Healthcare - EIU · different sectors within the healthcare industry, and among different stakeholders in healthcare. “We need to be cognizant of the fact that there are different

Digital Health Breakfast Briefing in Asia 2017 Singapore

Healthcare

EXECUTIVE SUMMARY

DIGITAL HEALTH IN ASIA February 22nd 2017 • Breakfast Briefing, Singapore

an Economist Intelligence Unit business Healthcare

2


EXECUTIVE SUMMARYTHREE FOCAL POINTS FOR HEALTHCARE COMPANIES IN SHAPING THEIR DIGITAL HEALTH STRATEGIES FOR ASIA

CONSUMER POWER Consumers and end users are becoming more proactive about deciding what is important to them, and they want to be involved in contributing to the whole process of care. A single consumer has a sphere of influence larger than just him- or herself, as Chee Hew, points out: “If I am looking for the right doctor, it is not going to be only for myself, but also for my parents.” For companies, this means that it has become necessary to engage consumers around a diverse set of needs.

It has also become important for healthcare companies to develop a deep understanding

of how consumers are using their products. In healthcare, getting insights on physicians’ behaviour and their interaction with products and solutions can be challenging. As Ms Hew shares, “When companies approach doctors to ask what they need, the physicians are not going to tell them about the products that they don’t use right now. But if we can really observe the doctors closely, we can see what products can align with their workflows and how they deliver care to patients.”

Healthcare companies can take a cue from how consumer companies have been extracting consumer insights. Samsung, for example,

“Healthcare companies need to incorporate the focus on driving patient-centric outcomes across the whole value chain, from research to commercialisation.”

Rie Ruby Senior Associate

Consultant Clearstate,

The Economist Intelligence Unit

Consumer health delivery innovation and frugal health are concepts that are quickly rising in prominence in Asia. The opening presentation by Chee Hew, Senior Principal Consultant at Clearstate, The Economist Intelligence Unit, highlighted three key themes that underlie why these concepts are catching on in Asia, and how companies that truly understand and strategise around these core issues can add value in the digital health space.

3


tracks how consumers use its mobile devices and televisions; this can provide valuable information to help the company to understand the ways that its products are used, thereby assisting it in developing new and improved services and products. “The same way that consumers go about picking the best phone or the best television, patients are looking at picking the best care,” says Ms Hew.

BUSINESS MODEL EVOLUTION THAT FOCUSES ON PATIENTS AND PHYSICIANSRather than focusing on a single drug or device, to be successful, companies need to think about the solutions that benefit patients and physicians in the long run. One startup in China, Trusted Doctors, got its formula right by helping to connect patients to high-quality care by helping physicians build their own private practices through its platform. The company’s model is interesting for two reasons: it helps patients who find it challenging to seek out doctors who can provide the care that they need; and it helps physicians raise the quality of care through its platform which provides them with tools to improve the management of their clinical work and professional learning.

However, this business model would not be feasible without government support. The loosening of regulations in several provinces has permitted physicians working in hospitals to practise privately – doctors do not need their hospital’s approval to practise outside the hospital for one day a week. About 400,000 physicians, or roughly 10% of all doctors, across China have begun to build their private-practice business through the Trusted Doctors platform since it started up in 2013.

THE ECONOMICS OF DIGITAL HEALTH The question of the economics of digital health solutions—who will be financing their use, and what are the benefits that they bring to different stakeholders—often emerge during conversations about launching these solutions into the market. “If you do not address the economics of how they are going to operate or how they will benefit, there will be no buy-in from the stakeholders to implement or use such programmes,” said Ms Hew.

Companies will need to consider how their digital health products and solutions add value and costs at all levels: patients, physicians and payers. For payers, the economic argument is straightforward: How much money am I saving, and am I really providing better care for the same amount of money? Meanwhile, consumers who are paying out-of-pocket for medical services care about how their entire healthcare experience could be augmented by these new solutions.

In the following section, The Economist Intelligence Unit and a panel of industry executives take a closer look at how companies are addressing these themes and at the progress of digital health initiatives in Asia.

4


PANEL DISCUSSIONWHAT DIGITAL HEALTH STRATEGIES AND INITIATIVES CAN RESONATE WITH MARKETS IN ASIA?

DIMENSIONS OF DIGITAL HEALTHEach panelist brought to the discussion their own distinctive notion of digital health, leading to a richer understanding of how different players in the digital health ecosystem think about and define digital health.

Ms Olszewski offered two ways of looking at digital health. The first is from an organisational point of view: “When I think about digital health, it’s about digital innovation across the whole value chain of healthcare of a pharma company. I think about everything from our

“As a pharma company, just launching a drug is not enough anymore. We have to think about how that drug is being used in the overall healthcare scenario and what is the actual outcome.”

