Ernest Madu, MD, FACC and Paul Edwards, MD, FACC
Heart Institute of the Caribbean (HIC) and HIC Heart Hospital
Correspondence to firstname.lastname@example.org or call 876-906-2107
This week, we will continue our series on healthcare re-imagination in Jamaica by looking at the structure of private healthcare system in Jamaica, the economics of healthcare and the potential for economic growth through targeted investment activities in healthcare and related services. Professor Hans Rosling, the late Swedish Health Economist at the Karolinska Institute was one of those who did seminal work in showing the links between economic development, poverty, and health. Sir Michel Marmot at the University College of London has similarly argued that that socio-economic position is an important determinant for health outcomes. Based on comparative studies, Marmot argues that we can make our society more participatory and inclusive to increase overall public health. A healthy workforce is a more productive workforce. A robust and well-established healthcare ecosystem is critical in keeping populations alive, healthy, and productive for a longer period. Disability adjusted life expectancy reflects the ability of a society to keep its citizens productive without major disability. This requires significant investment in healthcare to adequately diagnose, treat, and maintain those patients with chronic life-threatening conditions, recognizing that such an investment adds to economic growth and prosperity by directly and indirectly by improving healthy years of productive work.
For many decades, Jamaica’s economy has been largely fueled by the tourism sector, but the COVID-19 pandemic has exposed the risk to our Island by an over reliance on a single sector to drive economic growth. Healthcare is a service that is agnostic and would be required by every citizen at one point or the other. Spending on healthcare brings additional return to society as the patients recover and return to productive ventures. A developed healthcare system is a major employer of labour and so drives economic growth directly and indirectly. Multiple downstream services and industries also develop as the healthcare industry matures and these industries and services drive further economic growth and employment. A healthier and more productive workforce drives the economy and improves overall socioeconomic standing resulting in more individual autonomy and improved healthcare indices. It is time for us to re-imagine the opportunities in the healthcare space to drive economic growth for the Island.
Unlock the economic and investment opportunities in healthcare
Gross Domestic Product (GDP) measures the value of goods and services produced in each nation. Health spending as a share of a nation’s GDP shows the importance of the health care sector in a nation’s economy. As a share of GDP, the United States spends about 18% of its GDP on healthcare. In Jamaica, that figure is between 5.2% and 5.9%. Total Expenditure on health (THE) measures the final consumption of health goods and services (i.e. current health expenditure). This includes spending by both public and private sources on medical services and goods, public health and prevention programs and administration. To compare spending levels between countries, per capita health expenditures are converted to a common currency (US dollar) and adjusted to take account of the different purchasing power of the national currencies. Total Health Expenditure for Jamaica is low when compared to other comparable Islands. Total health expenditure per capita for Jamaica stands at USD294 and is lower than comparable Caribbean Islands like Trinidad and Tobago (USD1,146), St Lucia (USD482), Antigua and Barbuda (USD657), St Kitts and Nevis (USD907) and Costa Rica (USD 929).
The low indices for Jamaica reflect significant underfunding of healthcare services in the Island and presents an opportunity to unlock the potential for investment in the healthcare sector to generate employment and economic growth. A 2019 study by Deloitte has identified healthcare as a growth area for economic activity and job creation in the next decades. An increasingly aging demographic has been spending more on curative and preventive care and with the expanding pool of retired baby boomers, the healthcare industry is poised to grow at a faster pace and presents a unique opportunity for Jamaica especially in the post-COVID era. Furthermore, technology and information advancements will help accelerate the growth in healthcare services as the world embraces telemedicine and virtual care. Unfortunately, private sector investment in healthcare in Jamaica has been significantly stymied by fragmentation and bureaucratic obstacles and we have ceded advantage to other countries in the region like Cayman Islands and Costa Rica which have become attractive targets for healthcare investment dollars, medical tourism and economic contribution. By the last quarter of 2017, for the first time in history, health care surpassed manufacturing and retail, the most active job creators of the 20th century, to become the largest source of jobs in the U.S.A. Similar trends are forecast for other countries who recognize the inherent resilience and resistance of healthcare to globalization and automation, the two most destabilizing forces for labor in the 20th century. While globalization has reshaped global market for manufacturing labor and most services and disrupted usual supply chains, health care demand is largely local and so benefits from globalization by attracting a willing labor pool and medical tourists while resisting the negative impact of globalization by the inherent local demand for healthcare. It makes sense therefore for nations to aggressively develop healthcare delivery systems and supply chains to improve the health of their population, enhance economic activity and generate employment.
COVID pandemic has shown the enormous risk to an economy like Jamaica that is overly dependent on one sector, tourism. As the pandemic continue to limit international travel and continue to adversely impact tourist arrivals, it is time to take a serious look at other sectors of the economy that have received only scant attention as investment targets. Healthcare is one such sector. Encouraging investment and growth of the healthcare sector will enhance the health of the population, improve quality of life, spur economic growth and generate much needed skillsets and jobs for the younger population. Cayman Islands and Costa Rica have shown what is possible in the region. Jamaica can and should take advantage of the opportunity in the post-COVID world.
Need to Resolve Fragmentation in the Healthcare Space to improve Access and Quality of Care
The current private healthcare ecosystem in Jamaica is fragmented and made up of multiple solo providers of many critical services. In our context there are only a few groups of 3 or more providers. This fragmentation underlies many of the problems and inefficiencies that face the private healthcare ecosystem. Providers of essential healthcare services always need to have sufficient capacity and resilience to withstand external shocks while providing care that is reliable and consistent in quality. Ideally, private healthcare providers should have enough personnel and operational capacity to provide emergency and after hour services. This consistent healthcare service cannot be efficiently supplied by a system of predominantly solo providers.
One problem resulting from the fragmentation of the private healthcare providers is the inefficient utilization of human and capital resources. This is evidenced by poor allocation of capacity relative to areas of high need or demand. The human capital in a fragmented healthcare system operates in silos, unmatched to the demands for services. This human capital can be thought to exist in an excessive but underutilized capacity. In this scenario, there may be multiple providers of a service, but this service is never or poorly available after hours, on weekends or on holidays. A large integrated healthcare system is often better able to ensure access to essential services on a 24-hour basis.
Another downside of fragmentation in healthcare delivery can be found in the quality of the care that is delivered. There can be issues in the continuity of patient care as patients may be managed by different providers with limited knowledge of what may have been done in other settings. An integrated healthcare system opens opportunities for physician collaboration which can be useful in rare or complicated cases. Fragmentation can also lead to lack of standardization and loss of the ability for peer audit. Knowledge and adherence to standards of care and peer review of quality of practice has been demonstrated to improve the quality of the service delivery.
Finally, fragmentation multiplies operational costs related to the delivery of services and results in cost escalation to the end user. Consolidation on the other hand benefits from economies of scales, expands access to care, improves quality of care and stabilizes cost of care to end users. This should result in better outcomes for our patients. The result is beneficial to both providers and end-users.
In subsequent articles, we hope to explore the issues impacting healthcare investments in Jamaica, explore potential healthcare investment targets and opportunities and propose practical solutions to fragmentation of our service delivery pipelines with a view to re-imagining and improving quality, access to care and overall public health in Jamaica post COVID-19.
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