Category Archives: Healthcare

Updates from Chicago Booth

Four ways to ensure innovation continues after the crisis
Tools for innovating better and faster, even after the recovery
By Lindsey Lyman – The COVID-19 crisis has prompted inspiring acts of innovation. Companies, governments, entrepreneurs, and citizens have proved how capable humans are of innovating during times of crisis. Responding to the acute public-health pandemic has forced rapid changes in health-care-delivery models. The social-distancing mandates have prompted complete workforces to adopt a virtual work model as well as K–12 school districts and university systems nationwide to figure out how to educate students through distance learning. The slowdown of commerce has pushed small-business owners to transform their business models overnight in an attempt to stay afloat amid economic collapse.

Necessity forces companies to innovate. However, waiting for a crisis is not a sustainable innovation strategy, and certainly no one wants a crisis for the sake of innovation. The COVID-19 pandemic provides a natural experiment that allows us to examine conditions that have prompted innovation and to observe and learn how organizations have responded. The circumstances are dire and the effectiveness of many of these innovations remains unknown. Despite this, it is worth observing what is happening and learning from it. Companies should take note of these lessons and apply them to remain innovative, whether in the midst of a crisis or in a position of strength.

Extreme examples of innovation have surfaced from the COVID-19 crisis. In one well-documented example, Wuhan’s Huoshenshan Hospital, a specialty field hospital, was built in just over a week to treat the outbreak. Although this is a great testament to human ability, it does not provide a blueprint for sustainable innovation. The financial burden and other costs—among them, structural and safety concerns and suspect labor practices—do not justify building a hospital at this speed under normal circumstances.

However, other tools used to fight the COVID-19 outbreak can and should become a replicable part of corporate innovation practices. Here are four of them. more>

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We must break the cycle of panic and neglect

Health, global security and international stability are inextricably linked. And our globalised, urbanised and at the same time politically fragmented world has never been as prone to pandemics as it is today. Wolfgang Ischinger and Stefan Oschmann present five points that are critical in order to be better prepared for situations like these in the future.
By Stefan Oschmann and Wolfgang Ischinger – The number of coronavirus cases as reported on the website of Johns Hopkins University continues to skyrocket. The International Monetary Fund is preparing the world for a massive recession.

Governments around the world have mobilized incredible sums of money in order to strengthen healthcare systems in the short term and to cushion the economic consequences of the crisis in the long term. Without a doubt, health crises can pose a serious threat to all of humanity, one no less serious than the dangers of atomic weapons, terrorism or the impact of climate change.

The fact that health, security and stability are inextricably linked is not a new realization. The devastating consequences of pandemics – from the plague to the Spanish flu – are a firm part of human history.

Yet they are still being massively underestimated – despite the fact that our globalized, urbanized and at the same time politically fragmented world has never been as prone to pandemics as it is today.

At the moment, the focus is on acute crisis management. How can a lockdown be managed? When and how can a return to normalcy be responsibly permitted? And what exactly will the new normal look like?

These topics are currently being widely discussed, and rightly so. With this article, however, we want to point out that it is also necessary to plan beyond this period. We should urgently think about the following five points:

First: Overall, the global community has not succeeded in breaking the cycle of panic and neglect that characterizes the way in which it responds to pandemics. No doubt, after SARS 2002/03, significant progress was made in the areas of pandemic preparedness, in research and development as well as in vaccine development.

Countries such as China have considerably strengthened their healthcare systems. Yet unfortunately, this was not enough. At the Munich Security Conference (MSC) in 2017, Bill Gates spoke about the sad irony that the global costs of a pandemic massively eclipse the expenditure needed to successfully prevent a global pandemic.

According to Gates, the cost of ensuring adequate pandemic preparedness worldwide is estimated at US$ 3.4 billion a year, while the projected annual loss from a pandemic could run as high as US$ 570 billion.

The amounts being called up right now for global crisis management show that at the time, these estimates were a rather conservative estimate of the potential follow-on costs. One thing is clear: Pandemic preparedness is an absolute must and pays off, not only in financial terms. There is no price as high as the one we are paying right now as a global community. more>

Updates from McKinsey

How payments can adjust to the coronavirus pandemic—and help the world adapt
The challenges are immediate, with long-term implications for global, regional, and local economies—and for the payments industry itself. Here’s what to expect.
By Philip Bruno, Reet Chaudhuri, Olivier Denecker, Tobias Lundberg, and Marc Niederkorn – As the catastrophic human costs of the coronavirus come into clearer focus, so too do the consequences for people’s well-being beyond the immediate imperative to safeguard lives. Taking care of our families and friends, our neighbors and communities, our employees and coworkers comes first. For that reason, companies across industries and geographies have scrambled to establish remote-working conditions—and continue to improve them as the health crisis continues. Those that can, including most banks and financial-services companies, have taken swift action to protect both their customers and their employees.

