McKinsey & Company: our perspectives on achieving impact in health system reform

LON-ZZE856-20081209-Health Systems Perspectives & Qualifications McKinsey & Company: our perspectives on achieving impact in health system reform January 2009

LON-ZZE856-20081209-Health Systems Perspectives & Qualifications CONTENT Situation today Achieving impact in health systems reform McKinsey’s health systems practice Examples of our work Appendix

16 LON-ZZE856-20081209-Health Systems Perspectives & Qualifications HEALTHCARE REFORM IS A TOP ISSUE GLOBALLY • Improving healthcare is a top public priority in every country . . . . . . but where to start? • Percent per country ranking health as the top personal concern* • Health systems are complex . . . • Difficult to determine what to do • Quick wins are hard to identify • Success is hard to measure • Poland • Russia • China • Bulgaria • Rapid change is difficult . . . • Many stakeholders, most with different interests • Hard to rapidly increase skills • Germany • India • Italy • Japan • Sweden • Funding is limited and costs are already high • Based on growth over the past 40 years, projections show health costs could hit 50% of GDP in more than half of the OECD countries by 2100 • Spain • France • Canada • U.S. • Britain * Open-ended responses: "What is the most important problem facing you and your family today?" (multiple answers accepted) Source: Kaiser Family Foundation and the Pew Global Attitudes Project released a report in Dec 2007

LON-ZZE856-20081209-Health Systems Perspectives & Qualifications HEALTH CARE SYSTEMS LEADERS ARE UNDER PRESSURE TO TACKLE MULTIPLE CHALLENGES • Responding to rising costs • Improving value for spending • Ensuring rational adoption of new drugs, devices, and technologies • Creating value conscious consumers and cost competitive providers • Providing access • Delivering high quality • How to best balance cost, quality, and access in a manner that is both sustainable and consistent with social values and political goals? • Defining "right" level of care and coverage • Defining role of private and public sectors • Ensuring equity across the system • Managing rising numbers of chronic disease patients • Reducing variations in clinical practice • Adopting evidence-based care

Aging populations • World population • Millions by age • 10,000 • 21% • ≥ 60 • 8,000 • 6,000 • 10% • 59% • 15 - 59 • 4,000 • 60% • 2,000 • 0 - 14 • 30% • 20% • 0 • 2000 • 2050 • A shift towards chronic disease • World deaths • Millions, percent • 50 • 57 • 58 • 63 • 73 • Injuries • 9 • 9 • 9 • 0.3 • 10 • 10 • Commun-icable* • -1.1 • 0.4 • 69 • 65 • 61 • Chronic • 59 • 58 • 1990 • 2002* • 2005** • 2015** • 2030** LON-ZZE856-20081209-Health Systems Perspectives & Qualifications AGING AND DISEASE MIX ARE DRIVING RISING COSTS GLOBALLY… Note: All WHO countries with private medical expenditures above USD 5 bn * Includes communicable, maternal, perinatal, and nutritional conditions Source: WHO Core Health Indicators, ICP Global Results, EIU, McKinsey analysis

LON-ZZE856-20081209-Health Systems Perspectives & Qualifications … AS IS INNOVATION IN TECHNOLOGY 1 2 3 4 • 50% of diseases will be predictable at birth • “…and your new arm will be ready on Friday” • “First marathon in 1:35 • with • Stryker knee” • All your • X-rays • a mouse click away

LON-ZZE856-20081209-Health Systems Perspectives & Qualifications . . . WHICH COULD RESULT IN HEALTHCARE SPEND CONSUMING DISPROPORTIONATE AMOUNTS OF GDP IF SYSTEMS GO UNCHANGED • OECD-historic rate: GDP + 2.0 • Half OECD-historic rate: GDP + 1.0 Source: Forecast model assuming real GDP growth of 2.0%, health care spending growing at 0.95/1.9 percentage points above; OECD Policy Implications of the New Economy 2000 - 2050 (2001); Global Insight WMM 2000 - 2037

LON-ZZE856-20081209-Health Systems Perspectives & Qualifications OUR BASIC BELIEF IS THAT HEALTH SYSTEMS REFORM IS A LONG JOURNEY THAT REQUIRE VISIONARY LEADERS • There is no best system, adapting reform to local context matters • Major transformation typically requires 2–5 years of sustained effort • Support from the top is crucial to ‘shape’ the direction, it is imperative to understand the full story • Success is driven by • Clarity of direction and what success will look like relevant to existing context • Clarity on behaviours which need changing, and how that will happen • The momentum generated by a few of successful quick-win projects with substantial quantifiable impact • Capability building at all levels of the system, supported by significant leadership inspiration and energy • Health systems reform is a journey • Visionary leaders will experience highs and lows but if thoughtful of the overall direction, will improve the health of the population in a tangible and measurable way, improve access and manage costs

