November 09, 2006 12:40 ET

A Prescription for Healthcare Transformation: IBM Study Outlines Course of Action for a Sustainable Healthcare Industry

ARMONK, NY -- (MARKET WIRE) -- November 9, 2006 --Today IBM (NYSE: IBM) released a new study which indicates that many healthcare systems around the world will become unsustainable by 2015. The study highlights the need for public and private healthcare systems worldwide to reform how care is funded, delivered and evaluated in order to reduce costs, improve care and help nations remain competitive in a global economy.

Conducted by the IBM Institute for Business Value, the global study, titled "Healthcare 2015: Win-Win or Lose-Lose?" presents a comprehensive overview of the current challenges faced by the healthcare industry and provides a roadmap for transformation.

While medical breakthroughs, dedicated professionals and the promise of genomics, regenerative medicine and information-based medicine have promising healthcare implications, the study concludes that the problems facing the industry will force fundamental change on healthcare within the coming decade.

The study chronicles the current problems such as rising health care costs and poor and inconsistent quality. It also highlights the trouble ahead as these factors combine with a fundamentally new environment that is driven by globalization, consumerism, demographic shifts, the increased burden of disease and expensive new technologies and treatments. Healthcare systems that fail to address this new environment will "hit the wall" or collapse, and require immediate and major forced restructuring -- a lose-lose scenario for all stakeholders.

The study outlines a course of action on the part of all stakeholders, which will require new levels of accountability, tough decisions and hard work. Specifically IBM recommends:

--  Healthcare providers must expand their current focus on episodic,
    acute care to encompass the enhanced management of chronic diseases and the
    life-long prediction and prevention of illness.
--  Consumers must assume personal responsibility for their health and for
    maximizing the value they receive from a transformed healthcare system.
--  Payers and health plans must become value-added service providers both
    for their members and for the care delivery organizations who serve those
--  Suppliers must work collaboratively with care delivery organizations,
    clinicians, and patients to produce products that improve outcome or
    provide equivalent outcomes at lower costs.
--  Societies must make realistic, rational decisions regarding lifestyle
    expectations, acceptable behaviors, and how much healthcare will be a
    societal right versus a market service.
--  Governments must acknowledge the unsustainability of the current
    system and provide the leadership and political will power needed to guide
    their nations to sustainable solutions.
To report's recommendations for shifting the healthcare industry into an era of action and accountability are based on three fundamental cornerstones:
--  Focus on value - Consumers, providers and payers will agree upon the
    definition and measures of healthcare value and then, direct healthcare
    purchasing, the delivery of healthcare services, and reimbursement
--  Develop better consumers - Consumers will make sound lifestyle choices
    and become astute purchasers of healthcare services.
--  Create better options for promoting health and providing care -
    Consumers, payers, and providers will seek out more convenient, effective,
    and efficient means, channels and settings for healthcare delivery.
In addition to discussing the drivers and inhibitors of change in healthcare and emphasizing the need for all stakeholders to accept more responsibility and accountability for their roles, the study's authors offer some advice on how to start making some changes. These suggestions include: developing a shared vision and a comprehensive long-term plan, building and sustaining a case for change, providing universal coverage for basic services, fully leveraging the capabilities of information technology and balancing collaborative innovation with proven global best practices. The study also provides a tool to assess a country's ability to transform its healthcare systems and suggests principles to guide in the transformation.

While the Healthcare 2015 study paints a portrait of what the global healthcare industry could look like a decade from now, and emphasizes the need for all stakeholders to accept more responsibility and accountability for their role in the system, it also acknowledges that part of the portrait already exists in some countries. However the study urges the global community to begin or accelerate the process of debate and consensus, and action and accountability on the road to healthcare transformation.

The IBM Institute for Business Value develops fact-based strategic insights for senior business executives around critical industry-specific and cross industry issues. This is part of an ongoing commitment by IBM Global Business Services to provide analysis and viewpoints that help companies realize business value. For more information on this report please visit

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