The next focus of all the professionals involved with the transactions infrastructure must be the stability of systems, for both payments and securities. At this writing, despite the scale of the emergency measures underway, no major outages of core infrastructure have been reported. Payments systems have proved resilient and reliable, as they have in earlier crises. Payments systems and providers, which enable companies and their customers to transfer funds in return for goods and services, continue to enjoy a high level of trust from the general public.

At the same time, we all realize that the economic disruption will be profound and the short-term drop in activity for economies under lockdown will be severe. Quarterly GDP in the second quarter of 2020 could decline by as much as 35 to 40 percent—and the payments industry’s financial outlook reflects that uncertainty in the short term. But the industry’s stability will play an invaluable role in rebooting the global economy, and the potential for innovation can support functioning economies as a “new normal” emerges. Below, we observe how the payments industry can adapt now—and suggest ten fundamental changes to the payments ecosystem that will help all of us find a new normal.

How will the coronavirus crisis affect payments economics?
There is no definitive answer. Much depends on the complex interplay between economic activity, the interest-rate landscape and associated liquidity patterns, and the evolution of individual and collective behavior. Taking these factors into account, we expect revenue growth in global payments to turn negative.

Instead of growing by 6 percent, as projected by our 2019 global payments report, activity could drop by as much as 8 to 10 percent of total revenues, or a reduction of $165 billion to $210 billion—comparable to the 10 to 11 percent revenue reduction in the wake of the global financial crisis in 2008–09. more>

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Updates from ITU

UNESCO rallies international organizations, civil society and private sector partners in a broad Coalition to ensure #LearningNeverStops
By Clare O’Hagan – At a time of when 87% of the world’s student population is affected by COVID-19 school closures, UNESCO is launching a global education coalition to support countries in scaling up their best distance learning practices and reaching children and youth who are most at risk.

Over 1.5 billion learners in 165 countries are affected by COVID-19 school closures.

“Never before have we witnessed educational disruption on such a scale,” said UNESCO Director-General Audrey Azoulay. “Partnership is the only way forward. This Coalition is a call for coordinated and innovative action to unlock solutions that will not only support learners and teachers now, but through the recovery process, with a principle focus on inclusion and equity.”

Since closing schools to contain the COVID-19 pandemic, governments have been deploying distance learning solutions and grappling with the complexity of provisioning education remotely, from delivering content and supporting teachers to providing guidance to families and addressing connectivity challenges. Equity is the paramount concern because closures disproportionately hurt vulnerable and disadvantaged students who rely on schools for a range of social services, including health and nutrition.

“We must speed up the ways we share experience, and help the most vulnerable, whether or not they have internet access”, said Angelina Jolie, UN High Commission for Refugees Special Envoy, who partnered with UNESCO in the establishment of the Coalition. more>

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A green reboot after the pandemic

In addition to threatening millions of lives, the Covid-19 pandemic has demonstrated human societies are capable of transforming themselves more or less overnight—there’s no better time.
By Sandrine Dixson-Declève, Hunter Lovins, Hans Joachim Schellnhuber and Kate Raworth – The Covid-19 coronavirus has forced entire countries into lockdown mode, terrified citizens around the world and triggered a financial-market meltdown. The pandemic demands a forceful, immediate response. But in managing the crisis, governments also must look to the long term. One prominent policy blueprint with a deep time horizon is the European Commission’s European Green Deal, which offers several ways to support the communities and businesses most at risk from the current crisis.

Covid-19 reflects a broader trend: more planetary crises are coming. If we muddle through each new crisis while maintaining the same economic model that got us here, future shocks will eventually exceed the capacity of governments, financial institutions and corporate crisis managers to respond. Indeed, the ‘coronacrisis’ has already done so.

The Club of Rome issued a similar warning in its famous 1972 report, The Limits to Growth, and again in Beyond the Limits, a 1992 book by the lead author of that earlier report, Donella Meadows. As Meadows warned back then, humanity’s future will be defined not by a single emergency but by many separate yet related crises stemming from our failure to live sustainably. By using the Earth’s resources faster than they can be restored, and by releasing wastes and pollutants faster than they can be absorbed, we have long been setting ourselves up for disaster.

