A Framework of Holistic Care

07-31-2010
rchang@ntu.edu.tw 3366-8069

Health
Negative View (more medical care)
Minimization/Absence of some variables Societies take this view might only intervene life-threatening traumas and illness

Positive View (more holistic)

A state/condition of complete physical, mental, and social well-being (not merely the absence of
disease or infirmity, WHO)

Pursue a variety of significant interventions to enhance the health of its member

Right to Health
The enjoyment of the highest attainable standard of health is one of the fundamental rights of every human being without distinction of race, religion, political belief, economic or social condition. (2nd preamble of WHOs constitution) The objective of the World Health Organization (hereinafter called the Organization) shall be the attainment by all peoples of the highest possible level of health. (Article 1 of WHOs constitution)

ICESCR (International Covenant on Economic, Social and Cultural Rights)

National health system: components, function & interdependence

Health care: the total societal Planning effort, undertaken in the Planning Administration private and public sectors, focused on pursuing health Administration
Regulation Regulation Legislation Legislation MANAGEMENT

Health outcome

RESOURCE PRODUCTION
Manpower Facilities Commodities (drugs, etc) Knowledge

ORGANIZATION OF PROGRAMS
Public Agencies: Ministry of Health Private Market Voluntary Agencies Enterprises

Health need

DELIVERY OF SERVICES
Preventive Care Primary Care Secondary Medical Care Tertiary Medical Care Care of Special Disorders

ECONOMIC SUPPORT

Health services: specific activities undertaken to maintain or improve health or to prevent decrements of health
Source: M. Roemer: Types of Health System and Determinants, National Health System of the world

General Tax Social Security Voluntary Insurance Charitable Donation Individual & Family

Carry out the Right to Health

Policies

Systems

Emergency, Inpatient, Ambulatory, Long-term

Transformation/ Production

Public/Private (FP/ NP) Organizations

Health/Illness Preventing Early detecting/early treating Curing & Rehabilitating

Disability requiring medical care Inherent Resulted from disease Functionally decayed

Value Chain
Entire production chain from the input of raw materials to the output of final product consumed by the end user.(Porter,1980)
Each link in the chain adds some value to original input.
Value Adds Value Adds Value Adds

Supplier Value Chain

The firms Value Chain

Channel Value Chain

End-user Value Chain

Firm infrastructure (e.g.. finance, accounting, legal) Health resource management Technology development Procurement Inbound Production Outbound Marketing service logistics operation logistics and sales

Health care Services value chain

Fiscal intermediaries Third party

Payer Contributors

Providers

Purchasers

Producers

Government Employers Individuals Employer Coalitions

Insurers HMOs Pharmacy Benefit Managers

Hospitals Physicians IDNs Pharmacies

Wholesalers Mail-Order Distributor Group Purchasing Organizations

Drug Mfgrs Device Mfgrs MedicalSurgical Mfgrs

-Burns et al., 2002

Characteristics of Health Care Services

Uncertainty
Incidence Curing

Third party payer Information Asymmetry Externality Government Intervention

Health Care Services Market

Pure free market
Users: able to pay
Users Users Patients Patients $ Providers Providers
services Resources manpower

Capitalism

$ Equity? Solidarity?

facilities commodities knowledge

Suppliers Suppliers

Government Intervention
Equal access for equal need (financial barrier)
Service

Users Users
Management Equity

Providers Providers

Resources

Suppliers Suppliers

$
Who are paying?

Government Government

Health care financing

Fiscal Intermediaries
Over-used Over-supplied $
Service

Users Users Government Government

Management

Providers Providers

Resources

Suppliers Suppliers

Employers Employers

$
Social Welfare General Tax public provider, regional purchasing fund Social Security Payroll tax social insurance

$ Third party payer

Private Support Individual/Employer Endowment private insurance, out of pocket

Moral hazard

More Problems
Service

Users Users
Responsiveness Financial barrier

Providers Providers
Stinting Quality Efficiency

Resources

Suppliers Suppliers

Government Government
Management

Third party Cream payer

skimming

Utilization control, managed care Supply -utilization review - Reasonable volume - Payment schemes (DRGs, capitation) - Practicing patterns (CBA,CEA) Demand - copayment - deductible - availability of providers & care provision

Escalation of health care expenditure

A regulated, agent-principal, inefficient market Problems Everywhere!

Information asymmetry
(deficient supervision & knowledge of Users Users choice)

Agent-principal (provider, agent)

Service

Balance of provision, Efficiency

Technological introduction $
Resources

Providers Providers
Incentives
Management

Suppliers Suppliers

Government Government
Expenditure, quality, access

Third party payer

Competition Equity

Resource production & allocation Manpower production (Edu.) Technology dissemination (CEA) Plans & providers productive efficiency Budget cap Care rationing Quality/Safety Manpower qualification Drugs, devices permission Organization accreditation Adequate, appropriate care

$
Equity Financial contribution Financial barrier Selection incentive

Consumption Decision
Government Regulations Health Plan Management Agent (provider) Principal (patient)

Who can decide what, which, and when services/commodities/facilities to be used?

