It looks like healthcare and homecare could shape up to be a key theme for our industry in 2018.
From the ongoing debacle surrounding Obamacare and the new Administration in the US, to New Year warnings about the challenges facing healthcare systems globally, the medical sector is very much in the headlines as 2018 gets underway.
Today’s news from Air Liquide regarding its entry into Saudi Arabia’s homecare business could be seen as a sign that healthcare is coming to the fore again for the industrial gas and equipment industry.
If we cast our minds back to, say, 2012, homecare was certainly a buzzword around that time. With ageing populations, the sustained rise of more chronic diseases or conditions, ever-growing fiscal pressures on healthcare systems, and the development of technologies to facilitate greater patient freedom the homecare business was in high growth mode in recent years and a significant area of interest for the industrial gas community. Both Air Liquide and The Linde Group were noticeably active in strengthening their presence in this business from 2012 onwards, with a series of high-profile acquisitions.
This has continued in the five years that have followed. In an increasingly do-it-yourself (DIY) healthcare model, everything has been getting more personal, more convenient, more integrated and, ultimately, more cost-effective over the last half-decade. And the investment of the industrial gases industry has been no less active.
Healthcare has been and remains a major megatrend for society and the gases industry alike. What we have perhaps seen over the last couple of years are other geopolitical or macroeconomic factors taking centre stage for our industry; China, Iran, Qatar, carbon dioxide (CO2), the hydrogen economy, specialty gases, consolidation, and digitization have all been huge hot topics for the industry in more recent times.
With today’s announcement from Air Liquide, one might suggest that healthcare will become a hot topic again for the industry in the year(s) ahead.
More patients are better served than ever before, more innovative technologies continue to be developed (digitization is interlinked to this) and, for those operating in the homecare market, more and more growth continues to be found. Even in currently challenged economies, healthcare and homecare patient services are growing.
The world is waking up to the need for sustainable growth, with existing healthcare structures and business models under pressure. While the complexities and differences of these structures vary from region to region across the globe, the fundamentals are essentially the same – to deliver quality, affordable healthcare, while keeping costs under control. Cue, the homecare market.
As a business of the gases industry, homecare is comprised of respiratory services including oxygen therapy, sleep therapy, and ventilation services, while a proliferation of portable oxygen concentrators, constant positive airway pressure devices and ancillary equipment has been witnessed in the last decade.
Air Liquide already supplies medical gases to hospitals; with its acquisition of a majority equity stake (60%) in the respiratory division of Thimar Al Jazirah Company (TAC), it moves into in the distribution of respiratory equipment and sleep disorder diagnosis services in a Saudi Arabian healthcare market considered to have strong potential.
The region is not alone in having strong allure for those involved in the medical market, as I have already been reading this New Year. Global healthcare expenditures are projected to reach $8.7 trillion by 2020, from $7 trillion in 2015, according to a report from Deloitte UK, driven by improving treatments in therapeutic areas (TA) coupled with rising labour costs and increased life expectancy.
The firm’s 2017 Global Health Care Outlook report explains that the world’s major regions are expected to see health care spending increases ranging from 2.4% to 7.5% between 2015 and 2020. Even as countries strive to expand healthcare access or institute forms of universal coverage, infrastructure issues are making it increasingly difficult for public health care systems to sustain current levels of service and affordability. This challenge in localised care delivery, combined with cost concerns and other clinical factors, leads to a complex and inter-related challenge.
It’s generally accepted that today’s healthcare delivery models need to be multi-pronged, collaborative and technology-enabled to remedy this modern global megatrend. A re-think of traditional care models needs embracing; homecare, digitization and virtual care are widely suggested as parts of the solution as the healthcare sector adapts to market forces. Healthcare leaders should consider building ecosystems that embrace non-traditional players and sources of knowledge outside their own four walls, continues the Deloitte report.
All of which opens the door for the industrial gas and equipment industry, with its unparalleled expertise in the science and delivery of medical gases as well as its new dawn in digitization, to play a leading role in advancing cost-effective regional healthcare services.
Air Liquide’s entry into Saudi Arabia’s homecare business this January is a timely reminder of this opportunity.