(Dignitaries), Ladies and Gentlemen, It is a real honor for me to address such a distinguished audience from inside and outside Vietnam. This high-level conference confirms the essential importance of healthcare in our present-day society, both in emerging and in developed economies. You all know that the future of healthcare is one of the most pressing global issues of our time. I am particularly happy to speak here in Hanoi. As a preferred partner to Vamed, Philips is supporting the modernization of Vietnamese hospitals by supplying equipment to hospitals across the country and to the Vietnam Heart Institute. Several new modernization projects are in the pipeline; we are proud to take part in the further development of Vietnam’s healthcare infrastructure! I don’t need to tell you that the future of healthcare is one of the most pressing global issues of our time. You know we face tough challenges. However, as experts and leaders in this industry it is our collective responsibility to ensure that we improve health standards dramatically, that we bring hope to millions and millions of people who nowadays despair. Economic progress in several countries globally hasn't eased the strain on the generally overburdened, underfunded healthcare system. Nearly all of the countries in ASEAN have high-end health services, most of which offer world-class care but these remain far beyond the reach of the vast majority of the population. Millions of people still suffer from diseases or ailments that simply should not exist anywhere on this planet. In the past few years, diseases such as dengue fever, viral hepatitis, tuberculosis and malaria have seen resurgence; on the other hand chronic diseases are raising rapidly - cardiovascular diseases, cancer, diabetes. The simple fact remains that as stakeholders in the healthcare industry we need to align and to act! Our goal is clear. In the 21st century, universal quality healthcare has to be a basic human right. I cannot accept that millions of people die every year, simply because their access to healthcare is blocked. It’s totally unacceptable to short change a system that will save lives. There are no quick-fix solutions here; we need to be prepared to spend on health. Together, we have to double our efforts to provide decent healthcare to everybody on this planet, be it a young girl suffering from tuberculosis in Ho Chi Minh City or an old man with prostrate cancer in New York. Of course, problems in healthcare are not exactly the same everywhere. The challenges are different from one country to another. But we can see some basic global trends that determine our current and future tasks. Let’s have a look at these major trends. First of all, we have to cope with the fact that our global population is growing and aging. This trend of aging is well-known in developed countries, from Germany to Japan. But it is also starting to affect emerging economies here in Asia. To give you an example: by the year 2050, the median age in Thailand will have risen to 50. Vietnam is no exception. Average life expectancy in this country has grown from 64.8 in 1990 to 70.9 in 2006. In the same period, the annual number of births per one thousand inhabitants came down from 30 to 16.6 . These rapid changes are bound to change the composition of the Vietnamese population dramatically. In 2004, 29% of people in Vietnam where younger than 15 years, whereas only 9% was older than 60. Those figures will change radically as a result of changes in life expectancy and birth rate. The global growth and aging of the population is already resulting in a steady, worldwide increase in the demand for healthcare. A second trend is putting even more pressure on our healthcare systems. Due to changing lifestyles and diets, chronic diseases are rising rapidly. Worldwide, many more people now die of chronic diseases – cardiovascular diseases, cancer, diabetes – than of infectious diseases such as malaria, tuberculosis and HIV Aids, with Africa being the only exception. This is a human tragedy and financial challenge, since the management of chronic diseases is very expensive. More than half of all deaths in Vietnam, 53% to be exact are due to cardiovascular diseases, cancer and respiratory diseases. To put it bluntly: Western diseases are rapidly migrating to the East. Due to these two trends, healthcare expenditure is growing all over the world. According to some estimates, healthcare will make up 15% of global GDP by the year 2015, that’s only seven years from now! Here in Vietnam, the healthcare expenditure per capita is still relatively low, but it is increasing very rapidly, from 17.8 dollar in 1998 to 32.2 dollar in 2005. A third global trend: from New York to Hanoi and from London to Manila, we are facing a growing deficit of healthcare professionals. There are simply not enough nurses and doctors to cope with the growing demand for medical attention and the problem is getting worse. These global trends demand quick action. The need to act is even more pressing in Asia and more specifically in the ASEAN region, where we face a number of extra challenges. In this region, the efficient delivery of decent healthcare is often hampered by a lack of infrastructure, especially in rural areas. Not fancy hospitals or equipment – but basic services – unclean water, unreliable electricity supply; absence of internet connections or sufficient bandwidth; outdated telecom networks; all this has a direct, negative impact on healthcare delivery. What’s more, lack of infrastructure also forms a powerful impediment to the introduction of telemedicine solutions in remote, poor areas. In this respect, an improvement of the IT infrastructure could play a tremendously positive role in healthcare. An adequate IT infrastructure can ensure that the right information gets to the right people quickly, all through the system, from nurse to ministry. It could be a vital weapon in the fight against epidemics such as SARS or avian flu. We also have to face a widespread lack of technical skills among healthcare professionals in the region. A new medical device is only as good as the person operating it! Training of local people to