Ostwald presentation at 24 BSPC

The Economic Footprint of the Healthcare Sectorin the Baltic Sea RegionFacts and Figures about the Healthcare Sector in Germany:Results of the National Health Account II Project in Germany commissioned by theFederal Ministry for Economic Affairs and EnergyThe 24th Baltic Sea Parliamentary ConferenceThird Session: Health & Economy –Paving the Way for Innovation in Social- and HealthcareDr. Dennis A. Ostwald | Benno Legler Rostock, 31 August 2015AgendaThe Economic Footprint of the healthcare sector in the Baltic Sea RegionPreliminary remarks and approachExemplary results of the Economic FootprintConclusion and future outlook© WifOR 2015 The Economic Footprints of the healthcare sector in the Baltic Sea Region 2 | 15Preliminary remarks – new understanding of healthcareWifOR forsters the paradigm shift in the worldwide healthcare sectorOLD UNDERSTANDING UNDERSTANDINGNEWPart of healthcare Is the health economyNew financing methods, second health market;Instead of mainly public financingnew methods of paying providers (P4P)Less input orientation Better quality, more outcome orientationGrowing sectors, increasing work force, newInstead of health care as cost factorcareer opportunitiesInvestment in health to promote growth andInstead of healthcare consumptionproductivityInstead of separate silos, e.g. the statutory Health in all areas of lifehealth insurance and lifelong; less fragmentationSource: cf. Neumann, Henke, Schneider (2010).© WifOR 2015 The Economic Footprints of the healthcare sector in the Baltic Sea Region 3 | 15Preliminary remarks – the Baltic Sea Region (BSR)Did you know that ...85MInhabitants17%of EU population1.5 T.EURtotal GDP4.5%annual growth rateof GDP per capita?But with all the increasing wealth,do you know the impact of the health economy?Source: EUSBSR, Statista (2015).© WifOR 2015 The Economic Footprints of the healthcare sector in the Baltic Sea Region 4 | 15Approach: the health satellite account (HSA)The success story in Germany as a blueprint for Europe?» Creation of a Health Satellite Account (HSA), Development of aNational Health Account (NHA), Productivity Analysis» Annual updates of the NHA and publication of results in aspecial brochure on „Facts and Figures about the Germanhealthcare sector”© WifOR 2015 The Economic Footprints of the healthcare sector in the Baltic Sea Region 5 | 15Approach: the benefits of the Economic FootprintThe claim is......to broaden the scope of value-based considerations of thehealth economy by revealing new aspects of your economic impact....to strengthen arguments for the health economy by applyingofficial statistical data and recognized methodologies....to position the health economy with approved methodology asthe biggest branch in the world....to deliver value to patients, supply chain partners, politicians,shareholders and the society.© WifOR 2015 The Economic Footprints of the healthcare sector in the Baltic Sea Region 6 | 15Approach: value added as the key indicator in the HSAMisleading interpretation of sales as an indicator for health policyPurchase Production SalesIntermediate Employees: 20SalesConsumptionGross value added (GVA): 1,000,000 EURCar dealer 10.0M EUR9.0M EURLabor productivitySales per employee: 500,000 EURGVA per employee: 50,000 EURLabor productivitySales per employee: 100,000 EURGVA per employee: 80,000 EURIntermediateEmployees: 100 SalesConsumptionGross value added : 8,000,000 EUR 10.0M EUR2.0M EUR Hospitalgross value added performanceOnly allows statements about the and thus theeconomic importanceof sectors to the national or European economy.Source: own illustration.© WifOR 2015 The Economic Footprints of the healthcare sector in the Baltic Sea Region 7 | 15Approach: the Economic Footprint of the health economyMethodological Approach: Illustration of the formation of spillover effectsDirect EffectsDirect economic impact of the health economyDemand of Intermediate ConsumptionIndirect EffectsResult of contracts to suppliersExpenditure of IncomeInduced EffectsCaused by the re-spending of generated incomeEconomic Footprint of the healthcare sectorDirect Effects Indirect Effects Induced EffectsSource: own illustration.© WifOR 2015 The Economic Footprints of the healthcare sector in the Baltic Sea Region 8 | 15Exemplary Results of the Economic FootprintThe economical importance of the German health economy is significant...14.8 %Share of the overallGerman labor market€ € € € € € € € € € € € € € € € € € € €€ € € € €1 € 1€ €. 1€ € % € € € € € € € € € €€ € € € € € € € € € € € € € € € € € € €€ € € € €S €h a€r e€ o €f t€h e€ o€v e€r a€l l€ e c€o €no €m €ic €Gross Value Added€ € € € € € € € € € € € € € € € € € € €7.4 %Share of the overall GermanexportsSource: NHA (commissioned by the German Federal Ministry for Economic Affairs and Energy) (2015).