Minimilly invasive surgery and ambulatory plus homecare services to the forefront in European hospital market

London 28 November 2002Increases in health care expenditure, rises in surgical procedures, and cost containment measures are some of the key characteristics that will define the European health care landscape in days to come, reveals a new study by Frost & Sullivan. By 2020, almost a quarter of Europe's population will be aged over 65. This demographic trend is likely to have a three-fold impact on health care development.


Firstly, it will drive ambulatory and day-case surgery, thereby obviating the expense of prolonged hospital stays. Secondly, it is expected to swell the number of surgical procedures, particularly ophthalmology and orthopaedics. Thirdly, the substantial health care needs of this segment are expected to be one of the primary catalysts to increased health care expenditures.

The trend toward ambulatory and homecare markets is expected to be as much a function of a rapidly aging population, as it will be to minimise on hospital expenditures. In this setting, portable medical devices with attributes of safety, convenience of use, and enhanced mobility will be poised to make major gains.

"This is an opportunity for manufacturers to increase portability of their medical devices for increased usage in an ambulatory setting, and in homecare, to develop and promote devices which allow self-administration of medication", noted Frost & Sullivan Research Analyst, Tanya Pullen.

Manufacturers of surgical products are also set to thrive, as a consequence of the mounting number of surgical procedures. Steady growth in surgical procedures will translate into higher volume requirements of surgical, especially single-use devices. The implementation of infection-control policies are expected to further spur the uptake of single-use surgical devices, a trend that will be underlined by their potential to contain costs through reduced patient-recovery times.

Indeed, cost containment through reducing in-patient recovery times is likely to be one of the primary areas of focus. Herein, minimally invasive surgery techniques, with their ability to provide procedural cost-efficiency, are anticipated to come to the fore. Increased deployment of minimally invasive surgery, with its promise of both medical and economic benefits, is expected to create enormous potential for equipment associated with such procedures, such as electrosurgical devices and endoscopic cameras.

Health care expenditures are currently pegged at 844,2 billion euro and are expected to increase steadily. And with many countries targeting specific areas for augmented spending, a host of growth opportunities are likely to emerge across a range of segments. For instance, German Disease Management Programmes (DMPs) are focused on providing additional funding to combat diseases such as diabetes, breast cancer, asthma, and coronary heart disease. A new United Kingdom scheme aims at enhancing the treatment and prevention of cancer, stroke, and coronary heart disease, while attempting to speed up the waiting lists for certain procedures such as cataract surgery.

However, while tremendous opportunities continue to exist, formidable challenges also loom. On a pan-European basis, escalating health care outlays have necessitated a slew of cost containment strategies. Among the major outcomes of this trend is widespread hospital consolidation with the accompanying rationalisation of hospital resources. This will have profound ramifications for suppliers of medical products.

An important corollary of cost containment measures has been the formation of purchasing groups for product procurement. These groups have contributed to significant price declines through pushing of volume discounts, and by progressively limiting the target customer base. Decreasing hospital numbers, bed numbers, and operating rooms resulting from hospital rationalisation will translate into limited volume requirements. Among the segments likely to bear the brunt are basic hospital provisions, large stationary equipment, and operating room equipment.

In an era of cost-cutting and budgetary constraints, suppliers will do well to focus on developing close relationships with hospital purchasing departments. They will also need to constantly emphasise the value of investing in innovative medical technology.

"Suppliers will need to highlight the long-term quality and financial benefits of purchasing advanced equipment such as minimally invasive surgical tools, moist wound care products, and so on, since better treatment leads to more effective use of hospital time and resources. Education of hospital purchasing departments as to the long-term economics of such investments will be vital to the maintenance of these markets", concluded Ms. Pullen.

The study on the European hospital market is available by contacting Mrs. Katja Feick of Frost & Sullivan.

Leslie Versweyveld

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