make the most of investments in new equipment and facilities is therefore essential. According to some sources, up to 50% (that is five zero!) of technology imported from developed countries goes unused in developing countries, simply because there has not been enough training. A healthcare dollar spent on training may well be the dollar with the highest return. In this context, the retention of healthcare professionals is also a very important challenge. Nurses from Malaysia and Philippines as well as doctors from leading hospitals around the region are lured away, especially to Europe and the Middle East. You can’t blame the individuals involved: it is not unusual for them to make four times as much money in their new job. For South-East Asia, however, it means a tough loss, the more so because these people more often than not were trained locally, in this region, by government and hospitals. We also need to give a boost to public health education. Now that ‘Western’ diseases have become so prominent in the East, we need to attack them head on, trying to prevent them. We must try and make people aware how simple lifestyle changes will improve their health and will reduce their risk of falling ill. After all, obesity, diabetes, lung cancer and cardiovascular diseases are often the result of bad diets, smoking and lack of exercise. In many ASEAN countries, as in other emerging economies, we also face a problem of healthcare insurance coverage. It is either not available or not affordable for the majority of the population. A PricewaterhouseCoopers study estimates that only one in 10 Indians has any form of health insurance and that 20 million people in India fall below the poverty line each year because of indebtedness due to healthcare needs. That is why it is encouraging to see initiatives with collective micro-financing of healthcare in various Asian countries, for example the Philippines. As you can see, we face a whole set of important challenges. More often than not, we have to confront these challenges within tight financial constraints. In the developed world, the rising costs of healthcare cannot continue indefinitely; in emerging countries, healthcare competes for money with other vital ingredients of development. It would be very pretentious on my part to suggest that I know all the answers to all these difficult questions and tasks. I don’t and neither does Philips as a company. We will have to find the answers together: healthcare providers, patients, public authorities, insurers and – of course – healthcare companies like Philips. That’s exactly why forums like this one are so valuable. Although we don’t have all the answers, at Philips we do have a vision; a philosophy that we think should inspire the search for the best healthcare solutions. Let me share these views with you. First of all, at Philips we are very clear that the patient should come first. Of course, new technologies will play an important role in tomorrow’s healthcare systems, but our starting point should always be the real needs of patients, not an abstract technology or machine. We have to combine clinical expertise with insights into human needs. Because patients come first, we have to enable doctors and nurses to do what they want to do: give patients their best care. Lowering the work load of healthcare professionals and simplifying their work has many advantages. It will improve their work conditions and job satisfaction. It will increase productivity and ‘through put’. Last but not least, paying attention to the needs of the healthcare professional is one of the best ways to ensure a patient-centered healthcare system. If technology takes into account the needs of patients and healthcare providers and is easy to use, then doctors, nurses and other professionals can focus on the patient instead of on the machine! To meet the patients’ real needs, we have to provide integrated solutions across the entire cycle of care. We have to concentrate on prevention, early diagnostics and remote patient management. We simply cannot afford to focus only on extremely costly and traumatic surgical interventions. That would be financially unsustainable. Of course, hospitalization and surgical interventions will always form an essential part of a decent healthcare system. But patients obviously prefer prevention and disease-management in their homes rather than hospitalization. Our healthcare systems of the future will have to focus much more on prevention, screening and early diagnosis. Hospitalization represents a tremendous financial burden. At Philips, we also strongly believe that all players in the healthcare sector have to work together and cooperate across traditional boundaries. As I have just said, no single person, company or group can meet all the challenges and come up with the right answers to all the challenges on their own. We should cooperate in a spirit of Open Innovation in order to develop new technologies, new business models and financing systems that serve patients and healthcare professionals best. For the good of patients and tax payers, we also have to ensure that we align all incentives in our healthcare systems. We have to ensure that the financial and professional interests of all players are in line with our overall goal: to provide quality healthcare to people in a financially sustainable way. No incentive for any particular group should go against this common goal. Focus on the patient; simplify the workload of healthcare professionals; take the entire care cycle into account; put our healthcare systems on a financially sustainable footing; work together in a spirit of Open Innovation; align all incentives towards the common goal. That summarizes Philips’ healthcare philosophy. How does this vision translate into specific initiatives, actions and products? Let’s focus first on our task to keep people out of the hospital. One way to reduce the demand on hospitals is to take care of people in their homes through remote patient management. In the developed world, remote patient management is driven by financial motives and patient preferences. In the emerging economies, and especially in poor rural areas, remote