The Healthcare Sector In Developed Countries

Healthcare is involved, directly or indirectly, with the provision of health services to individuals. These services can occur in a variety of work settings, including hospitals, clinics, dental offices, out-patient surgery centers, birthing centers, emergency medical care, home healthcare, and nursing homes. (OSHA, 2018)

In most developed countries, the healthcare sector encompasses anything from 8 percent to over 15 per cent of the economy, making it one of the largest industries in any state – bigger generally than education, agriculture, IT, tourism or telecommunications.

In most countries, around the world one worker in ten is employed in the healthcare sector – as doctors, nurses, scientists, therapists, cleaners, cooks, engineers, administrators, clerks, finance controllers – and, of course, as managers. This means that almost everyone has a relative or knows someone who works in healthcare, and the healthcare workforce can be a politically powerful group with considerable influence over public opinion. Almost everyone uses health services, or has members of their family or friends who are significant healthcare users, and everyone has a view to express about their local healthcare system. In many countries, the history of the healthcare system is intertwined with the development of communities and social structures.

Religious groups, charities, voluntary organizations, trade unions and local municipalities have all played important roles in building the healthcare organizations and systems we have today, and people in those communities often feel connected in a visceral manner to ‘their’ hospitals, community clinics, ambulance service, and other parts of the healthcare system. They raise funds to support new facilities or equipment, and volunteer to work in a wide range of roles which augment or support the employed healthcare workforce. That connection with the community also comes to the fore when anyone – especially government – suggests changing or reconfiguring healthcare provision. Proposals to close much loved community hospitals, reorganize district hospital services, or change maternity services, are often professionally driven – by a laudable policy imperative to make health services more effective, safe and efficient. But when evidence of clinical effectiveness and technocratic appraisals of service options collide with popular sentiment and public opinion, what matters is usually not ‘what works’ but what people want.

For many local and national politicians, health policy and the healthcare system offer not only opportunities to shine in the eyes of the electorate when things are going well, but also threats to future electoral success when there are problems with healthcare funding or service provision and people look for someone to hold to account. Constituents bring to politicians in their local offices concerns about healthcare services, and politicians are keenly aware of the attitudes and beliefs of the public about their local health service. While they will happily gain political benefit from the opening of a new facility, or the expansion of clinical services, they will equally happily secure benefit by criticizing the plans of ‘faceless bureaucrats’ in the local healthcare organization for unpopular changes in healthcare services, and argue that there are too many managers and pen-pushers.

Finally, for the press, TV, radio and on-line media, both locally and nationally, the healthcare system is an endless source of news stories, debates and current affairs topics. From patient safety to MRSA and pandemic flu, from dangerous doctors to hospital closures, from waiting lists to celebrity illnesses, the healthcare system is news. Big healthcare stories can command pages of news coverage in national dailies and repeated presentation on TV news bulletins, while at a local level it would be rare to find a newspaper which did not have some content about hospitals, clinics or other healthcare services in every issue. Healthcare organizations can use the level of media interest to their advantage, to raise public awareness of health issues and communicate with the community, but they can also find themselves on the receiving end of intense and hostile media scrutiny when things go wrong. (Walshe, 2011)

Overview about healthcare sector:

The healthcare sector consists of companies that provide medical services, manufacture medical equipment or drugs, provide medical insurance, or otherwise facilitate the provision of healthcare to patients.

The healthcare sector is one of the largest and most complex in the U.S. economy, accounting for close to a fifth of overall gross domestic product (GDP), according to the OECD. Some of the highest-quality care in the world can be found in the U.S., but in terms of the populations overall health the U.S. lags other wealthy, developed countries. Life expectancy is 78.8 years, according to the OECD, below the club's average of 80.6 (the OECD's 35 members are mostly rich, industrialized countries in Europe and North America). (Investopedia, LLC, 2018)

Industries within the healthcare sector:

The healthcare sector contains a diverse array of industries, with activities ranging from research to manufacturing to facilities management.

Drugs: Drug manufacturers can further be broken down into biotechnology firms, major pharmaceuticals firms, and makers of generic drugs. The biotech industry consists of companies that engage in research and development to create new drugs, devices and treatment methods. Many of these companies are small and lack dependable sources of revenue. Their market value may depend entirely on the expectation that a drug or treatment will gain regulatory approval, and FDA decisions or rulings in patent cases can lead to sharp, double-digit swings in share prices. Examples of (larger) biotech firms include Gilead Sciences Inc. (GILD) and Celgene Corp. (GELG). Major pharmaceuticals firms also engage in research and development, but tend to focus more on manufacturing and marketing an existing portfolio of drugs than the typical biotech firm. These companies tend to have more dependable streams of revenue and a more diversified "pipeline" of drugs in the research and development stages, making them less dependent on make-or-break drug trials and their shares less volatile. Examples of major pharmaceutical firms include Novartis AG (NVS) and GlaxoSmithKline plc (GSK). Some pharmaceutical firms specialize in generic drugs, which are identical to name-brand drugs but no longer enjoy patent protection. As a result, there is often competition to manufacture identical drugs, leading to lower prices and thinner profit margins. An example of a generic drugs firm is Teva Pharmaceutical Industries Ltd. (TEVA). (Investopedia, LLC, 2018)

Medical Equipment: Medical equipment makers range from firms that manufacture standard, familiar products – scalpels, forceps, bandages, gloves – to those that conduct cutting-edge research and produce expensive, high-tech equipment such as MRI machines and surgical robots. Medtronic plc (MDT) is an example of a medical equipment maker. (Investopedia, LLC, 2018)

Managed Healthcare: Managed healthcare companies provide health insurance policies. The "Big Five" firms that dominate the industry are UnitedHealth Group Inc. (UNH), Anthem Inc. (ANTM), Aetna Inc. (AET), Humana Inc. (HUM) and Cigna Corp. (CI). (Investopedia, LLC, 2018)

Healthcare FacilitiesHealth care facilities firms operate hospitals, clinics, labs, psychiatric facilities and nursing homes. Examples include Laboratory Corp. of America Holdings (LH), which operates facilities that perform blood tests and other analysis; and HCA Healthcare Inc. (HCA), which operates hospitals and other healthcare facilities in the U.S. and UK. (Investopedia, LLC, 2018)

Regulatory bodies involved:

Managing a public hospital is a complex and challenging undertaking, with involvement from various levels of government, and public and private sectors.

The devolved governance model for public hospitals is designed to allow decisions to be made that are most appropriate and effective at a local community level. It recognises that an approach to service delivery in one public hospital—with a unique combination of patients and service demand, culture and workforce—may not be the most effective solution in a different public hospital.