4.6% 8.7% Contradictory forces influence health care spending •Aging population •Growth of emerging markets •Advances in treatments Aging population Percentage age 60 and over •Heath care cost reduction pressure 2.4% 7.6% 1980-2010 2010-2040 Global health care drivers — chronic disease 63% of deaths Total deaths from diabetes are project to rise by more than 50% in the next 10 years in 2008 were from non-communicable diseases By 2020, tobacco will kill 7.5 million people per year, accounting for 10% of all deaths worldwide Top issues and trends Regulations and compliance Cost Key issues in 2015 Adapting to market forces Transformation and digital innovation Adapting factors Cost increase Cost to market forces Regulations and compliance Higher premiums, OPP Risk, regulations, and compliance Affordable Care Act Overuse of services Coverage expansion Austerity measures Disruptive technologies Transformation Pressure to contain costs and demonstrate value and digital is coming from all sides innovation Governments Providers Health plans Life sciences companies Political uncertainty, persistent economic stress, and austerity measures in numerous countries are calling into question the sustainability of public health care funding Consumers New value-basedcare models focus on maximizing value (lower cost and higher quality) are being increasingly looked at as a solution Continual cost increases and margin erosion are impacting all stakeholders Adapting to market forces Risk, regulations, Market forces and compliance Disruptive technologies Transformation and digital innovation Increasing role of government Governments introducing broad reforms to cut cost and improve quality Scale to prosper Vertical and horizontal integration, cross-industry M&A Competition for talent Number of doctors to remain flat, uneven distribution of caregivers, opportunities outside of home markets Improving access to care Emerging market expansion, innovative solutions outside of traditional models Consumerism Patients engagement increasing due to rising out-of-pocket costs, more choice, better access to information and shift to patient-driven health care models Globally, the number of doctors per 1,000 population is expected to remain virtually the same between 2012 and 2015 Risk, regulations, and compliance Adapting to market forces Transformation and digital innovation Disruptive Adoption of new digital HIT advances is transforming technologies the way stakeholders interact Cost Technology Risk, Adapting regulations, mHealth, telemedicine, AM, AI, diagnostics, wearables, to market forces are seen as a potential and compliance big data, and analytics way to improve the care process Regulations and compliance Disruptive Environment is complex and evolving Transformation and digital innovation Challenges Challenges exist in widespread adoption due to patient engagement, security, and privacy technologies Much focus on drug and patient safety Protected health information impacted by security breaches and cyber attacks Push for payment transparency continues to take center stage Health care security and privacy challenges Safeguarding security and privacy likely to become more challenging with the evolving health care landscape New technologies EHR/ePHI Increased regulatory scrutiny Population health/ new care models Risk data flow and number of players Health care stakeholders Growing consumerism Escalated risk PHR EHR: Electronic health record; ePHI: Electronic protected health information; PHR: Personal health record To learn more about the global trends and issues impacting the global health care sector as well as outlooks for 13 countries, please visit our 2015 global health care sector outlook at www.deloitte.com/healthcareoutlook. 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