07 Sep, 2022 Inflation, geopolitical events continue to challenge post-COVID-19 recovery of healthcare systems, observes GlobalDataPosted in Pharma
Increasing inflation and the cost of living crisis, fueled by the COVID-19 pandemic and geopolitical events such as the ongoing Ukraine conflict, continue to challenge the pharmaceutical supply chains and the healthcare revenue cycle, observes GlobalData, a leading data and analytics company.
A poll by GlobalData found that 31% of people believe that supply chains in the healthcare industry have been most impacted by inflation and spiraling costs, followed by workforce issues (21%) and healthcare revenue cycle (17%). These issues are expected to slow down the healthcare services’ post-COVID recovery.
Spiraling inflation levels are impacting nearly every part of global supply chains and the healthcare sector is not immune to this. The rising costs of energy, raw materials, supplies and equipment along with workforce shortages are putting pressure on the healthcare sector at unprecedented levels.
Urte Jakimaviciute, Senior Director of Market Research at GlobalData, comments: “Even before COVID-19, healthcare systems were often criticized for not being resilient, cost effective, efficient and for lacking strategy. COVID-19 thrust the healthcare sector into the spotlight by forcing healthcare systems to rapidly respond and deal with an increasing number of patients affected by the disease, as well as with the backlogs and delays in non-emergency procedures and care.
“Most of the healthcare systems were promised significant financial resources to clear these backlogs. For example, the UK introduced Social Care Levy in April 2022 to raise billions to alleviate those backlogs and reform routine services. However, increasing inflation levels will ultimately mean less funds for the healthcare industry.”
According to the data presented by the Office of National Statistics, spending on healthcare totaled £257.6 billion in 2020 in the UK compared to £225.2 billion in 2019. The total current healthcare expenditure in 2021 is estimated at £277 billion. In the US, national healthcare expenditure was $3.8 trillion in 2019 and $4.1 trillion in 2020. For 2021, the Centers for Medicare & Medicaid Services projects the number to be close to $4.3 trillion.
Jakimaviciute adds: “Even though several governments, including the UK and the US, have increased healthcare spending, healthcare systems will still struggle to meet their targets due to staff shortages, rising material prices and increasing operational costs.”