LON-ZZE856-20081209-Health Systems Perspectives & Qualifications ACHIEVING IMPACT REQUIRES ATTENTION TO A SET OF CORE PRINCIPLES • Successful health system transformation Take a holistic view of the health system Focus change on the target end state Follow the patient’s journey Develop leadership at every level Use a multi-stakeholder partnership to drive change 1 2 3 4 5 • All relevant aspects of government • Social and private sector actors • National public health outcomes • International goals (e.g., MDGs*) • Patient journeys through the health system • Key clinical pathways • Top level Ministry leadership • Mid level system leadership • Clinical leadership • Governments • Donors and bi/multi-laterals • Private sector • Social sector and NGOs Engage the system from within * Millennium Development Goals

Ministry of Health LON-ZZE856-20081209-Health Systems Perspectives & Qualifications 1 HEALTH SYSTEM REFORM REQUIRES CHANGING AN ENTIRE SYSTEM, NOT JUST THE MINISTRY OF HEALTH • Alternative/ traditional medicine • Ministry of Finance • (health system financing) • Social Sector (NGOs, community service organizations, think tanks) • Ministry of Labour • (health care work force – domestic and international) • Health systems play a role in a country’s human and economic development • While reform may require change at the micro level, it will also require change at the macro level including many other aspects of government • Parastatal • companies • (access to telecommunications, power, water for health facilities) • Ministry of Education • (health care degree programs, bursaries and secondary school sciences) • Private Sector (health care and large employers) • Regional and local governments • (sanitation, hospitals, schools and infrastructure) • Ministry of Works and Transport • (facility construction, renovation and repair, and roads)

170 Area • 2006 • 2007 • 2008 • 2009 • Activity 1 • Policy/ strategy • Health system • structuring • Diagnostic • System design • Design & costing of package • Design of payor and insurance system 2 • Payor • NHIS • Diagnostic • Pilot to improve primary care sustainability • Design of PC model 3 • Provider • Primary care • reform • Diagnostic/inventory of current hospitals • Design future hospital model • Performance improvement pilot • Hospital reform • Develop provider quality standards • Start improving providers • Create regulator 4 • Regulator • Regulatory reform 5 • Cross-cutting • Reorganise ministry, upgrade nursing curriculum, introduce doctor standards, launch leadership and business training for ministry employees and hospital CEOs • Organisational • design • Short-term, high • impact interventions • Idea creation and planning • Mobile clinics (clinical convoys)/ breast cancer screening • Ambulance development • Sequence of short-term highly visible healthcare interventions to create-buy-in and sustain momentum • Primary care build-out/construction • 6-monthly national health conferences • Plan and prepare for pilot of new health system in one region • Regional pilot LON-ZZE856-20081209-Health Systems Perspectives & Qualifications 2 REFORM SHOULD FOCUS ON THE TARGET END STATE WITH REGULAR TRACK OF PROGRESS • GCC EXAMPLE • Target • Main activities • Progress against target • Objective • Days of waiting time for Gastroentology 1 • Optimized triaging by nurse • Opening HC in the evening • Pre-booking telephone appointments • Patient segmentation • Outpatient department • Waiting times • Reduce waiting time of new patient referrals for 10 hospital specialties to 30 days or under • 266 • 15 • 11 • 11 • Oct 05 • Jan 06 • May 07 • June 07 • Average opening times over a week, gynecology services 2 • Improve operation theater utilization • Begin operations by 7:45 AM for all departments • Identification of bottlenecks, such as cold OT’s • Installment of timers to heat OTs in the morning • Reorganization of shifts • 9:33 • 8:32 • 8:06 • March 06 • Dec 06 • May 07 3 • Establishment of national authority for regulation of health profession and services • Strengthen and enforce quality standards in private and public health care • Strengthen the role of the Office of Licensure and Registration as regulator of health institutions, professionals and the pharmaceutical industry • Nomination and training of CEO and key staff • Regulation of health institutions, professionals and the pharmaceutical industry • Development, of national minimum standards for health institutions and enforcement criteria • Establishment of criteria for registration, licensing and re-licensing of health professionals

