Director Management Consulting Claudia Palme published this editorial in the October 2016 Infomineo News Insight Healthcare newsletter:

The Kingdom of Saudi-Arabia’s Vision 2030: Establish an Empowering Health Care System

In April, Saudi-Arabia presented its vision for a “vibrant society, a thriving economy and an ambitious nation”. The Kingdom wants its citizens to live longer – from now expected 74 years to 80 years. It wants to “optimize and better utilize hospitals and health care centers, and enhance the quality of preventive and therapeutic health care services “. It wants to promote preventive care and reduce infectious diseases, and encourage citizen’s use of primary care. Doctors are to be given better training. The public sector is to focus on planning, regulatory and supervisory duties. Public corporations are to provide health care, enhance its quality and compete. Private medical insurance is being developed. Privatisation is on the horizon.

The agenda is long and ambitious. This reflects the complexity of the Kingdom‘s current health care challenges. Its health care expenditure is rising to more than $B 40 by 2020, with $B 5.5 required for non-communicable diseases while oil revenues have dropped sharply. Hospital beds and doctor quotas still rank below global levels after years of investment. Public health care for nationals and the private system for expats operate separately, with little synergies and efficiencies. The Ministry of Health and other government institutions are financing institution, legislator, operator and controller in one.

Corporatization is the „empowerment“ cited in Vision 2030 to address systemic and operational issues. The Ministry of Health will limit its role to regulator and supervisor. Hospitals and clinics will be transferred into a network of public companies that compete against each other and against the private sector. While this move might seem mostly conceptual, it actually represents a seismic shift in philosophy. The relinquishing of operational control at the central government level and the streamlining of traditionally abundant services have the potential to send ripple waves across every cog and wheel of health care in the biggest market in MENA.

This is where fact ends and speculation begins. The timeline for corporatization is still firming up. The degree of autonomy and the budget process of the future public corporations remain open for now. However, the necessary increases in efficiency and quality would mandate a few likely effects: National health standards, KPIs and value measurements. The possibility of private operators for public facilities. More efficient use of hospital beds and shorter hospital stays. The eventual shift of treatment from hospitals into more primary care settings. Regionalization of health care structures into regional hub-and-spoke systems. The possible fragmentation of centralized tenders. Eventually, privatization.

Already, the government has identified more than 30 opportunities for public-private partnerships. It has initiated first public dialogues with providers and suppliers. In the next steps of the reform, the change in governance will need to be broken down into operational decisions.  Private providers,  life sciences and medical technology companies, academia and service specialists have the opportunity to shape and support the evolution of the Kingdom’s health care system now – by generating data, making treatment more avaulable across the Kingdom, providing higher quality services, developing value-based approaches and market access models, offering expertise, reviewing their growth models and operations and in myriad other ways.

Claudia Palme, Managing Director, 55east Consulting

Director Management Consulting Claudia Palme and Batswadi’s CEO Christopher Whitfield published this editorial in the May 2016 Infomineo News Insight Healthcare newsletter:

Looking for the New Normal: South Africa in 2016

“South Africa is not a miracle. It is not going to hell in a hand basket either” Baron Peter Hain put it in CNN’s Amanpour a few weeks ago. The latter seems to contradict all facts: natural resource exports are down, growth is less than 2%, the rand hit a 14-year low against the dollar in December 2015, South Africa’s credit rating was downgraded to BBB- and the #ZumaMustFall campaign continues to gain momentum. Global life science companies’ headquarters are worried about investments, business cases and their “rising Africa” growth story.

As so often, the crises of the day and missed budget targets are obscuring the larger picture. The turbulences of the times belie the consistent investment – at an investment level of 3.5% higher than the 5% of GDP recommended by WHO – towards a more comprehensive and equal healthcare system.

Multi-national pharmaceutical companies have traditionally served the private segment of South Africa’s two-tiered healthcare system. 84% of total pharma expenditure provide drugs for 16% of the population (7 m people). On contrast, 84% of the population (42 m people) under public health care are covered by 16% of pharma expenditure. This has made for a limited and complex, but fairly traditional market environment for Rx companies in particular; with a focus on marketing to doctors and dealing with private Medical Aid Schemes. Government regulated price increases have been the highest contributor to growth as volume change was limited and new products were delayed by registration challenges. In the public sector market, generic companies, including a strong local contingent, are supplying large quantities focusing on infectious disease treatment like TB drugs and ARVs.

