Roland Berger study on the healthcare market

• Customers want differentiation: 93% (of 1,000 insured) would move away from the standard offers and choose plans with additional or limited services
• 83% want increased efforts to push preventative care
• The majority wants an individual say in healthcare provision; control is mostly likely accepted when it comes to drugs and medication
• Healthcare is becoming a market – by means of increasing transparency and through customer maturity and service providers' new approach to new businesses
• The privately financed secondary healthcare market is continuing to grow, already reaching an estimated EUR 64 billion in 2008
• The secondary healthcare market has a high share of preventative services, therefore contributing to reducing the financial burden on the healthcare system

Germans want a different healthcare system. 93% want individualized services and are prepared to pay for them. Health insurance companies, doctors and hospitals are expanding their range of products and services, such as additional services for self-pay patients or preventative measures. This is the conclusion of a study by Roland Berger Strategy Consultants on strategies of providers in the German healthcare system and their acceptance by the public. The study comprised a survey of 1,000 adults. The result: Germans have switched from service recipients to active customers.

"People want a different healthcare offering," says Joachim Kartte, Head Partner of the Pharma & Healthcare Practice at Roland Berger Strategy Consultants. "They are already prepared for the new world of healthcare." The overwhelming majority of those surveyed is also prepared to dig a little deeper into their pockets for individualized services.

Freedom of choice instead of standard care

Most people with health insurance want to decide for themselves which services they can use. "93% would turn down a standard offer from their insurance provider and choose a different plan – if they could!" says Kartte. Conceivable are multi-step models that range from basic (at low rates) to premium healthcare with additional services that can be individually selected, but which are also more expensive. However, seeing that many people would refrain from – in their view – unnecessary services, contributions would drop. At any rate, Germans are willing for pay more for better services.

New types of services

Many people would welcome totally new services, such as lifelong healthcare consulting. The majority would also be willing to convert their homes into healthcare centers. This means recording medical data such as blood pressure or weight at home and passing this on to a control station, without visiting a doctor. Nevertheless, "the key contact remains your GP. He or she has proven credibility that goes well beyond simple medical care," says Karsten Neumann, co-author of the study and Principal in Roland Berger's Pharma & Healthcare Competence Center. Many Germans could also envisage their doctor's office providing sports advice or nutrition consulting. However, practically nobody would like to forego their freedom in choosing a doctor. In contrast, 60% would accept restrictions to which providers they can use for medication if this leads lowers rates.

Greater interest in preventative care and consulting

Most Germans would like to see more efforts devoted to preventative measures. 83% believe German legislation should create financial incentives to bring down the total cost of the healthcare systems. 81% would use prevention packages provided by their doctor. 61% would welcome linking healthcare rates to a healthy lifestyle. 60% would be willing to pay for prevention and healthcare checks out of their own pocket. Most would like to see their health insurance companies not only pay for medical healthcare, but also help them answer healthcare questions and to find appropriate treatment options.

New business models and roles for players in the healthcare market

"Innovative healthcare companies, doctors, hospitals and industry businesses are moving away from their original roles and now shaping the healthcare market with entrepreneurial thinking," says Kartte. "Traditional core healthcare is also experiencing a transition due to increasing transparency and through customer maturity and provider innovation in the market."
Hospitals, health insurance companies and providers are broadening their offers and provide various different services in the secondary healthcare market. Already today, 65% of major German hospitals offer additional services for self-pay patients. Travel operators receive subsidies from hospitals for wellness trips. And these areas will experience considerable convergence in the future. Instead of simply adhering to legislation, businesses are actively seeking out new markets. More and more statutory health insurance companies are broadening their businesses in the direction of private offerings, such as offering out- and in-patient services. Others have entered the secondary healthcare market using platforms and club offers, or are transforming themselves more into service providers by managing the type and scope of provisioning.

In contrast, service providers are trying to provide more insurance-type of assistance. Pharmaceutical and medical engineering companies will develop from product suppliers to service providers and gear their sales toward new target groups. Fierce competition will develop between the in-patient and out-patient sectors. The topic of health will become relevant for more and more new industries. In an integrated healthcare market, each player can be active on any field. This is because new product ideas are always in demand.

Growth and costs

Developments in healthcare are being driven by two factors. The growth of privately financed secondary healthcare market is a positive factor. In 2008, this was worth an estimated EUR 64 billion. The emergence of new sub-markets, such as for safety mobile phones or healthy cosmetics, will generate new market growth. Overall healthcare market expenditures have risen over the past few years by 4% annually. These additional expenses indicate substantial growth. For instance, the market for organic food jumped 13.4% annually, while the market for fitness and wellness rose by 5.8% each year. The statutory healthcare market is also growing steadily, but this growth in the core area of healthcare is a problem. Since the 70s, expenditures in this area have grown disproportionately to economic development – despite healthcare reforms. This trend will continue, due primarily to demographic developments and the progress in medical devices. People are getting older and fewer younger people must finance healthcare for everyone. Most experts assume that the average rates for healthcare insurance will increase to 25 to 30% by 2050. This should be countered with increased efficiency, but above all by promoting prevention. The self-payer market is characterized by preventative services, and therefore is helping to finance the healthcare system already today.