Observations / Rationale • A clinical pathways approach highlights improvement areas from a patient’s perspective • Pathways highlight opportunities for change across different care providers (i.e., primary, secondary, tertiary, etc.) • The pathways approach is useful for engaging clinicians and other health practitioners in identifying change priorities • End of life • Planned care • LTC • Acute • Staying • healthy • Birth LON-ZZE856-20081209-Health Systems Perspectives & Qualifications 3 A CLINICAL PATHWAYS APPROACH IDENTIFIES IMPROVEMENT AREAS ACROSS THE PATIENT’S LIFE SPAN • UK EXAMPLE Proposed key changes required to deliver world-class care based on best practice • Women should be offered choice of home birth, midwife-led or obs-led care • Obstetrics units with at least 96 hrs/week consultant cover • Every obstetrics unit should have a co-located midwifery unit • 1:1 midwife-led care should be provided in labor within existing resources • Antenatal and some postnatal care should be provided in local dedicated hubs • More should be invested in proven health improvement programs • The NHS should play a greater role in improving the health of its employees • All health professionals should be incented to improve health at each interaction • Need for more partnership working to help people stay healthy • Integration of community and secondary care services • Pro-active primary care to reduce emergency admissions • Develop London-wide best practice Care Pathways for different LTCs (e.g., DM, COPD, HTN, Asthma) • Routine diagnostics provided in a community setting • Improve access through local 24/7 urgent care centers with doctors on-site • A single point of contact (by telephone) for urgent care • Centralization and networks for Major trauma, MI, and Stroke • Dispatch and retrieval protocols for LAS need to be aligned with centralization • More specialized inpatient care should be centralized into major acute hospital • Shift less complex surgery, diagnostics, and outpatients out of major acute hospitals • Better use of the day case setting for many procedures • Improve community-based services (e.g., community nursing) • Commission end-of-life service providers to co-ordinate end-of-life care • People have an end-of-life care plan, including preferences on place of death • All organizations should meet good practice (e.g., gold standards framework) • Greater investment to support people to die at home

LON-ZZE856-20081209-Health Systems Perspectives & Qualifications 4 STRONG INDIVIDUAL AND COLLECTIVE LEADERSHIP IS REQUIRED TO IMPLEMENT AND SUSTAIN CHANGE PRIORITIES • Leadership development can effect significant lasting change • Necessary shifts in traditional leadership development approaches • To… • From… • Today, many health interventions can not be implemented or brought to scale because of weak system leadership, among other factors • Strengthening leaders will improve the effectiveness of actors within the public health system • A collective leadership team – in a coordinated fashion, with aligned intent, focused on the most crucial challenges in the system –will achieve step-change improvements in the health of the system • Developing leaders in a complex adaptive system such as public health can catalyze positive increasing returns and create public health systems that evolve organically to higher levels of performance • Shifting aspects of the system while developing the people in it • Developing people in system • Objective • Public healthcare professionals • The individual • Inclusion of the private sector, adjacent systems leaders (e.g., education, finance), others • Collective leadership team as well • Target • Technical/managerial skills • Special project for action learning • Mindsets (meaning, purpose, etc.) as well as skills • Broader set of skills (e.g., interpersonal, etc.) • Joint initiatives to shift system at leverage points • Curriculum • Engagement from within: enable local capacity to develop, tailor, embed, extend learning • Building on/removing barriers to what works already • Injection of best practice from outside • External faculty • Offsite program • Additive • Episodic • Delivery Mechanism

Governments • Political influence • Power to mobilize political support, to implement regulatory changes, and to prioritize transformation • Robust support model • Access to sustained funding • Broad-based involvement LON-ZZE856-20081209-Health Systems Perspectives & Qualifications 5 REFORM SHOULD BE DRIVEN BY A MULTI-STAKEHOLDER PARTNERSHIP • Reform will require commitment and resources from a wide group actors both public and private over 3 to 5 years • Private sector • Donors and bi-/multi-laterals • Deep functional expertise • Core competence in specific business areas, e.g., supply chain management, corporate finance, social marketing • Broad-based business and organizational experience • In-depth knowledge across multiple industries and organizations • Specific product offering • Specific products and services required by the health system, e.g., consumables and infrastructure • Financial support • Ability to finance projects that support government efforts as well as to test new approaches and initiatives • Broad health system experience • Experience across multiple geographies to share knowledge and approaches • Deep knowledge in health • Depth in knowledge across health system financing, human resources, infrastructure, operations, and enablers such as IT • Government influence

LON-ZZE856-20081209-Health Systems Perspectives & Qualifications AN OVERVIEW OF MCKINSEY & COMPANY • Origin • Founded in 1926 in New York by James O. McKinsey • Resources • Presence in 45 countries around the world with 89 offices • 8 300 consultants around the world • Clients • Private sector companies, governments and social sector organizations • Healthcare • 2 250 projects since 2002 • Clients include payors, providers, pharmaceutical companies as well as medical products • Our consultants include over 150 medical doctors and over 250 with Masters or Ph.D degrees in life sciences, medical and healthcare fields

100 LON-ZZE856-20081209-Health Systems Perspectives & Qualifications McKINSEY HAS ATTRACTED TALENT SPECIFICALLY TO MEET THE GLOBAL HEALTHCARE SECTOR CLIENT NEEDS The McKinsey Global Healthcare practice has medical, scientific and extensive business management skills and knowledge • 100% = • 400 • Approximately 150 MDs with patient care or research experience (often both) representing most major medical specialties including • Anesthesiology • Cardiology • Cardiovascular surgery • Gastroenterology • Critical Care and Emergency Medicine • Medical Doctors • 150 • Neurosurgery • Orthopedic surgery • Pediatrics • Radiology • Approximately 200 consultants with Masters or doctoral degrees in various life sciences and medical fields including • Genetics A • Immunology • Biochemical Engineering • Biotechnology • Life Science Masters/PhD • 200 • Molecular Biology • Neurobiology • Biochemistry • Pharmaceuticals • About 50 consultants with Master’s degrees in Healthcare (e.g., Master of Public Health, Healthcare Management) • Other Health-related backgrounds • 50 • Consultants Source: McKinsey & Company, 2007