On one planet, all species, countries and geopolitical issues are ultimately interconnected. We are witnessing how the outbreak of a novel coronavirus in China can wreak havoc on the entire world. Like Covid-19, climate change, biodiversity loss and financial collapses do not observe national or even physical borders. These problems can be managed only through collective action that starts long before they become full-blown crises.

The coronavirus pandemic is a wake-up call to stop exceeding the planet’s limits. more>

Updates from McKinsey

Coronavirus: Five strategies for industrial and automotive companies
To rebound from the coronavirus pandemic, industrials must undertake a journey that begins with resolve and ends with fundamental reform.
By Joe Dertouzos, Heike Freund, Michael Mischkot, Asutosh Padhi, and Andreas Tschiesner – We are still in the early stages of a global health crisis resulting from the coronavirus pandemic. Protecting lives is the first priority, but we must also protect our livelihoods. For automotive and industrial companies, surviving and emerging stronger at the far end of this crisis will require thinking beyond the next fiscal quarter. Success in the long run will require a journey across five stages: Resolve, Resilience, Return, Reimagination, and Reform.

The first stage, Resolve, involves determining the scale, pace, and depth of action required. To do so, companies in advanced industries must take the following steps:

  • establishing a nerve center to steer the organization, serve as the information hub, manage risk and responses, and align all stakeholders
  • protecting employees by making their health the paramount concern and adjusting production as needed
  • screening and safeguarding the supply chain by understanding risks and taking action to address disruption
  • adapting marketing and sales by identifying and mitigating the risks of declining sales while meeting critical customer needs
  • maintaining financial health by improving liquidity, reducing costs, and establishing a spend control tower

During the Resolve phase, companies must also make difficult choices, such as suspending production facilities, suspending discretionary spending, and furloughing workers. These decisions will require a comprehensive understanding of the situation, including data-driven scenarios for market evolution.

Consider the automotive industry. It is difficult to predict how the pandemic will affect sales in the European Union and the United States, two regions where coronavirus penetration is still emerging. We draw insights about potential developments by looking at the evolution of auto sales in China over the first quarter, since this country has already “bent the curve” and begun to recover from the coronavirus.

As industrials experience virus-related shutdowns and economic pressures, they should move quickly to address near-term cash management challenges and broader resiliency issues. more>

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Updates from Chicago Booth

Don’t fall for the false trade-offs of COVID-19 policy
By Neale Mahoney – The American economy—like those of many countries—is reeling. As COVID-19 forces businesses to shut their doors and consumers to retreat within their homes, the stock market has plummeted and unemployment-insurance claims have skyrocketed. Many people are predicting that we will soon experience a severe recession, in the United States and around the world.

So it may come as no surprise that in this gloomy environment, there are growing concerns that the economic costs of mitigating the spread of COVID-19—through social distancing and/or isolation, the approaches favored by many health experts—are worse than the health costs we would incur by relaxing such measures. As US president Donald Trump put it on Twitter, “We cannot let the cure be worse than the problem itself.”

Trade-offs are central to economics. Many of our canonical models are designed to illustrate them, and economists are quick to point out trade-offs, or “unintended consequences,” when they are ignored by policy makers.

Because of these trade-offs, reasonable people with a shared goal can disagree, simply because they have differing views of, for instance, the elasticity of labor supply (how workers respond to changes in after-tax wages), the degree of moral hazard (how people respond to the out-of-pocket price of health care), and so on.

However, when it comes to COVID-19, the conventional economic trade-offs are greatly overstated. Indeed, I’m worried that the language of trade-offs is being co-opted to push for shareholder bailouts and corporate cronyism. Some of the “trade-offs” being weighed in discussions of policy are not trade-offs at all. We economists should get ahead of this and call it what it is: nonsense. more>

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Updates from McKinsey

We’re not going back to the ‘normal’ we had before coronavirus
Our global managing partner Kevin Sneader joined Andrew Ross Sorkin on CNBC’s “Squawk Box” Wednesday, March 25, to talk live about the business implications of the coronavirus pandemic. The full interview is available now at CNBC.com. You can read all of our material on the crisis at our coronavirus insights page.
By Kevin Sneader – One thing is clear from all the conversations I’ve had: nothing is going to be the same. This is a new normal, a different way of operating.

I think for our clients, they’re worried about their employees, their customers, and cash—in that order. And they are worried about cash. Even in the health care sector, there are providers who are not getting paid right now, and they’re worried about cash flow just as players in several other sectors are.

