Global Healthcare Management
Emerges as a Multinational
Business/ Clinical Model
1
Fara Zakery, Ph.D.
Charles Sykes, Ph.D.
Robert Kamkwalala, Dr. Mgmt.
Joyce M. Eisel, Dr. P.H.
Harris-Stowe State University, Anheuser-Busch School of Business
For Presentation To
The IACBE Annual Conference and Assembly Meeting
April 15, 2015
Baltimore, Maryland
2
INTRODUCTION
Global healthcare management has been categorized by (1) its clinical nature
and (2) its multi-domestic responsiveness to globalization. However, as a result
of market, cost, government and competitive drivers; such as, pharmaceuticals
and medical equipment, the healthcare management field has evolved from a
Clinical, Multi-Domestic to a Multinational Healthcare Business/Clinical Model.
(MHBCM)
3
New Business Model
Proposal…Discussion…Questions Answered
1.
3.
4.
5.
6.
7.
8.
9.
Business models and their relationship to growth
The influence of drivers
Leadership competencies
Emergence elements
Need for critical business considerations
International expansion factors
The International Responsiveness Grid
Examples current Multinational Healthcare
Business/Clinical Model Initiatives
10. Recommendations
4
Growth of Economic Globalization
1975
Eight percent (8%) of the world’s countries had a
free market system based on supply and demand with
little or no government control.
2007
Thirty-eight percent (38%) had an idealized form of
a market economy - free-market system with $1644
billion in Foreign Direct Investment (FDI).
5
Growth (Cont.)
1997
Since 1997, health spending has been accelerating as a
percent of GDP among the Organizations for Economic
Cooperation and Development (OECD) countries
2000
Price Waterhouse Coopers Survey results estimate that by
2012 health spending for OECD countries will be more than $10
trillion. “By 2020, healthcare spending is projected to triple in real
dollars, consuming 21% of GDP in the U.S.”
6
2014 Highlighted Countries Data
Price Waterhouse Cooper (PwC)
7
Growth (Cont.)
2015
• Healthcare spending is expected to grow much faster than GDP in the
coming years.
• OECD Countries
Health spending as a percent of GDP will increase to 14.4% in 2020, up
from 9.9% in 2010.
• BRIC Nations (Brazil, Russia, India and China)
Health spending is projected to grow from 5.4% of GDP in 2010 to 6.2%
in 2020.
Stronger growth in health spending due to
(1) economic growth (2) building out of health systems.
8
Three Definitions of Key Terms
1. Clinical
The term clinical relates to the examination and
treatment of patients. (3)
9
2. Multi-Domestic
The term Multi-domestic has been used to describe a set of strategies used
by companies that operate in more than one country at a time. As smaller
businesses expand their operations into markets overseas, they tend to act
differently than their larger competitors, many of them choosing a Multidomestic strategy. The best definition of a Multi-domestic company is a business
that uses a different approach in each of the markets it operates in. (4)
10
3. Multinational Enterprises (MNE)
Engagement in foreign direct investment by directly controlling and managing
value adding activities in other countries. According to the International Labor
Organization, a United Nations agency, a multinational enterprise is more
powerful than an economic investor alone. A multinational with operations in a
given country can promote social and economic welfare, improve living
standards and foster such human rights as freedom of association. (4)
11
UNTIL TODAY !!
International Healthcare Management
has been categorized by
ITS MULTI-DOMESTIC
RESPONSIVENESS TO
GLOBALIZATION
ITS CLINICAL NATURE
12
International
Geocentric
Perspectives
Now
Shape
The Future Globalization of
Health Care Management
13
Evolution of International Healthcare Management
DRIVERS INFLUENCE PERSPECTIVES
Cost
Markets
Competitive Attitude
Government
14
Drivers Influence Perspectives
Customers
Generation Y
An Aging
Population
Competition
BRIC Countries –
Brazil, Russia, India
and China
Shortened
Product Life
Cycle
15
Why Would We Not Go Abroad?
• The U. S. Global Health Initiative (GHI) Budget Request for FY
2011 was $9.6 billion (over $5 billion for HIV). In 2007 the
U.S. spent $5.3 trillion dollars worldwide with 59 million
health care workers, according to the World Health
Organization (WHO). (8)
• The world population is growing by 80 million per year.
• According to the U.S. Central Intelligence Agency, July 2014,
the world population was 7,174,611,584 billion est. United
States 318.89 million.