LON-ZZE856-20081209-Health Systems Perspectives & Qualifications HEALTH SYSTEMS IS ONE OF FOUR HEALTH CARE PRACTICES AT MCKINSEY McKinsey Healthcare Practice • Focus of this document Health Systems Healthcare Provision and Payment Global Public Health Pharmaceuticals and Medical Products • Governments • Governments, hospitals • Foundations, multilaterals, NGOs (e.g., Gates Foun-dation, Global Fund, GAVI, WHO) • 20 of top the 20 pharma companies; biotech and medical devices • Clients • 17 countries around the world including Egypt, Middle East, Canada, Cyprus, Namibia, India Tanzania, and the UK • Major hubs in US, U.K., Germany, and Singapore • Work in more than two dozen countries • Africa, India • Worldwide (mostly developed countries) • Geographies • Expertise in designing health systems, including assessing performance, setting strategic priorities, policy and regulation • Expertise in running developed health systems, including commissioning, contracting and community care • Expertise in design of MDG* programmes, HIV/AIDS, vaccines, evaluation and strategies for alliances • Expertise in pharmaceutical and medical products, strategies, sales and marketing, R&D, operations, etc. • Focus * Millennium development goals

Health systems improvement program design • Shaping the role of the regulator • Healthcare financing • Provider capacity planning • Human resource strengthening • Health informatics • Non-communicable diseases • Access to care in remote areas LON-ZZE856-20081209-Health Systems Perspectives & Qualifications OUR HEALTH SYSTEMS WORK IS TAILORED TO ADDRESS TYPICAL ISSUES • We assist governments to perform a diagnostic to assess their health system and map bottlenecks and priorities for health system reform • We help governments draw up a vision for their health system & identify key reform elements • We help governments shape the role of the regulator and assist in building independent health regulators with a clear role and accountability, eg. quality regulator, reimbursement regulator • We work with ministers of finance and health to optimize the way healthcare funds are collected, administered and spent in line with the country’s priorities, e.g. to address shortages • We assist governments in assessing and transforming medical needs of whole regions or population segments into tangible infrastructure, e.g. physician allocation, emergency care • We support key stakeholders to build capabilities throughout the healthcare pyramid, e.g. doctor education and continuous training, accreditation • We work with governments in defining the IT architecture that meets their needs for better efficiency and information collection/transparency • We support governments to design chronic disease programs improving outcomes in stroke, cancer, diabetes, cardiovascular diseases as well as obesity • We support the set up and design of public private consortiums, building a ‘Mobile enabled' infrastructure that address the lack of healthcare resources in remote or rural areas

Stewardship of government/ governance LON-ZZE856-20081209-Health Systems Perspectives & Qualifications MCKINSEY HAS HAD THE OPPORTUNITY TO WORK ON HEALTH SYSTEMS PROJECTS ACROSS THE WORLD • National review, capital accounting, compulsory medical audit, competition as stimulus, sexual transmitted diseases, focus on publishing outcomes data, national screening programs e.g. cancers, waiting, vaccination programs, HR multidisciplinary teams • Provincial health policy, demand & supply management, quality control • Focus on qua-lity accrued, transfer of MOH to NHA • Health system reform • Health system diagnostic • Health system blueprint, provider selection • Health insurance strategies, integrated care • Regional system design • National insurance, hospital/clinic coverage and operations, quality regulator • System reform • Ministry restructuring, new health insurance scheme • Task shifting, standardizing salaries of HC workers • Drug approval • Patient safety in health reform, Medicare for elderly, managed care, mammography utilization • Malaria prevention, physician education • Policy framework and implementation roadmap • User charges, emergency care, rural care • Sustainable local care • Decentralization of health services/ regions and perform-ance based system • Movement to national health insurance • Regulation of the private sector • Implement perform-ance management program across system • Data driven and definition of ess-ential package • System diagnosis, initiative and leader selection