Julie Olszewski Executive Director

MSD Global IT Hub

Healthcare is a complex space that does not lend itself readily to disruption in the same way that the rise of Uber has shaken up taxi services. Through the lens of a panel of speakers from the pharmaceutical and medical technology sectors and a physician who is no stranger to digital health innovations in clinical care, the panel sparked a wide-ranging conversation around the current reality and future of digital health in Asia.

Moderator:Ivy Teh, Global Managing Director, Clearstate, The Economist Intelligence Unit (Healthcare)

Panelists:Lawrence Ho, Clinician Innovator, National University Health System (NUHS), SingaporeJulie Olszewski, Executive Director, MSD Global IT HubDavid Vu, General Manager, GE Healthcare Digital, Asia-Pacific

5


R&D activities—understanding disease and looking for new therapies—all the way through our manufacturing process and to helping our consumers having access to our products, and how we make them digital.” Also contained in this holistic understanding of digital health is the other viewpoint: the consumer aspect, which is a key point of emphasis for digital health.

Professor Ho emphasised the need for an outcomes-based understanding of digital health. This can be broadly categorised into four areas: prevention, prediction, precision and participation. Different stakeholders have varying degrees of influence over each outcome. Both physicians and patients/consumers play significant roles in contributing to the prevention of diseases. However, physicians control the two areas of prediction and precision in healthcare. In Asia, physicians also wield a strong influence over patients across all areas of healthcare.

Importantly, the healthcare industry will need to de-emphasise the ever-evolving technology platforms and shift its focus towards solutions.

Mr Vu highlighted how hospitals in Asia are moving away from thinking about devices and equipment as ends in themselves. Increasingly, as medical practice is reoriented towards outcomes, hospital executives are talking to their vendors in terms of the desired outcomes in their health systems. This has influenced how medtech companies like GE Healthcare need similarly to move beyond delivering department-level solutions and drive their solutions towards outcomes. “For me, digital health is about having devices, analytics and software that deliver outcomes that matter to whatever stakeholder—either the user or the patient. The confluence of those three—devices, analytics and software—is driving outcomes,” said Mr Vu.

IS ASIA READY?Assessing Asia’s readiness for the adoption of digital health is not a straightforward matter. A highly fragmented healthcare market in the

region means that the challenges for digital adoption vary from country to country, between different sectors within the healthcare industry, and among different stakeholders in healthcare.

“We need to be cognizant of the fact that there are different sectors in healthcare which are shaping up differently. Reimbursement models and the digital maturity of the entire system are evolving at different speeds in different countries. We have to look at these markets separately,” said Professor Ho.

For instance, the industry needs to approach the primary-care market differently from the specialty care market. Professor Ho likened the differences in the two healthcare markets to the distinction found between products in the consumer information and communication technology (ICT) industry, “Primary care is centred around the patient and the home, while hospitals, in my mind, are what I call ward-centric. Similarly, desktop devices are centred around the office, while mobile devices are designed for users on the go. There are two different markets to be addressed.”

However, unlike in consumer electronics markets, adoption will remain a challenge in healthcare until reimbursement for digital health solutions is made available for patients. Governments, payers and providers remain to be persuaded that the benefits of digital technology for patient outcomes and care delivery justify the costs.

Solutions to these challenges could lie outside the traditional healthcare space. One important development in this regard is that Asia’s digital health startup community is strengthening. From the hundreds of digital health startup companies around the world that MSD has scouted for partnership opportunities, Ms Olszewski notes a key differentiating point found in such startups in Asia: their strong partnerships with hospital networks. Companies need to begin driving collaboration both across and beyond healthcare institutions.

“Information needs to flow more easily from one clinician to another. If we look at the treatment of cancer, it’s no longer just an oncologist that is providing the prescription. It involves many actors—radiologists, oncologist, pathologists—who all need access to data.”

David Vu General Manager,

GE Healthcare Digital, Asia-Pacific

6


DIGITAL CHAOS DRIVES SUCCESSRather than being an impediment to digital health adoption, could messiness in healthcare systems actually enable it? This was one bold suggestion put forward by the panel.

“You need a very disordered system to succeed, ” said Professor Ho. “Then later on, you evolve to an ordered system. I think digital health is going through that shift from disorder to order. Countries such as China and India are likely to succeed faster in the consumer market because they are a bit more disordered than countries like Singapore.”

“In Singapore, where the health system is very regulated, digital health initiatives will probably find better success in areas of deep technology, such as precision medicine, where regulation plays an important role to ensure safety,” continued Professor Ho.

WHEN THE SOLUTION TO THE PROBLEM BECOMES A PROBLEMDigital technology creates new challenges alongside the potential benefits that it brings to healthcare. As Mr Vu points out, the technological ability to leverage data in order to improve outcomes comes with its own set of challenges in Asia, “We are very much in a protectionist phase where data—especially patient data—cannot transverse national boundaries. We need to have one data centre that serves the region. To do that, we need to address the issue of data sovereignty.”