patient management is often the only alternative because hospitals are often very far away from patients’ dwellings. These same patients often don’t have the means to travel to the nearest hospital. To address this issue in the Philippines, last year Philips helped to introduce the Easy Web (or E-Web) Healthcare System. This internet-based system allows on-line remote diagnosis of patients with heart conditions by experts based at the Philippine Heart Centre in Manila. The Easy Web Healthcare System enables vital care for thousands of people in rural areas who were previously outside the reach of modern healthcare. All over the world, remote patient management can focus on the parts of the care cycle that we need to strengthen most: screening, early detection and after-care outside the hospital. Over the last few years, Philips has made some important acquisitions that have strengthened our position in the market of out-of-hospital care. Our last and biggest acquisition in this area was Respironics, a leading company in the fast growing market of solutions for respiratory problems and sleeping disorders. Patients can use Respironics’ products not only in the hospital, but also at home. With this acquisition, Philips is now a global leader in Home Healthcare Solutions, after earlier acquisitions in the area of monitoring and warning systems for elderly people who live independently and in the area of home cardiac monitoring services. Taking care of patients outside the hospital, in the comfortable and trusted environment of their own homes, is a great thing. Preventing people from becoming patients in the first place is even better! Very often, prevention of illnesses starts outside the traditional boundaries of healthcare. Safe drinking water and clean air are the best prevention against diseases. Unfortunately, water-related diseases are responsible for millions of deaths every year. Philips has several products addressing this issue. We offer UV light purification solutions to produce pure water, safely and cost-efficiently. The UV lamps that kill bacteria and viruses can be built into more traditional water purification systems. I have mentioned the importance of financial sustainability of our healthcare systems. Of course, it would be very naive to ignore the differences in healthcare finances between different parts of the world. At Philips, we recognize these differences and we try to address the needs of all markets. That’s why we are also focusing on cost-effective products and solutions for emerging economies. We want to do this as much as possible with local partners, local expertise, and local products. Earlier this year, we announced two acquisitions to strengthen our offering in low-cost monitoring solutions for healthcare in emerging economies. In China, we announced the acquisition of Shenzhen Goldway Industrial Inc. Goldway is the second largest domestic Chinese patient monitoring company, a sector in which Philips is the worldwide market leader. Its products include a full range of patient monitors for both acute and non-acute care, solutions for women’s health and anesthesia machines. Their products are low-cost and especially appropriate for small- and medium-sized hospitals in emerging markets. In Brazil we have taken over Dixtal, the local market leader in Brazil for patient monitoring solutions. Of course, we will try and leverage these acquisitions with our own Philips capabilities, for the benefit of healthcare systems and patients in emerging economies. Our effort in the area of cost-efficient solutions is not limited to acquisitions. In China, we also have an R&D and manufacturing joint venture with the Neusoft Group to address the economy to mid-range market of medical technology in China and other emerging economies, especially in the area of medical imaging equipment. And later this month (June 2008), we are introducing our SureSigns VM3 vital signs monitor in India; the SureSigns VM3 combines state-of-the-art clinical algorithms and technology in a compact, cost-efficient package and is very well suited for the wide range of clinical environments in India and other emerging economies. In addition, we make sure our products are future proof through our Technology Refresh programs. Of course, the ideal innovations in healthcare increase patient satisfaction and healthcare quality while at the same time reducing costs. In the area of medical imaging, where Philips is among the top three worldwide, we have taken various initiatives to achieve that goal. A good example is offered by our “Ambient Experience MR Suites”. It is a well-known fact that many patients react with fear or claustrophobia to scanning procedures such as MR, Magnetic Resonance. As a result, they either require sedation or are unable to undergo the test at all. This is not only bad for patients, but also for healthcare professionals and for the efficiency of the healthcare systems. Sedation is a time consuming procedure; productivity of the scanning equipment goes down if the patient has to be sedated first or even has to come back for another go. The Philips Ambient Experience Suite offers patients a calm, reassuring atmosphere to help them allay their fears. Ambient Experience enables patients to personalize their experience by choosing images for surrounding walls, by selecting relaxing sounds and by modifying the lighting in the room. As a result of Ambient Experience, patients feel more comfortable and hospitals become more efficient. It is a great example of how putting the patient first will allow us to both increase the quality and reduce the costs of our healthcare systems. We have already installed more than 50 Ambient Experience Suites worldwide. The Malaysian Subang Jaya Medical Centre has the first Ambient Experience MR Suite in the ASEAN region. As for the importance of training, we cooperate with the National Health Centre in Singapore in the area of cardiac laboratory imaging, training cardiologists from the ASEAN region on the usage of relevant equipment. Also based in Singapore is our own, 37.000 square feet Philips Learning Centre, where we train healthcare professionals from around the