MUNICH, GERMANY--(Marketwired - September 28, 2016) - Europe's healthcare industry has started down the path of consolidating and professionalizing its care organizations, but it still has a long way to go. Bain & Company's new multi-national survey of nearly 1,200 physicians and almost 170 hospital procurement administrators in the U.K., Germany, France and Italy found that a large percentage of European physicians consider their organizations and themselves to be ill prepared to address changes on the horizon: more than half of hospital physicians surveyed would not recommend their organizations to their family or friends as a place to get treatment. These and other findings from the research underscore an urgent call to action for European healthcare organizations to move faster in renewing systems and processes to reduce healthcare costs and improve patient care.

Bain's report, 2016 Front Line of Healthcare: The Shifting European Healthcare Landscape By the Numbers, highlights the daunting challenges that Europe's healthcare systems face. In addition to being one of the most expensive healthcare systems in the world, they are also strained by the increase in chronic diseases and aging populations. According to the survey, more than 80 percent of respondents across Europe said they believe aging populations will have a major impact on the delivery of care going forward; 42 percent of those said this trend would have a negative impact on their ability to deliver quality care.

"European governments agree they must find a way to lower costs while improving the care and treatment options that are available to patients," said Michael Kunst, who leads Bain's Healthcare Practice in Europe, the Middle East and Africa, and co-authored the report. "As industry pressures continue to mount, we can expect to see healthcare systems across continental Europe become increasingly systematized, which threatens to limit physicians' prescribing freedom and impose greater controls on how they choose to treat patients."

Bain found that physicians' perceptions of their responsibility for costs are changing, and new payment models are putting providers at risk for outcomes. Compared to the U.S., physicians in Europe are more negative towards the impact of new payment models and cost control measures: 21 percent and 36 percent, respectively, say that these new processes and policies will have a negative effect on the quality care in the future. Yet, despite greater controls imposed on physicians' work, systemization does give providers improved means to measure performance and link a higher share of their earnings to physicians' performance. Interestingly, physicians said they are willing to tie their incomes to performance, except in the UK, where a pay-for-performance model already exists.

Compounding these pressures, physicians do not believe their organizations have the capability to meet future challenges. Only 30 percent of public hospital physicians said their organizations have the right structures in place and even fewer (29 percent) said their organization is making the necessary investments to address potential issues. This is in light of the fact that hospitals know they need to control costs. As a result, only one-quarter of physicians said they are inspired by their hospital's mission.

The systematization of healthcare in Europe will also have a direct impact on pharmaceutical and medical device manufacturers as changes cascade down the value chain. Purchasing decisions in Europe increasingly are becoming more focused on outcomes and economics. Bain's research shows:

  • The percentage of surgeons reporting that their procurement departments set direction or even lead the decision-making for the purchase of tools and devices has risen to 35 percent, up from 23 percent three years ago.
  • Across the European countries surveyed, 55 percent of surgeons report that they have stopped using a device because it was no longer supplied by their hospitals.
  • As in the U.S., competition will become fierce as hospitals switch to preferred vendor programs, giving category leaders a strong advantage. In Germany, 91 percent of surveyed procurement officers use 10 or fewer vendors for devices today, compared with 60 percent three years ago.
  • The importance of price as prescription criterion differs across Europe. More than 60 percent of UK physicians report that price matters, on par with the U.S. Despite Germany's regulatory efforts to control reimbursement pricing, 57 percent still view price as important prescribing criteria. Physicians in France and Italy give it considerably less weight.

Amid the growing systematized healthcare landscape in Europe, pharmaceutical and medical device manufacturers also have an opportunity to support physicians and providers in delivering superior value generation through their products. European physicians confirm new treatment innovation as a key driver of change and also rank it as the driver with the most positive impact on care delivery -- an unmatched 85 percent of physicians associate innovation with a positive impact on their ability to deliver high quality care.

Those companies that can go one step further, aggregating data to prove the efficiency and efficacy of their innovative products will have a clear advantage. The winners will build customer knowledge and the commercial clout to reshape one or two categories, introducing new value-added services and alternative pricing models.

"Physicians are sworn to uphold an oath to 'do no harm,' but nowhere is it written that they have to consider the economic cost of that," said Kunst. "Pharmaceutical and medical technology companies that can help providers manage both care and cost are in the best position to reap the real benefits of systemization."

Editor's note: To arrange an interview, please contact Aliza Medina at or +44 20-7969-6480.

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Media Contact:
Aliza Medina
Bain & Company
Tel: +44 20-7969-6480