The realisation that partnerships are essential in driving digital health has really hit home in the healthcare industry. “We can’t do it alone. We need to do this as an ecosystem, and now we are trying to figure out what that actually looks like,” said Ms Olszewski.

However, partnerships are becoming increasingly challenging to manage as the number of partners grows. “We try to partner a hospital and a tech company, then a startup company and a university. Suddenly, I have six people at the table. And everybody has a slightly different

agenda,” said Ms Olszewski, illustrating the complexity of the digital health ecosystem that companies encounter when trying to engage other stakeholders. This increasing complexity of digital health initiatives and collaborations means that healthcare companies need to be able to navigate relationships with different partners and unify contrasting perspectives and concerns around a common goal.

One crucial partner that healthcare companies must engage successfully if digital health is to take off is the physician group. Professor Ho, himself a physician, points out that physicians can be the hardest partners to engage for digital health initiatives among stakeholders. “Unlike in other industries like technology, where engineers are paid to disrupt, physicians carry out medical procedures and pay for the equipment and devices they use. So they may [well] ask why they should be disrupted,” said Professor Ho.

DISPLACE, NOT DISRUPT“Physicians are valued for their work, and they don’t want to be disrupted, because that will diminish their value,” said Professor Ho.

For physicians, the drive to maintain their own value and relevance can perpetuate a lack of innovation in healthcare. Professor Ho went on to offer his understanding that it is for this reason that the healthcare system has not been disrupted.

Companies need to work with physicians and successfully engage them. To do that, they need to ensure that physicians continue to be valued even as the adoption of digital technology moves ahead.

To design the right digital health solutions, the industry needs to understand the point of view of physicians and to become clear on what they really want. “There needs to be a lot more ‘look and listen’, and the design thinking aspect of how to approach digital health,” said Ms Olszewski.

“The consumer and the government have to recognise where the value lies with digital health. When that happens, a new value system will be created within healthcare.”

Lawrence Ho Clinician Innovator

National University Health System (NUHS),

Singapore

7


Rather than disrupting the workflows of healthcare professionals, digital health solutions should be designed to help to modify workflows in order to improve them by eliminating gaps in the healthcare system. “If you introduce a step within the system, which is what digital health is all about, you must [also] remove a step. Otherwise, it adds another layer, and also adds to the workload of healthcare professionals,” said Professor Ho.

MSD IT helped to tackle the problem of antibiotic resistance in India by simplifying the steps involved in helping physicians to make the right decision about which antibiotic to prescribe. This was done by making the existing hospital protocols and decision trees, contained in a thick manual, available digitally for physicians who had too little time to decide which antibiotic to prescribe. “At MSD, we call this our digital antimicrobial stewardship,” shared Ms Olszewski. “The programme has not only gained popularity in India, we received requests for the programme in Vietnam and Indonesia because they face similar challenges. It is a programme that needs customisation for each hospital since each hospital has a different distribution of infections coming through it.”

THE NEXT FIVE YEARSA positive outlook on the digital health market was shared by the panel. “It will just be a matter of 5-10 years before the healthcare system and technologies will converge and the challenges on reimbursement get sorted out,” said Professor Ho.

It is not just physicians and patients who are embarking on an exploration of new digital technologies. Healthcare businesses and their executives have to start synchronising their efforts with ongoing developments in digital health. Healthcare companies need not only to influence external stakeholders, but also to inaugurate an internal cultural shift among their staff.

For further information about the issues raised in this executive summary please contact us at [email protected]

LONDON20 Cabot SquareLondonE14 4QWUnited KingdomTel: (44.20) 7576 8000E-mail: [email protected]

NEW YORK750 Third Avenue5th FloorNew York, NY 10017United StatesTel: (1.212) 554 0600E-mail: [email protected]

SINGAPORE21 Biopolis Road 06-02 NucleosSingapore 138567Tel: (65) 6715 9200E-mail: [email protected]

SHANGHAI19/F Ruijin Building205 South Mao Ming RoadShanghai 200020ChinaTel: (86) 21 6473 7128E-mail: [email protected]

TOKYOYurakucho Denki Building North Tower 15/F1-7-1 Yurakucho, Chiyoda-KuTokyo 100-0006Japan Tel: (81) 3 5223 2181E-mail: [email protected]

Healthcare

While every effort has been taken to verify the accuracy of this information, The Economist Intelligence Unit Ltd. cannot accept any responsibility or liability for reliance by any person on this report or any of the information, opinions or conclusions set out in this report.

Cover image - © Maksim Kabakou/Shutterstock

Documents

Healthcare - EIU · different sectors within the healthcare industry, and among different stakeholders in healthcare. “We need to be cognizant of the fact that there are different