LON-ZZE856-20081209-Health Systems Perspectives & Qualifications A NETWORK OF PARTNERS WITH STRONG LOCAL AND GLOBAL EXPERTISE • Americas • EMEA • Asia • Elisabeth Hansson • Sweden • Axel Baur • Germany • Deepak Khandelwal • Canada • Bruce Simpson • Canada • Paul van Arkel • Russia • Claudia Süssmuth-Dyckerhoff • China • David Chinn • Israel • Ben Richardson • UK • Jean Drouin • GPH/HSI Leader • Nicolaus Henke • EMEA HPP Practice Leader • Takashi Takenoshita • Japan • Ludwig Kanzler • Japan • Bob Kocher • US • Paul Mango • US • Viktor Hediger • GCC/ HSIG Practice Leader • Amine Omar Tazi-Riffi • North Africa • Rui Diniz • Iberia • Maria Marquez • Iberia • Tilman Ehrbeck • India • Paolo De Santis • Medeter-ranian • Thomas London • France • Chinta Bhagat • Singapore • Yael Heynold • Australia/New Zealand • Carlos Murietta • Latin America • Cristian Baeza • Latin America • Shrey Viranna, • Sub Saharan Africa

LON-ZZE856-20081209-Health Systems Perspectives & Qualifications McKINSEY REGULARLY PUBLISHES ON A RANGE OF HEALTHCARE TOPICS, EXTERNALLY… • Addressing Japan’s Healthcare Cost Challenge • A healthier healthcare system for the United Kingdom • Innovation in Healthcare – an interview with the CEO of Cleveland Clinic • A better hospital Experience • Mapping the market for medical travel • Dissecting global trends – an example from Italy • Universal principles for healthcare reform • Health Europe/Health International – publications on the healthcare industry • Management matters • How service line management can improve hospital performance • The health care century • The best that limited money can buy • Optimized procurement unlocks cash and strategic options • Patient choice – threat or opportunity for UK Hospitals • Quality of care – an international perspective for the NHS • White papers • “Developing perspectives of high-impact health systems reform”, McKinsey Global Institute report • “Clinical leadership – unlocking high performance in Healthcare” by James Mountford and Caroline Webb • No holds barred in management battle, HSJ, 2008

LON-ZZE856-20081209-Health Systems Perspectives & Qualifications CONTENTS Situation today and our perspectives Achieving impact in health systems reform Our experience McKinsey’s health systems practice Appendix

LON-ZZE856-20081209-Health Systems Perspectives & Qualifications Dr. Nicolaus Henke • Dr. Nicolaus Henke is a Director of McKinsey & Company, based in London. He has also served the Düsseldorf, Berlin, and New York offices. He is Head of McKinsey’s Payor & Provider Healthcare Practice in Europe, the Middle East, and Africa and chairs McKinsey’s work with national Health Systems globally. He frequently speaks at conferences and publishes on a broad range of healthcare and talent management issues and is a lecturer in health system policy in various executive education programmes. • His recent experience includes: • UK health care management: Nicolaus is the overall head of McKinsey’s work with the NHS. Topics of his involvement include the future of commissioning, the regulatory framework of the future health sector, the assessment and compliance approach of Foundation Trusts, the diagnostic and capacity adjustment for Strategic Health Authorities, new models in emergency care, designing payment by results, patient expectations under choice, the state of NHS finances and NHS financial management, and governance in healthcare. • Global Health systems: Nicolaus has practical experience from 17 healthcare systems and is serving various governments and heads of state on overall health system reform in countries as small as 600000 patients and as big as 70 million. He has worked on a broad range of topics, such as health system funding and payment reform, designing and managing competing public payors, cost and productivity programmes, hospital contracting, case management, pharmacy benefit design and management, benefits management, and regional capacity planning. • Nicolaus was an Investment Adviser at Deutsche Bank AG for 2 years and graduated with distinction with a Master’s and Doctorate degree in Business from the University of Münster, Germany. He holds a Master’s in Public Administration from Harvard’s Kennedy School of Government, where he was a John J. McCloy scholar.

LON-ZZE856-20081209-Health Systems Perspectives & Qualifications Dr. Axel Baur • Dr. Axel Baur is a Partner in the Düsseldorf Office of McKinsey & Company, Inc. and co-leader of both McKinsey's German Pharma/Healthcare sector and the Middle East Healthcare Practice. Since joining the office in February 1996, he has served a number of clients in various kinds of studies for different players in the healthcare industry, dealing with strategic, operational and organizational problem solving issues. • Overview of recent studies: • Payor & Provider engagements in Europe • Development of a turnaround program and strategy work for a German insurance company. Based on a detailed analysis of the financial situation, identifying a gap of Euro 100 million, a comprehensive program was defined addressing all levers within public insurance cost management. • Design of a hospital cost management program to manage 40% of a payor's expense. The program comprised contracting/negotiating elements, authorization procedures as well as claims management algorithms. In a last step these processes were imbedded in a new organizational structure • Payor & Provider engagements in the Middle East • Strategy for an integrated provider. Three entrepreneurs were supported in their endeavor to build an integrated service provider in Egypt, the Kingdom of Saudi Arabia and the UAE. The project included a business plan, the investor communication and the overall financial plan • Strategy for a hospital group in Saudi Arabia. The project focused on the future development in the Kingdom and the expected needs for tertiary care providers. The strategy depicted the required steps to be successful in the changing healthcare environment • Healthcare system design for a GCC country. Following a holistic diagnosis of the country's healthcare system all key elements for the system were defined as well as the necessary migration path • Axel Baur holds a degree in Biology and a Ph.D in Molecular Biology from the University in Darmstadt. His research activities focused on the molecular evolu¬tion/development of species. After his doctoral thesis he joined a biotech start-up, B•R•A•I•N. The company's focus is scientific consulting and customer research, he holds the patent on genetically engineered mistletoe lectine. Before joining McKinsey he received an MBA from INSEAD, Fontainebleau.