© WifOR 2015 The Economic Footprints of the healthcare sector in the Baltic Sea Region 9 | 15Exemplary Results of the Economic FootprintGross Domestic Production and Labor Market Effects» About 11% of the German GDP arises 279 Bn.EURin the healthcare sectorGross Value Added, 2014» Continuous growth of value added for15 years now» Increase of more than 100 Bn. € since2000 11.1 %» The healthcare sector is a stable and Share of overall economy, 2014increasing driver of growth2000 2002 2004 2006 2008 2010 2012 20146.2M » 6.2M employees in the healthcare sectorWorking Population, 2014» One million of new employees since2008» One in seven employees are working in14.8 %the healthcare sectorShare of overall economy, 2014» Healthcare sector supports thesuccess of the German labor market2000 2002 2004 2006 2008 2010 2012 2014performance© WifOR 2015 The Economic Footprints of the healthcare sector in the Baltic Sea Region 10 | 15Exemplary Results of the Economic FootprintThe Economic Footprint of the healthcare sector» Indirect and induced additional 4M2.0Memployees are being employed2.0M» Three jobs in the sector support two9.85.8Madditional employees in the overall Meconomy» 10M health related employees in [Employees | 2010]GermanyDirect Indirect Induced OverallEffect Effect Effect» The healthcare sector stimulates theGerman labor market across sectors» Spill over effects of Gross Value Added[GDP in Bn. € | 2010]Real estate amount to ca. 224.4 Bn. €and housing18%» One Euro of Gross Value Added leads toadditional 0.90 € in the overall economySpill over effects224.4 Bn. €Trade, transportation,» Profiteers: i.e. “Real estate and housing”,hospitalityHealthcare 17% “Trade, transportation, hospitality”,13%“Manufacturing and construction”Manufacturing Corporate services » Healthcare sector as economicand construction 15% initiator14%© WifOR 2015 The Economic Footprints of the healthcare sector in the Baltic Sea Region 11 | 15The industrial part of the healthcare sector isof great importance for the German health economy...However...the industrial healthcare hector is contributinghugely to this accomplishment...As a reminder...the NHAstrikingly shows...8.9%14.8 %Share of the overall Gross Value AddedShare of the overallof the healthcare sectorGerman labor market4.2%11.1 %Share of the overall employeesShare of the overall economicof the healthcare sectorGross Value Added7.4 % 80.1%Share of the overall Germanexports Share of the overall exportsof the healthcare sector...the importance of thehealthcare sector as a driver forgrowth and employment...since it is the leading driver for growth and development ofthe overall healthcare sectorSource: NHA (2015). Industrial HCS: Pharmaceuticals, Medical Technology; exclusive trade© WifOR 2015 The Economic Footprints of the healthcare sector in the Baltic Sea Region 12 | 15ConclusionsThe health economy as an important part of the economy279 Bn. of value added, which corresponds toEUR 11,1 percent of the german GDP€The Industrial HealthcareSector has8.9 % 0.9EURshare of the overallOne Euro of Gross ValueGross Value AddedAdded producesof the health care €additional 0,90 € in thesector The Economic Footprint overall economyof theGerman healh economy6.27,4 % MEmployees work in the healthShare of the overall economy, 14.8 percent of theGerman Exports overall employees in Germany9.8 health related employees (direct, indirect andMinduced) are engaged in GermanySource: NHA (2015).© WifOR 2015 The Economic Footprints of the healthcare sector in the Baltic Sea Region 13 | 15ConclusionsFirst estimations concerning the Economic Footprint of the BSR...Gross Value Added of BSRhealthcare secor approx.260 Bn.EURThis corresponds to the total GDP ofDenmarkTotal employment in theBSR healthcare secor7MillionThis corresponds approximately to the totalemployement in Sweden and FinlandNext step...?to institutionalize the Economic Footprint of thehealthcare sector in the whole Baltic Sea Region© WifOR 2015 The Economic Footprints of the healthcare sector in the Baltic Sea Region 14 | 15Future OutlookThe next comprehensive stepsStrengthening the health economy in the Baltic Sea Region1Regular inclusion of the Economic Footprint in the health reporting2Regional health economy (health in regions) is gaining in importance3The contribution of the digital health economy will be determined4The social value (Benefit Footprint) of the healthcare sector:5More wealth and better health as a comprehensive goal© WifOR 2015 The Economic Footprints of the healthcare sector in the Baltic Sea Region 15 | 15Dr. Dennis A. Ostwald WifORChief Executive OfficerRheinstraße 22Benno Legler64283 DarmstadtResearch AssociateGermanyPhone +49 6151 50155-0Telefax +49 6151 50155-29E-Mail kontakt@wifor.deWeb www.wifor.de