The planned implementation of a National Health Insurance for all South Africans over the next 15 years will change the landscape dramatically. Far more than a healthcare financing scheme, NHI aims to completely transform healthcare provision and service, overhaul the entire system and radically change administration and management. Central to NHI is a comprehensive package of care underpinned by re-engineered primary healthcare. Primary healthcare will be delivered by district-based clinical specialist support teams, school-based Primary Health Care services and municipal ward-based primary health care agents. Payment of providers will move from a fee-for-service or state-financed system to risk-adjusted per capita payments for accredited and contracted public and private PHC providers and a global fee with a move to case-based payment mechanisms for hospitals. Providers will be contracted by district health authorities, focusing on cost containment and performance monitoring.

As NHI piloting has started in ten districts, Pharmaceutical manufacturers find themselves in an increasingly larger and more socialized market. More patients will have access to medicines in general, and especially innovative medicines. While volumes increase, international price benchmarking and new contracting will impact prices for branded drugs and drive generic consumption rates. Performance measurements and evidence-based approaches will emerge. Implementation hurdles and delays aside, it is a matter of time only that manufacturers need to navigate a new world and define the New Normal for business in South Africa.
Claudia Palme, Managing Director, 55east Consulting
Christopher Whitfield, CEO, batswadi

Identifying and accessing the growth opportunities in the emerging markets of the Middle East and Africa. Understanding the environment, regional markets, competitive structures and local business approaches to generate lasting competitive advantage and measurable results. Tailoring business models, expansion agenda, partnerships and practices to enable organizations to operate at full potential in new markets and geographies.

Assessing and tailoring business models to fit the strategic objectives and operational requirements of the organization. Helping clients to review and transform commercial positioning and conditions, contractual structure, scope of control, incentive structures and resource investment.

Analyzing the best approach to achieve regional strategic targets and identifying both organic and external growth opportunities. Structuring local alliances, partnerships and distributor relationships to create value and addressing alliance management challenges. Supporting regional post-merger integration by defining priorities, identifying synergies and setting out the integration roadmap and governance.

Assisting organizations to set clear and measurable strategic objectives and plan strategies to achieve their targets. Developing a strategic plan, detailing an investment approach and a practical roadmap with actionable initiatives.

Helping an organization define the scope and scale of its operations to maximize operational success. Specifically, developing the expansion agenda and its appropriate investment level, resource exposure, choice of own affiliates versus distributor operations, critical support functions, manufacturing strategy, stakeholder management and integration into global strategy and systems.

Structuring pragmatic and resource-efficient organizational set-ups and processes tailored to the organization’s strategy, investment level and business model. Supporting organizational success through structural governance, business processes, resource approaches and tools.  Addressing specific regional challenges in supply chain management, process stability, quality and distributor management.

Using regional customer insights to develop market offerings into a succinct go-to-market strategy across all commercial activities. Tailoring sales and distribution approaches and force to the complexities and logistical challenges of the region. Leveraging analysis and regional networks for access to markets and managing appropriate pricing models for emerging markets’ customer pyramid. Utilizing the region’s mobile infrastructure to create new models for engaging customers.

Securing your network, implementing things like certificate infrastructures, VPN and Single Sign On authentication concepts, Firewall and monitoring projects, security audits

Integrating Cloud components in existing IT environments. Our focus is on giving the client mobility, making him flexible and more independent from his desk. We aim to open up cost-effective options to get an IT infrastructure up and running in a new market with minimal investment.

Improving the efficiency of business IT with virtualization, automated installations, automated network auditing and documentation, scripting of routine tasks, implementing stringent permission and access concepts to reduce IT administration cost and implement consistent high service quality for company end users.

Helping to design and implement an IT support or development  process for client companies that generates consistent quality, customer satisfaction and more productivity.

55east together with BlueProfit in Munich, Germany, Shanghai Visionary Consulting in Beijing/Shanghai and Batswadi in Johannesburg, South Africa, have built the International Health Care Consulting Network (IHCC) to work with clients across the Health Care and Life Sciences industry. We provide strategic advice, operational experience and training to pharmaceutical and biotech companies, the medical technology industry, hospitals and clinics and health care payers. Based in four world regions, the IHCC employs local consultants to generate market insights and analysis in the Middle East, Africa, Europe and China and applies an integrated strategic perspective to the future of health care.