LON-ZZE856-20081209-Health Systems Perspectives & Qualifications Dr. Viktor Hediger • Dr. Viktor is a Partner in McKinsey & Company's Dubai office. He is co-founder of and co-leading the global McKinsey Health Systems Interest Group and is leader of the Middle East healthcare practice. • Viktor has a particular interest in health systems reform, holding an MD PhD MPH degree (MPH in Healthcare Management from Harvard School of Public Health, 2001/2002), with his main focus being on Health system design and implementation and Global Public Health. • His recent experiences include: • Health systems and Public Health • Strategic plan, health system design and implementation of the healthcare scheme in Cyprus • Strategic plan for a leading institution in the area of research for Tropical diseases • Health systems design and implementation support for two Gulf countries • Health strategy for a Gulf country with main focus on Tertiary Care • Health system diagnostic and Health system strategy for a developing country in West Africa • Global strategy for a top tier global non-profit organization • Strategy for Director General at WHO when taking office in 2003 • Payor and Provider • Introduction of innovative and novel approaches for a Health Insurer in the field of customer segmentation to boost profitability (Switzerland) • Development and implementation of a fully integrated care delivery system for a German Payor, including several hospitals and their referring ambulatory physicians (Germany) • Viktor holds an MD degree (University of Berne, Switzerland, 1992-1998) with a PhD in Neurophysiology (1994-1998). Before joining McKinsey in 1999, he has worked as a doctor in an orphanage for neurologically handicapped children in South America. Trained a military doctor (First lieutenant) in the Swiss Army, Viktor is now acting as a communication trainer and coach/facilitator for officers. At the age of 15-20 he was part of the Swiss National Judo Team.

LON-ZZE856-20081209-Health Systems Perspectives & Qualifications Dr. Jean Drouin • Jean Drouin is a partner in McKinsey and Company’s London Office. He has extensive international health care experience and has worked in the US, Canada, Europe, Asia and Africa. Jean has served governments, hospital, pharmaceutical, and medical device clients on a variety of strategic, operational and policy issues. • His experiences include: • Completing a capacity review of pediatric services in Ireland • Designing the regulatory strategy, including all aspects of assessment, monitoring and compliance, for a European health regulator • Developing the implementation plans for major health policy reforms in the UK, including the introduction of DRGs for hospital payment and the creation of a contestable market for hospital services • Assisting a major pharma player to design market access interventions that address the needs of non-physician stakeholders across Europe • Evaluating future opportunities in the diabetes market and developing a product portfolio strategy for a global medical devices company • Helping the Canadian affiliates of two global pharmaceutical companies merge and design a new organization and business plan • Conducting a cost/benefit analysis on the implementation of electronic physician order entry to reduce medical errors • Developing the go-to-market strategy and implementation plan to drive a 50% increase in patient volume at an academic heart hospital • Assisting a 1,600 bed Korean academic medical center improve performance through length of stay reduction, increases in OR efficiency and debottlenecking of radiology operations • Jean is a co-leader of the Health Systems Interest Group. His research interests include health system reform, financing and regulation as well as clinical service configuration and pharmaceutical market access. • Prior to rejoining McKinsey, Jean was at Goldman Sachs International in London, where he worked in the Health Care and Biotech Corporate Finance Group. • Jean received M.D. and MBA degrees from Stanford University. He holds a degree in Molecular Biology from Princeton University, where he graduated Phi Beta Kappa. He also has a Certificate in Public and International Affairs from the Woodrow Wilson School.