Market and Players

Management Regulation

Policies

Management Regulation

Systems

Payer Contributors

Fiscal intermediaries Third party

Transformation/ Production

Distributors

Producers

Provision of Medical Care

Illness
Acute Primary Secondar Tertiary Setting Home Community Institution Sub-acute Chronic

Disability
Disable Mental Function lost

The force-field and well-being paradigms

Population
es c r u eso R al
(Size, Distribution, Growth Rate ,Gene Pool)

Heredity

tur a N

Cu ltu r

eS y st

em

Life Expectancy Internal Satisfaction Impairment

Environment
Physical (natural and man made), Sociocultural (economics , education, employment, etc.)

ci al

External Satisfaction Reserve Interpersonal Behavior

So

So

Health (well-being) Psychic

m at ic

Discomfort Disability Participation in Health Care Health Behavior

Absence of disease

Medical care services

Prevention, Cure, Care, Rehabilitation

Social Behavior Ecologic Behavior

The maximization of the biological and clinical indicators of organ function and Eco the maximization of physical, mental, and role functioning in every iday ons life l
ogi ca l Bal a nce

Life style
Attitude, behavior

ma Hu

isfa t a nS

ct

Source: Blum(1983)

Ageing Population
Functional decay, chronic diseases, may need partial or full support/health care The need for support/health care is gradually increasing No easy way to break up support and health care A belief of the continuum of care Welfare steps in and plays a major role for caring ageing population

Provision of Wellbeing
SP SP NHI NHI
Health Health Acute Sub-acute Promotio Screening Primary Secondar Tertiary Chronic Setting Home Community Institution Disable Mental Function lost Old Age Self Support Care

LCI

LCI

: :

: :

A Framework of Holistic Care

Management Regulation

Policies

Management Regulation

Payer Contributors

Fiscal intermediaries Third party

Systems Transformation/ Production

Distributors

Producers

Consumers

Health Promotio Setting Home Community Institution

Health Screening

Acute Primary Secondar Tertiary

Sub-acute Chronic

Disable Mental Function lost

Self

Old Age Support

Care

Organization Forms and Funding

Management Regulation

Policies

Management Regulation

Payer Contributors

Fiscal intermediaries Third party

Systems Transformation/ Production

Distributors

Producers

Consumers

Public funding Personal funding Charity funding

Public

Volunteer Producer

Private NP Platform

Private FP

Composition of Funding
The proportion of personal and charity funding required by the system depends on the proportion of public funding put in . Public funding depends on how much public taxes/insurance premiums the public willing to pay. Charity/donation funding can alleviate personal funding burden. Whos burden need to be alleviate? Priority setting?

More Opportunities
Management Regulation

Policies

Management Regulation

Payer Contributors

Fiscal intermediaries Third party

Systems Transformation/ Production

Distributors

Producers

Consumers

In addition to traditional drugs, devices, medical/surgical supplies R&D, Mfgrs, distributors, many potential opportunities can be imagined, some are on-going, and some enjoy fruitful payback.

Private FP Producer Platform

Extensions
Management Regulation

Care Mkt Domestic Policies Systems Transformation/ Production

Management Regulation

Payer Beauty Foreign Mkt Contributors Policies

Fiscal intermediaries Third party

Distributors

Producers

Consumers

Health Promotio Setting Home Community Institution

Health Screening

Acute Primary Secondar Tertiary

Sub-acute Chronic

Disable Mental Function lost

Self

Old Age Support

Care

Where is the market?

Who are your customers?
Users, providers, fiscal intermediaries, downstream parties

Who are potential competitors? Why is it the right product for customers? How to approach customers? How much does it cost?

Value Chain of Biomedical technology

Commercial Commercial
Producer
Pharmaceutical Mfg. Medical devices Med-surg supplies Pre-clinical Research

Testing Testing
Venture Capital

R R& &D D

Pharmaceutical
Molecular Target Identification

Safety & Efficacy

Lead Optimization

Lead Discovery

Validate Target

CSO

CMO
Clinical Research

CRO

Products / sales Post-market surveillance

Phase 3

Phase 2

Phase 1

Industry trends
Structural changes to the value chain
Used to be integrated pharmaceutical companies competing across the value chain as a whole. New industry segments
Biotech and drug delivery technologies created many specialized companies. Genomics required R&D companies significant investments in risky technology and information platforms. Intensive M&A activity changed the structure of the competitive environment. Globalization has led to heightened competition across all pharmaceutical markets.

Partnership and collaboration

An industry-wide R&D productivity decline has bed to a widening gap b/w shareholder expectations and productivity levels in the pharma industry. Biotech, drug delivery and genomics technologies all provide specialist capabilities through which industrywide productivity gains can be driven. M&A activity provides distinct tiers of competition along with critical mass through which economies of scale and scope can be generated. Globalization ensures the returns from investment are maximized through global marketing. The key market devices used to connect disparate technology, functional, therapeutic and geographical expertise and capabilities are partnerships and collaborations.

A Deal Involving
Two parties, buy and seller Two expertise, negotiation and valuation

The Deal-Making Process

Once potential partnering firms have concluded that individual strategic goals can be satisfied through an agreement, the structure, terms and value of the agreement must be negotiated and agreed upon. Reaching agreement is more difficult and time consuming than initiating it. Both parties enter the negotiation with different expectations (e.g., deals value, provisions). The parties would not share all of their information and expectations (estimate the uncertain variables individually).

Determining Structure and terms

Involving three key stages
Forecasting the overall lifetime value of the product assuming it reaches market The value of the asset apportioned between each partner fairly Apportioning the remuneration between lumpsum payments, milestone payments, and running royalties, and determining the financing mechanisms used.

Valuation Supporting Negotiation

Enabling negotiators to estimate and quantify potential outcomes More convincing arguments for a technology value Improving the pace of reaching consensus (the fair, equilibrium price) Better valuation technique improves negotiating position.