Healthcare remains a growth sector

• Healthcare market to grow from EUR 260 billion to EUR 450 billion by 2020
• Patients are becoming increasingly vocal and are demanding more transparent services and quality

The healthcare sector makes up the biggest segment of the German economy and has extremely promising growth potential.

It combines service with high tech, and demographics are also developing in its favor. A Roland Berger Strategy Consultants study has found that rather than focusing discussions on costs and financing, growth opportunities in the healthcare sector should be addressed and innovation encouraged. The study "Innovation and growth in the healthcare sector", which was conducted in cooperation with Prof. Klaus-Dirk Henke of the Berlin Technical University, is based on interviews with around 20 industry experts. In addition to taking stock of the current situation, the study also identifies trends and opportunities in the healthcare sector.

"Patients' heightened health awareness, medical and technical progress and increasing life expectancy are fueling demand for healthcare services," says Dr. Joachim Kartte, Partner at Roland Berger Strategy Consultants' Pharma and Healthcare Competence Center. The growth trends of the past decade are therefore expected to continue. Since the mid-1990s, the healthcare sector's annual growth has consistently been one percentage point ahead of Germany's overall growth. With a workforce of over four million people, the sector employs 10 percent of Germany's wage earners. The authors forecast that the healthcare market will balloon from EUR 260 billion today to EUR 450 billion in 2020.

Growth in the healthcare sector is accompanied by patients' increasing demands. They have become more vocal and are insisting on transparency so they can make their own decisions on which services to choose. With this shift in patient awareness, the willingness to finance healthcare services privately has also increased. In 2003, Germans spent around EUR 20 billion on healthcare, of which they paid 20 percent out of their own pockets.

Private healthcare expenditures should be invested in innovation

Private financing should go toward innovation, as patients who invest more money in their own health also benefit from the latest therapeutic developments. "This does not go against the principle of solidarity," Kartte says. "The airbag and the ABS system were also initially financed by a few luxury car buyers before they became standard features that everyone can benefit from. And these two technologies have undoubtedly made a major contribution to safety and health."

In order to make more resources available for vital medical innovations, the authors recommend that inefficiency such as double treatment be weeded out of the commonly funded system. What's more, systematic research to compare therapies could help rid the system of old or even damaging medical treatment practices.

Politicians and associations also have an obligation to strive for a better system. In order to foster the healthcare sector's further growth and increase the number of healthcare jobs, investments must be made in research and services. Deregulating healthcare structures is also necessary to improve quality and innovation. One way to do this would be to allow cooperation between different types of health insurance. Another would be to increase the scope for direct agreements between health insurance companies and service providers.