LON-ZZE856-20081209-Health Systems Perspectives & Qualifications Dr. Paolo De Santis Paolo De Santis is a Partner in the Rome Office of McKinsey & Company. Paolo main areas of competence are Public Sector, with a strong focus on Health System, and Financial Institutions. In the Public Sector field Paolo has worked in three areas i) Productivity Enhancement with the Italian Government ii) Health System Reforms in Africa, Asia and Latin America iii) Regional Economic Development in Africa. In the financial sector Paolo has worked for major financial institutions (both Italian and International), insurance companies and asset managers in a large number of areas both in retail and wholesale banking. In the last 1,5 years Paolo has led the openings of the McKinsey office in Cairo where he has been working with the Egyptian Government on a number of different topics. Among others: i) Country strategy for Foreign Direct Investment attraction ii) Full development of a city of 600,000 people Paolo De Santis entered McKinsey in 1998. Before that Paolo was assistant professor of Economics at the University of Viterbo and taught economic dynamics at Luiss University in Rome and Macroeconomics and Microeconomics at Columbia University (New York). Paolo has published several papers on macroeconomics and economic policy. In 2002 and 2003 Paolo has been on a leave of absence working as the Head of staff of the deputy Minister of Economics and Finance of the Republic of Italy leading several projects on matters included in the powers of the deputy minister. Among those: i) The privatization program of the national Postal and Railway operator ii) The Italian government procurement reform program (through Consip) iii) The rationalization of the IT systems of the Minister of Economics and Finance iv) The monitoring program of the cash flow of the whole Italian Public Administration through the creation of commonly adopted classification codes of all revenues and expenses. During his period as a Treasury official Paolo served as a Board Member of SO.GE.I (IT company with about 500 mln euros of turnover) and Quadrilatero (construction company with about 3 bln euros investment program) Paolo holds a degree in Economics from Università La Sapienza, Rome and a Ph.D. in Economics from Columbia University, New York.

LON-ZZE856-20081209-Health Systems Perspectives & Qualifications Dr. Cristian Baeza • Cristian Baeza is a Senior Expert in Health Systems Policy, Financing, and Health Insurance in McKinsey & Company’s Washington DC office, which he joined in 2008. Cristian leads the Health System Financing Group at the firm and his recent projects have included: • Leading work in regulation, health financing, and food regulation in GCC countries • Advising on the strategy development for a large international health foundation • Supporting work in health financing and health insurance in the Middle East and Latin America • Cristian has published articles on financing health systems, health and global development, including “Healthy Development: The World Bank Strategy for Health, Nutrition and Population Results”. He is also a co-author of the book “Financing Health Systems in the 21st Century” (OUP 2006) and “Health Systems: Improving Performance” (World Health Report, 2000, WHO). • Prior to McKinsey, Cristian was Director of Health, Nutrition and Population at the World Bank, a senior health systems and health financing specialist at the International Labour Organisation and CEO of the Chilean National Health Insurance Fund, FONASA. Cristian is a medical doctor with an MPH (Master of Public Health) from Johns Hopkins University and an MSc (Master of Science) in Neurosciences from the University of Chile.

LON-ZZE856-20081209-Health Systems Perspectives & Qualifications Dr. Farhad Riahi • Dr. Farhad Riahi is a Partner in McKinsey and Company’s London office. He is a leader of our UK Healthcare Practice and of our Global Public Health Practice. He is also a practicing physician, and work with native communities in northern Canada. • Farhad leads our work on improving health outcomes and quality of care, and on improving the performance of complex healthcare organisations. This includes: • Using evidence-based, cost-effective interventions to help payors improve the quality of care delivery (“Commissioning for Quality”), particularly for chronic conditions • Designing payor strategies that bring together rigorous health needs analysis with private-sector approaches to prioritisation and planning • Improving the performance of international health organisations (e.g., WHO, Stop TB Partnership) and of UK regional payors through best-practice performance management and capability building • Strengthening medical education and training through changing structure, financing, and performance management of the education and training process • , • Farhad serves clients at all levels of the UK health system, including hospitals (performance transformation of front-line clinical services), regional payors, and the Department of Health. He also works with the World Health Organization and associated global health partnerships. He has also served clients in France, Canada, and the Middle East. • Farhad holds an MD from McGill and an MBA from Wharton.

LON-ZZE856-20081209-Health Systems Perspectives & Qualifications Margareta Harrit • Margareta is the Practice Manager of the McKinsey Health Systems Group. Since joining the firm in 2004, Margareta has worked on healthcare, global public health and pharmaceutical studies particularly in Europe, China and the US. Margareta’s work focuses on overall healthcare system diagnostic as well as the broad area of prevention, both of communicable and non communicable diseases. Her recent experiences include: • Health Systems • Create, in collaboration with IASO*, a framework and tool for evidence based obesity prevention and reduction measures • Create framework to diagnose performance levers of a national health system • Develop tool to track health systems performance for regional decision makers through a clinical pathway approach • Design global workshop for Ministers of Health and private sector CEOs to share and build perspectives on public and private collaboration in healthcare provision and financing in low, middle and high income countries • Pharmaceuticals and Global Public Health: • Margareta has been involved in numerous vaccines studies (product strategy, market access, licensing strategies, capacity planning, pandemic planning) both from a profit and non profit perspective and co-authored articles on Avian Flu and Global vaccine production • Strategy, capability building and organization • She spent 5 months with a pharmaceutical company focusing on CNS products leading a capability building programme for the company’s market research division • Margareta also assisted a Belgian foundation develop their vision, mission and 2 year road map • Margareta holds an MA degree and a BSc from the Sorbonne University in Paris IV. Prior to joining McKinsey, Margareta • worked at the European Parliament and in a non profit organization facilitating content and best practice sharing on • Corporate Social Responsibility between member organizations and the European Institutions.