16
Historical Measurement of Industry Structure
Global
______________
Pharmaceuticals
Scientific Instruments
Local
Food and Beverages
Health Care
Kedia, (11)
17
Multinational Business Model Emergence Elements
Collaborative
Political
Relationships
Scientific
Advances
Expanding
International
Leadership
Perspectives
Profit and
Nonprofit
Incentives
CrossCultural
Demands
Web Based
Tools/ Cloud
Information
Technology
Emergence
Factors
Service vs.
Product
Manufacturing
18
Questions to Ask Ourselves
>How Have the Emergence Elements of the Multinational Business
Model Affected the Globalization of Health Care Management?
>What are the Combined Critical Factors to Consider Now?
>Can Healthcare Save the Global Economy?
According to William Trombetta, J.D., professor of pharmaceutical and healthcare
marketing “Healthcare isn’t going to solve everything overnight, but it can be a
powerful catalyst to turn things around.” (15)
19
GLOBAL
FACTORS
SOCIAL
NETWORKING
ECONOMIC
STABILITY
LEGAL
SYSTEMS
GOVERNMENT VS.
PRIVATE HCM
SYSTEMS
WAR, DISEASES,
PANDEMICS
GOVERNMENT
PAYMENT
SYSTEMS
MEDICAL
TOURISM
INDUSTRY
CULTURE
MEDICAL
EQUIPMENT
INDUSTRY
ALTERNATIVE
MEDICINE
OPERATIONS
PHARMACEUTICAL
TECHNOLOGY
INDUSTRY
FINANCIAL
MEDICAL
SYSTEMS
WEALTH
WORKFORCE
EDUCATION
BIOTECHNOLOGY
20
Essential Global Leadership Competencies
Legal
Cultural
Technological
Opportunity Recognition
Political
An understanding of policy and power goals, local and economic
implications, different governmental structures, decision-making
processes.
International
Technological and cultural competencies are needed Diverse,
heterogeneous communities have different fiscal, social, political and
communication systems which are interrelated to goals; technological
needs or gaps, capabilities and limitations, relationship to cross cultural
communication, integration of communication, collaboration and trust.
21
To Summarize
AS ONE VIEWS THE HEALTH SYSTEM, GLOBAL CONSIDERATIONS, AND THE HEALTHCARE
BUSINESS POTENTIAL, THE NEED FOR CRITICAL CONSIDERATIONS BECOMES EVIDENT.
• Although individual countries may be performing at varying levels,
each has a significant opportunity to improve. It is critical to
define the critical components, and develop metrics to establish a
baseline to monitor performance. (16)
• Medical/Biotechnology – The integration of science and
technology to create agriculture or medical products through
industrial use and manipulation of living organisms. (17)
•
In 2012, pharmaceuticals were the 4th largest export at $40 billion
or 3.1% of total U.S. exports (18)
22
Summary continued
• According to Globalmedia, the medical device and diagnostics industry
currently is valued at over $150 billion. Technological advances in medical
device and diagnostics design are driven by and increasingly demanding
market, a growing patient population and a worldwide governmental
drive towards preventative therapies. (globaltrademedia.com) (19)
• Education of the workforce is now a critical factor in harnessing
information and technology as clinicians become more knowledgeable
and efficient with the switch to digital information.
•
Global Health Insurance carriers need to understand global markets inside
and out.
• Issues of the increased threat of pandemics also affect funding for
international healthcare; for example, HIV/AIDS.
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Global Health Care Management
Results of International Business Expansion
Global
Business/Clinical Management
Perspective (BCMP)
Clinical
Perspective
Integration Responsiveness Grid
Global Integration
2012
Proposed 2014-15
Global
Strategy
Example:
Engines
Transnational
Strategy
(Multinational)
Pharmaceuticals
Telecommunications
Global
Strategy
Example:
Engines
Transnational
Strategy( Multinational)
Example:
International
Strategy
Example:
Metals
Multi-Domestic
Strategy
Examples:
Foods
Health Care
(Clinics)
International
Strategy
Example:
Metals
Multi-Domestic
Strategy:
Example:
Foods
International
Healthcare
Example:
Cardinal Health
Cardinal Health
An Example of the Business/Clinical Management Perspective
(BCMP)
•
•
•
•
Headquarters: Dublin, Ohio
$87 Billion Company (22.20 Billion in revenue last quarter 2013)
Ranked Number 19 on Fortune 500 (in sales) in 2013
Pharmaceutical and retail is larger in revenues than; for example, CVS,
Walgreens and Phizer
• Health care supply chain services, clinical technologies and services,
medical products and technologies
• 30,000 employees on six continents
• “Cardinal Health believes that there are large and diverse opportunities in
the still fragmented $4 trillion health care industry worldwide.”