Another reality they’re all dealing with is that people keep sending them scenarios as to how this could play out. The message we’re hearing is that the scenarios are helpful, but leaders are wondering what’s going to be true across all these scenarios. Because if it’s not going back to the way it was before, what’s the next normal? What’s the way in which we’re going to have to operate?

The reality is that consumer behavior is changing fundamentally, and so much else is changing, and the question is, “will it go back?” I think the answer in many cases is “no.”

If you think about a lot of what’s happened in the last few years, some of it’s going to be reinforced. The shift [to working] online has now been given a boost, and it’s hard to see that being taken back to where it was before.

At the same time, I think one of the biggest shifts will be the way that products reach us. For many years, we and others have been focused on efficiency: how efficiently can I run my supply chain? I think now there’s going to be a lot of conversation about, how resilient is my supply chain? more>

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Updates from McKinsey

COVID-19: Implications for business
By Matt Craven, Linda Liu, Mihir Mysore, and Matt Wilson – The coronavirus outbreak is first and foremost a human tragedy, affecting hundreds of thousands of people. It is also having a growing impact on the global economy.

At the time of writing, there have been more than 160,000 confirmed cases of COVID-19 and more than 6,000 deaths from the disease. Older people, especially, are at risk. More than 140 countries and territories have reported cases; more than 80 have confirmed local transmission. Even as the number of new cases in China is falling (to less than 20, on some days), it is increasing exponentially in Italy (doubling approximately every four days). China’s share of new cases has dropped from more than 90 percent a month ago to less than 1 percent today.

Our perspective is based on our analysis of past emergencies and our industry expertise. It is only one view, however. Others could review the same facts and emerge with a different view.

Many countries now face the need to bring widespread community transmission of coronavirus under control. While every country’s response is unique, there are three archetypes emerging—two successful and one not—that offer valuable lessons. We present these archetypes while acknowledging that there is much still to be learned about local transmission dynamics and that other outcomes are possible:

  • Extraordinary measures to limit spread. After the devastating impact of COVID-19 became evident in the Hubei province, China imposed unprecedented measures—building hospitals in ten days, instituting a “lockdown” for almost 60 million people and significant restrictions for hundreds of millions of others, and using broad-based surveillance to ensure compliance—in an attempt to combat the spread. These measures have been successful in rapidly reducing transmission of the virus, even as the economy has been restarting.
  • Gradual control through effective use of public-health best practices. South Korea experienced rapid case-count growth in the first two weeks of its outbreak, from about 100 total cases on February 19 to more than 800 new cases on February 29. Since then, the number of new cases has dropped steadily, though not as steeply as in China. This was achieved through rigorous implementation of classic public-health tools, often integrating technology.
  • Unsuccessful initial control, leading to overwhelmed health systems. In some outbreaks where case growth has not been contained, hospital capacity has been overwhelmed. The disproportionate impact on healthcare workers and lack of flexibility in the system create a vicious cycle that makes it harder to bring the epidemic under control.

Based on new information that emerged last week, we have significantly updated and simplified our earlier scenarios. more>

Simple steps to reduce the odds of a global catastrophe

By Warwick J. McKibbin and David Levine – The novel coronavirus COVID-19 may become a footnote in history – a disaster narrowly averted. It could also become a global pandemic similar to some of the worst pandemics of the twentieth century.

For example, assume the COVID-19 is as easy to spread and as dangerous as the 1957 Asian flu. Based on the epidemiological estimates of mortality and morbidity rates from that experience, our best estimate from a 2006 study on pandemics was that such a virus might kill more than 14 million people and shrink global GDP by more than $500 billion  (McKibbin and Alexandro Sidorenko. Global macroeconomic consequences of pandemic influenza. Australian National University, 2006). These estimates are far higher than the costs were in 1957 because our world is increasingly connected and urban. Preliminary results currently being updated  in 2020 suggest even higher numbers for worse case COVID-19.

We hope that scientists can rapidly develop a vaccine. Unfortunately, there is much we do not yet know about this new virus.

At the same time, we do know the virus mostly spreads when people sneeze or cough. The germs then spread when people inhale infected droplets. The germs also land on surfaces. People who touch their own mucus or an infected surface then spread the virus on their hands. For most respiratory infections, perhaps half the cases spread from people’s hands.

Fortunately, even without a vaccine, we already know how to slow an epidemic of respiratory infections.

If everyone coughed or sneezed into their elbow or a tissue (not into the air or on their hands), the germs would not travel very far. And if everyone washed hands with soap before preparing food or eating, that route of transmission would end. more>