LON-ZZE856-20081209-Health Systems Perspectives & Qualifications Toby Lambert • Toby Lambert originally joined McKinsey & Company’s London office in 2002, and after two years in the Dubai office, is now an Practice Expert in London, covering Health Systems and Health Systems Reform. Since joining the firm, he has worked primarily in the Healthcare sector. Recent projects have included: • Planning, setting up & implementing a leadership academy to inculcate skills in a middle income country; • Planning the institution of a new national social health insurance system; • Implementing the pilot of a new social health insurance system in a middle income country; • Planning & implementing a new regulatory regime covering providers, professionals and pharmaceuticals; • Evaluating the impact, effectiveness and efficiency of a disease focused Global Public Health partnership; • Formulating the strategic plan and operating model for an integrated payor-provider in Latin America, including supporting on their acquisition of another similar integrated payor-provider; • Supporting the Department of Health in formulating their options as part of the wider regulatory review of health and social care; • Assessing the Fitness for Purpose of primary care organisations across their risk of financial failure, governance, and their ability to commission care effectively; • Diagnosing the issues facing a major Middle Eastern country’s healthcare system. Having formulated the main ethical, financial and operational challenges facing the country, work then moved on to setting the frame for addressing those problems through introducing a public health insurance model and redefining the roles and responsibilities of all healthcare players in the country; • Developing the blueprint for the redesign of a Gulf country’s public healthcare system. Work included formulating the options for a health system along the axes of access, financing, regulation and provision based upon international comparison, and then supporting the client in understanding the ramifications of each potential choice of healthcare system and hence selecting their ideal model. Follow on work is focusing on transforming the healthcare system to meet the blueprint; • Assessing the feasibility of a dedicated tertiary healthcare provider in a Gulf country. Work included assessing the required caseload, the potential market attractiveness of such a hospital and how it would complement the existing health facilities of the country • Formulating the strategic plan for a leading Middle East tertiary health care centre. Having conducted internal diagnostics on the hospital and an external diagnostic on trends in healthcare in the country, the work then focussed on delivering operational improvements to support the hospital in achieving its strategic goals • Developing the regulatory mechanism for a UK governmental healthcare initiative, through defining the scope and strategy of an independent healthcare regulator; and further assessing hospitals with a view to giving them authorisation under the new regulatory regime • Evaluating and supporting the M&A strategy of a US medical products producer. The work focussed initially on quantifying the worldwide market and future growth rates for orthopaedic reconstructive products, identifying synergies with merger partner and formulating the future plan for the combined entity. When acquisition turned contested, returned to evaluate potential responses to the other bidder • Prior to joining McKinsey, Toby worked with the National Health Service in the UK as a knowledge manager. Toby has obtained an MPhil in Byzantine Studies and a BA in Modern History from Oxford University.

LON-ZZE856-20081209-Health Systems Perspectives & Qualifications Deepak Khandelwal • Deepak Khandelwal is a Principal in the Toronto office of McKinsey & Company. He co-leads McKinsey's Canadian Healthcare practice and is a leader of the Firm’s Operations practice. His client work focuses on strategy, operations, and organization issues across a wide range of industries including customer care, healthcare, and retail. • Deepak’s recent study experience includes: • Improving patient access and flow (ED-GIM) at several Canadian hospitals and thereby increasing patient and staff satisfaction • Determining the quantitative and qualitative benefits of IT investments in a healthcare region • Diagnosing and implementing solutions to increase CT/MRI throughput via operational process improvements • Improving the effectiveness of support functions in a North American hospital • Leveraging lean principles to improve the store operations of a retailer • Improving the process operations of a foodservices company • Developing the customer contact centre strategy for a healthcare company • Improving the financial performance of the customer service division of a North American financial institution • Developing and implementing a new business strategy and organization for a customer care service provider • Developing knowledge management and talent management strategies for a North American institution • Prior to joining McKinsey in 1994, Deepak worked with IBM and ran his own company, Deepak Enterprises. He earned a BSc in electrical engineering from the University of Saskatchewan and an MBA from the University of Western Ontario. Deepak is married to a gastroenterologist and has two kids.

LON-ZZE856-20081209-Health Systems Perspectives & Qualifications Dr. Tilman Ehrbeck • Tilman is a partner in our Global Healthcare Payor and Provider Practice. He joined McKinsey in 1996 and has been based in New Delhi since 2005. • Tilman has served for-profit and non-profit health care providers and insurance companies on issue of growth, organization, business performance and service operations in North America and more recently India. • Before moving to India, Tilman led McKinsey’s proprietary consumer research on opportunities and challenges associated with the rise of consumer-directed health plans in the U.S. • Tilman is a German national. He holds a Ph.D. in economics and a B.A. in business administration.

McKinsey & Company: our perspectives on achieving impact in health system reform