Asia Pacific region in the skills necessary to operate advanced high-performance diagnostics equipment. In Thailand, as part of our deal with the Phyathai Group, we will not only supply equipment and technology to Phyathai hospitals; we will also jointly develop a training center. We also take active part in Open Innovation partnerships. We participate in a myriad of projects all over the world in which we cooperate with universities, hospitals and pharmaceutical companies. Let me just give you a few examples from the Asia Pacific Region. In China, we have started up three such research partnerships over the last year: with the Shanghai Institute of Biological Sciences, with China University of Hong Kong and with the West China Hospital, a hospital affiliated to the Sichuan University in Chendu. These partnerships seek to develop innovative imaging procedures to improve diagnosis and monitoring of major illnesses such as cardiovascular disease and cancer. In India we have a great partnership with the Artemis Health Institute. Artemis engages in clinical studies in the area of molecular diagnostics and molecular imaging, using Philips’ technology. While know how is transferred from Philips to India, our company gets real time access to scientific data regarding the performance of our products, which can be used for product development and upgrading. In Singapore, Philips and Temasek have collaborated on strategic healthcare pilot projects in the area of eHealth. Finally, we are supporting sustainable development projects through Overseas Development Aid programs in for example Vietnam, India, China and the Philippines. Ladies and Gentlemen, All these examples of how Philips is implementing its view on healthcare illustrate our commitment to Asia in general and the ASEAN region in particular. We are passionate about healthcare and keen to contribute to the best of our abilities to the further development of high-quality systems in this region. We know this requires dedicated solutions to the specific challenges you are facing and fitting the local context. That’s why we are growing our payroll, the number of R&D projects and cooperations as well as our production in the region. We also want to intensify the dialogue with all stakeholders in the healthcare domain. Because let’s face it: even if industry does everything right, we can’t fix the problems on our own. Even if we come up with the right products and with the right business models, other players have to do their bit, too. There is an important role for government, of course. For example, while maintaining the necessary safety controls, governments should speed up the approval process of promising new technologies, products or medicines. Governments should also try and reduce the global deficit of doctors and nurses. Public health authorities should be at the forefront of campaigns for healthier lifestyles and diets. Think, for example, about tobacco. Smoking is an important contributing factor to tuberculosis, lung cancer and cardiovascular diseases. I am convinced there is scope - here in South-East Asia as in other regions – to fight these diseases by actively reducing the consumption of tobacco. Healthcare institutions have the responsibility to ensure that their internal processes and organization are as efficient as possible. Insurers should try their best to come up with creative yet sustainable forms of financing for healthcare coverage. In emerging markets, like in developed economies, public healthcare facilities are under growing pressure to cope with the rising demand for healthcare. Finding ways to transfer more people to private health insurance, for example through tax relief or tangible incentives such as fast service or wider coverage, may be a way to go. And all together, we have the responsibility to avoid misalignment of incentives. For example, it could prove counterproductive to make the remuneration of doctors very dependent on the prescription of medicine, as is the case in various Asian countries. In any given situation, a prescription of a medicine may or may not be the best medical solution. However, the decision to prescribe a medicine should not be influenced by financial incentives for the healthcare professionals, but by what is best for the patient and most cost-efficient for the healthcare system as a whole. Ideally, the financial incentives for all participants in the healthcare system should be linked to sensible goals: keeping people healthy through prevention, for example. Or pre-empting the need of expensive treatments through early detection of diseases. Ladies and gentlemen, Let me conclude. I have spoken to you about the tough challenges facing us and the responsibility of all of us to make it a priority to solve them. I think we all share the awareness that only together – industry, healthcare institutions, government, insurers, patients – we can succeed in developing and implementing the right solutions. That’s why, at Philips, we are calling for an intense dialogue with all stakeholders in the healthcare industry, to hear each others’ views, share proposals, and to come up with actionable solutions and agreements on how to put these into practice. Half a year ago, at a similar event in Kuala Lumpur, our CEO Gerard Kleisterlee made this plea, and it is encouraging to see the unanimous support his call received, as well as some good examples of progress there are at different places. Now it’s time to step up our efforts, and I hope that we can make some concrete progress during this conference and the dialogue sessions we’re having adjacent to it. I am eager to hear your opinion on our views, because, at Philips, we hold healthcare very dear. We all share the same goal: providing the citizens of the world with financially sustainable healthcare systems of decent quality. As I mentioned in the beginning, in the 21st century, universal quality healthcare has to be a basic human right. The discussion on how to achieve this goal has started - concerted action in healthcare is a responsibility of all of us. Only together, can we make it happen, only together can we succeed. Thank you very much for your attention. |