Recommendation
It is recommended that Schools of Business
integrate the Multinational Healthcare Business/
Clinical Model into the curriculum to prepare
students to be transformational, visionary leaders
who have a sense of mission and are capable of
motivating their followers to accept new goals,
meet apparent international demands, and seize
the projected growth opportunities in the
healthcare field.
Thank you!
Questions?
Comments?
Fara Zakery, Ph.D., Charles Sykes, Ph.D., Robert Kamkwalala, Dr. Mgmt., Joyce Eisel, Dr. P.H.
Abstract
Global Health Management Emerges as a Multinational Business/Clinical Model
Historically, global health management has been categorized by (1) its clinical nature and (2) its multidomestic responsiveness to globalization. However, as a result of market, cost, government and
competitive drivers the healthcare management field has evolved from a Clinical, Multi-Domestic to a
Multinational Business /Clinical Model.
This emergence is the result of factors; such as, expanding international leadership perspectives,
collaborative political relationships, profit and nonprofit incentives, scientific and technological
advances, distribution efficiencies, strengthened economic capabilities, cross-cultural demands and
international leadership perspectives. In addition, web-based tools have been responsible for powerful
changes in communication and information technology. The convergence of these elements has shaped
and challenged international growth and the future of the healthcare field.
Whereas, the worldwide need for clinical research, patient services and medical expertise continues to
grow within the nonprofit sector, the healthcare business potential is evident in spheres that include
pharmaceuticals, medical equipment, diagnostics, financial services, hospitals, technology and medical
tourism. Therefore, it is expected that the multinational healthcare industry will continue to expand as
boundaries become more fluid and strategic opportunities becomes more globalized.
Consequently, it is recommended that Business Schools integrate the Multinational Business/Clinical
Model into the curriculum to prepare students to meet the apparent challenges, lead the globalization
trends and seize the projected growth opportunities in the healthcare field.
References
•
1. Friedman, T., Globalization, Anchor Books, New York 2000
•
2. Health Cast 2020, Pricewaterhouse Coopers’ Health Survey
•
3. www.medterms.com/script/main/art.asp?articlekey=21959
•
•
4. Peng, M., Global Strategy, 2nd ed., Cengage Learning p.495. Journal of International Studies, Multi-Domestic, 2009
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5. tp://www.ehow.com/facts_6149397_definition-multinationalenterprise.html#ixzz2GHQtiaiR
•
6. Luthans, F.; Doh, J., International Management, McGraw-Hill Irwin, Eighth Edition 2012, pp.623-24
•
7. 9,11,14,21,22, Krug, J. and Kedia, B., FDIB Globalization Seminars, The University of Memphis, June 2012
•
8.World Health Organization, World Health Statistics, 2009
•
9. U.S. Central Intelligence Agency, July 2011
•
12. Aspirin, http://www.aspirin.com/faq_en.html
•
13. “Medical Imaging Technology”, Global Trade Media, Web 17 Nov 2012.
http://www.globaltrademedia.com/products/medical-imaging-technology.html
•
15. Steigleman, C., “Can Healthcare Save the Global Economy”, Haub School Review, Saint Joseph’s University, Haub School of
Business Magazine, Fall 2012
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16. Fried, B., Gaydos L.; Editors, World Health Systems, AUPHA, 2nd edition, 2012 p. 45
•
17. http://www.slideshare.net/alyssa_munk/meeting3
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18. www.worldsrichestcountries.com/top_us_exports.html
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19. (globaltrademedia.com) globaltrademedia.com
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20. www.patientsbeyondborders.com/medical-tourism-statistics-facts
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22. Bartlett, C., Beamish P., Transnational Management, McGraw- Hill Irwin, 6th Edition, 2011, p.vii
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23. Peng, M., Global Strategy, South-Western Cengage Learning, 2nd edition, p.457-458
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24. Thank you to AABRI International Conference participants for their comments and suggestions, Orlando, FL, Jan 2013