The healthcare industry is one of the most fundamental parts of the global economy, comprising hospitals, the manufacture of drugs and medical equipment, medical insurance and a wide range of other services. The sector has proven resilient in the face of the onslaught of the COVID pandemic, and recent adoption of virtual services, biotechnology and smart devices point towards the huge opportunities to be reaped for increased digitalisation of healthcare.
It does also face very real challenges, including an increase in input costs, driven by rampant inflation. With the ever-increasing need for international cooperation in the healthcare space and the globalised nature of healthcare supply chains, the healthcare industry is vulnerable to foreign currency fluctuations. At Moneycorp, we can help mitigate this foreign exchange risk with our suite of currency exchange solutions.
What contribution does the healthcare industry make?
Healthcare spending in the UK has increased since 1990, when it was just 5.1%, to 11.9% in 2021. This increase was accelerated following the onset of the Coronavirus pandemic; government health spending grew by 21.9% year-on-year in 2020, with only Estonia (23.5%) among European OECD countries increasing by a greater extent.
More than $8tn was spent on health in 2018 across 190 countries, which represents 10% of global GDP, with spending have grown continually since 2000. The global healthcare supply chain management market is also expected to keep expanding; the market is expected to grow from $2.05 billion in 2021 to $2.30 billion in 2022. The healthcare supply chain management market is expected to grow to $3.67 billion in 2026 at a CAGR of 12.4%.
It is very hard to gain a full measure of the contribution that the healthcare sector makes to the economy, however. Good public health can lead to positive gains in GDP in the long term through the positive impact that it has upon the economic productivity of the population.
How international payments and exchange rates can affect the healthcare industry
Healthcare is a truly global industry in every sense of the world, with its heavy reliance upon imported equipment, medicines and an international workforce. The COVID pandemic exposed the extent to which the healthcare industry depends upon globalised supply chains: there were constraints upon the supply of vaccines and medical supplies, because they were manufactured in a limited number of countries, and many products that could be produced locally required materials imported from China and India.
The healthcare industry’s need to source materials, medical supplies and vaccines from overseas means that it needs to purchase certain items in foreign currencies, which exposes the sector to fluctuations in currency rates, as well as possibly costly transfer fees from banks. Our specialists work alongside healthcare companies to reduce their downside risk from foreign exchange exposure, enabling them to accurately budget well in advance.
How we can help your business save money
Healthcare companies can rely on a cost-effective service that adds real value when they sign up for a Moneycorp business account. With 24/7 access to a secure online platform, you can process and manage all of the international payments that you may need to make.
We assign all of the healthcare companies with which we work an account manager who understands the ins and outs of their sector. They will help you to navigate the risks that currency volatility could potentially pose and provide a solution that is tailored to your business needs.
Our payment solutions allow you to make bulk payments for your business costs and overseas staff salaries, with more than 120 different currencies and over 190 countries to choose from. You can also use a range of FX tools, including currency forwards, FX orders and spot contracts.
How has Brexit had an impact on the healthcare sector?
In the aftermath of the Leave vote in 2016, the exchange rate of the pound against the dollar currencies fell significantly. Whist more recent falls in the value of the pound are arguably unrelated to Brexit, the 31% fall in the value of the pound following the referendum result created a series of challenges for the National Health Service and other healthcare providers. With at least half of the products used in the NHS originating from outside of the UK, in countries such as Europe, Switzerland and the USA, the NHS had little choice to pay more for key equipment as suppliers increased their prices to protect themselves from a weak pound. According to the management consultancy firm Akeso and Company, the bill could have been as high as £900m.
You can minimise the impact that Brexit has on your bottom line with our specialist service, which can save you save money on international transfers – and ultimately expand your business beyond the borders of the European Union.
Keep up to date with the latest Brexit-related news and the impact that it is having on the currency markets via our Brexit Hub.