Why do governments around the world think of healthcare as a liability? And how can they be convinced that healthcare systems are both priceless assets for business and the common good? Prof. Edward Yagi, Nanzan University Graduate School of Business Administration, Keio Business School alumnus, explores.

Healthcare is an asset – not a liability by Edward Yagi. Edited by Tom Gamble.

The preamble to the Constitution of the World Health Organization, adopted by the International Health Conference in New York in June 1946 states: “Health is a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity.” As an indication of the strength of this definition, it has never been amended.

Since that time, however, the world’s population has tripled to 7.2 billion people. The United Nations reported in April 2010 that comparing the periods 1950-1955 and 2005-2010, global life expectancy rose from 47 to 68, and the proportion of deaths at age 60 or over – when healthcare costs are at their highest – rose from 26 percent to 54 percent.

As the ferocious debate currently raging in the United States vividly demonstrates, systems designed in the second half of the 20^th century are incompatible with 21^st century needs, expectations, and realities – socially, technologically, and financially. As noted in the Council on Business & Society Tokyo forum on Health and healthcare, Japan can no longer be considered an “ageing society:” With more than one person in four over the age of 65, Japan is a prime example of an “aged society” where existing models of healthcare are incomplete, obsolete, and unsustainable. 

The conclusions of this article, directly inspired by the Council on Business & Society’s Forum in Tokyo, can be captured in the below two images and in just a few words:

Healthcare as an asset – not a liability

The existing paradigm considers healthcare a liability. This model has no upside. Healthcare is the sum of negative inputs, including insurance costs, treatment costs, and productivity lost from physical and mental illness:

The new model views healthcare as an asset. Healthcare is a collection of positive outcomes, including improved productivity and competitiveness, new and converging IT and medical technologies, and ethically enlightened policies:

Healthcare is an Asset: A question of questions

The question is not: “Do healthcare systems need reform?” The question is: “How should everyone constantly re-examine health concepts and implement systems to create the best outcomes in sustainable ways?”

Healthcare may be the ultimate interdisciplinary field of human study. It cannot be viewed as only a business, a public service, a technology field, an academic discipline, an ethics issue, a moral duty, a management study, or a matter of every person’s most private life. It is all of these – simultaneously. Excellent solutions will not originate from companies, governments, universities, or not-for-profit organizations. They will only originate from collaboration between all of them.

Some healthcare systems are arguably better than others, but all existing models are categorically inadequate for most present and all conceivable future purposes for the following reasons:

• Today’s policies are reactive. Decision-makers who are indifferent or constrained until something goes wrong are always, by definition, operating “behind the power curve.”
• Today’s processes are input driven. Results are determined by resources perceived to be available rather than clear-headed visions of what desired outcomes ought to be.
• Today’s systems are unsustainable. They originated when populations were smaller, lifespans were shorter, information levels were lower, expectations were fewer, and economic growth was viewed as infinitely sustainable.

The first indications of “Global Best Practices” are already beginning to form

Future solutions in healthcare will incorporate the fact that tomorrow’s policies will be pro-active. Instead of crisis management, treatment, secrecy, and patient behavior reform, future policies will emphasize anticipation, prevention, information, and education.

In addition, tomorrow’s processes will be output driven. Nations will create, and managers will be held accountable to implement, a vision of healthy individuals, healthy companies, and healthy societies and public and private capital, information technology, medical technology, managerial ingenuity, a strong sense of ethical responsibility, and all other available resources will be aligned to realize that vision.

Tomorrow’s systems will be sustainable. They will be evidenced-based and will not rely on wishful thinking or procrastination. Systems will be focused on future outcomes rather than current budgets, and incorporate the ability to make mid-course corrections and consider worst-case scenarios. Successful new healthcare paradigms will and must strike a balance between Global Best Practices – which will be highly consistent – and local conditions which will change over time.

The world’s cultural, economic, social, political, and religious diversity cannot be ignored

There will never be a single “one size fits all” model. Healthcare is a moving target. While some strategies will meet the test of time, tactics must be flexible enough for both existing populations as well as needs decades into the future. Many health issues will always be immediate and recognize no artificially imposed boundaries, so the world has no choice but to adapt some form of strategy for the moment – and accept some degree of global cooperation.

As some countries, regions, or areas develop excellent programs, there arise questions and concerns about population transfer. Consumers in one country may travel to another country for the purpose of obtaining better healthcare, in many cases without having invested (e.g., by paying taxes) previously in the country where they are receiving the actual treatment. In larger countries, citizens may even travel domestically for the same purpose.

This means that all countries will have to eventually consider transnational or even global programs. Globalization is likely to ultimately require that all countries adopt some system of universal standards for dealing with business travelers, casual tourism, medical tourism, international medical evacuations, refugees, and the large-scale population transfers that some experts predict is inevitable given global climate change projections.

Business schools are perfectly positioned to take important – and even leading – roles in crafting healthcare assets

Business schools are politically neutral, intellectually independent, and results-oriented. They are also unique in their ability to gather theorists, practical academicians, business leaders, bureaucrats, politicians, and professional policy experts in one room. Business schools educate future leaders to whom the results of critical analysis can be instantly relayed for consideration and implementation in the real world.

New healthcare solutions have implications that go far beyond only healthcare

• Healthcare is a universal human need
• It is interdisciplinary and global
• It demands sustainability and cooperation
• It requires commitment to high ethical principles: altruism, fairness, trust, confidentiality, honesty, and integrity
• It requires adherence to critical thinking, evidence-based decision-making, and rigorous verification.

In other words, excellent healthcare solutions have the potential to provide a template for solving or managing other problems. Observable, measurable, real-world improvements in healthcare, especially across borders, can be a model and source of inspiration for improvement in other world issues, such as good governance, social inequality, hunger, natural disasters, and even political conflict. The Council on Business & Society calls on business, academic, and political leaders to work with us, and with others, to help make this vision become reality.

Useful links:

• Read a related article: A take on the healthcare industry in Brazil
• Download the white paper on Health & Healthcare at the crossroads of business and society
• Watch the video interview of Prof. Edward Yagi.

Learn more about the Council on Business & Society

The Council on Business & Society (The CoBS), visionary in its conception and purpose, was created in 2011, and is dedicated to promoting responsible leadership and tackling issues at the crossroads of business and society including sustainability, diversity, ethical leadership and the place responsible business has to play in contributing to the common good.  

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Member schools are all “Triple Crown” accredited AACSB, EQUIS and AMBA and leaders in their respective countries.

• ESSEC Business School, France-Singapore-Morocco
• FGV-EAESP, Brazil
• School of Management Fudan University, China
• IE Business School, Spain
• Keio Business School, Japan
• Stellenbosch Business School, South Africa
• Trinity Business School, Trinity College Dublin, Ireland
• Warwick Business School, United Kingdom.