Rising health care costs, ageing populations and changing lifestyles in emerging economies are stoking demand for medical technology (medtech) solutions. These entail not just smart devices that remotely monitor and transmit biometric data, but any instance of technology that helps to deliver health services. These initiatives are happening everywhere, but there are significant differences in the speed and scale of medtech adoption across emerging markets.
UBS Investment Bank estimates that the emerging markets health sector will grow 6.3% annually over the next decade – double the speed of developed markets – as governments make up for historic underinvestment. Emerging markets routinely spend less than 10% of GDP on health care, compared to around 15% in developed nations, but are working to reduce the deficit. Ageing populations are a catalyst, and the UN estimates that by 2030, the 65-and-over demographic in emerging markets will rise to 15% of the population, up from 10%.
Concurrent with the rise in elderly patients needing care, diagnosis of non-communicable diseases (NCDs) is expected to increase. This is due to urbanisation and sedentary lifestyles accelerating the incidence of cancers, cardiovascular and chronic respiratory diseases, and diabetes. As NCDs demand longer and more expensive treatment than many other illnesses, emerging markets are investing in cost-effective medtech solutions to improve root cause analysis and patient care, while simultaneously reducing the rate of readmissions.
Digitisation is a critical first step towards achieving medtech synergies, facilitating the adoption of standard health care industry practices in order to reduce waste and improve analysis. In many countries in Africa, however, obtaining a patient’s medical records can often be difficult. The process has inspired solutions such as the KEA Medicals digital health platform, under which 50,000 patients from six African countries currently maintain their medical information, having created Universal Medical Identity (UMI) accounts. Once signed on, each patient receives a printed QR code that embeds their UMI code, which allows doctors to scan their patients for information at the point of delivery. Some 1700 medical professionals are connected to the network.
Such innovations, while effective, are no substitute for government-led programmes to digitise medical records, otherwise known as electronic health record (EHR) systems. Mexico aims to implement EHR across its hospitals by 2020, and recently announced the activation of HarmoniMD, a cloud-based EHR system, at Fundación de Cáncer de Mama (FUCAM), a breast cancer foundation that provides specialist care services. The system is expected to improve understanding of incidence, vaccination rates and other health occurrences.
US-based market research company BCC Research estimates that the global medical devices market will grow to $674.5bn by 2020, up from $521.2bn in 2017. At the same time, emerging markets are earmarked to increase their share of these revenues from less than 25% to more than one-third. This has been driven by innovations in smart technologies enabling higher rates of home care, and by a push towards multifunctional devices and holistic biomedical data, consequently lowering costs across the industry.
In practice, these devices enable projects like Khon Kaen Smart Health in Thailand, an integrated smart health initiative centred on Khon Kaen Provincial Hospital. This medtech solution incorporates a smart ambulance service that uses GPS to coordinate patient pick-up, coupled with real-time video and data transmission to prep the hospital ahead of patient delivery. It also includes a sensor platform that monitors the activity and condition, including the blood pressure and sugar levels, of elderly residents with chronic diseases, enabling them to remain at home. The data is then integrated with the patient’s EHR information.
Khon Kaen employs a multi-stakeholder approach to patient care, which is increasingly the norm amid an ongoing redefinition of the health care value chain. Traditional innovators like pharmaceuticals, hospitals and medtech giants like GE Healthcare and Medtronic are increasingly partnering with bulk buyers, including health insurers and government entities, accelerating a shift towards centralised repositories of health data. These traditional stakeholders are also vying for business with tech companies that make smart predicative analysis and monitoring tools. VC Rock Health reports that digital health companies in the US alone raised almost $6bn in 2017, and had secured a further $6.8bn by the end of the third quarter of 2018.
Risks & Challenges
The path to medtech adoption is often impeded by cultural, structural and regulatory factors. In the UAE the sector is undergoing a wave of consolidation and specialisation in reaction to over-investment in hospitals during the first half of the decade. Health care providers are focusing on their bottom line. “The health care sector in the UAE needs to develop their focus on providing value-added health care,” Majid Kaddoumi, vice-president and regional managing director, Central and Eastern Europe and MEA for Medtronic, told OBG. “For the most part, health care providers think about reducing costs, without putting any thought into the overall outcome for the patients.”
Additionally, the benefits resulting from adoption of artificial intelligence-enabled procedures are not always immediately apparent. According to David Hadley, CEO of Mediclinic Middle East in the UAE, productivity gains are currently outweighed by doctors having to maintain existing notes while also entering data into hospital systems. “Little by little, though, the amount of stored data will serve more to help doctors rather than just giving them more work. The biggest potential is expected to be in diagnostics,” Hadley told OBG.
Another challenge is that information is not currently shared as effectively, seamlessly or securely as it could be, according to Michael Schelper, CEO of Cerner in the UAE. “However, this has a solution: blockchain. This technology will allow for decentralising the ownership of data and letting individuals own their own data, which in turn will allow for it to cross borders in an efficient way,” he told OBG, cautioning that this technology is still in the early stages of development.
Asia is the fastest-growing region in the global medtech market, fuelled by the confluence of ongoing public health reforms, a rapidly expanding private sector and revenues from a thriving medical tourism industry. UBS notes that China and India are primary engines of emerging market health care growth. The former committed to a reform programme that aims to develop a $1.29trn health care industry by 2020, marking a seven-fold increase from 2011. Both countries experience a discrepancy between the standard of care provided in urban and rural areas, and are committed to improving preventative programmes and growing the availability of mobile health care.
Regarding public health care, Thailand’s programme to transform itself into an innovation-driven digital economy – under its Thailand 4.0 vision – has resulted in a new eHealth initiative, which maps national development to 2027. Targets include EHR adoption, the provision of high-quality telemedicine systems, medtech innovation and smart health care provision in rural areas, which are driven by a focus on digital education for all health care stakeholders.
In Indonesia the government is making inroads into providing universal health insurance operated by an authorized body, the Healthcare and Social Security Agency (BPJS Kesehatan), with approximately three-quarters of the population now covered by the scheme. Yet there is still a wide education gap among much of the population. “It is important to note that most Indonesians are health care illiterate, do not believe in primary prevention, and do not really understand how insurance works. It is only after they are sick and need high-cost health care, such as an operation, that they would pay the premium in hopes that they could get the benefit right away,” said Ronny Adhipurna, president director of Medikaloka, a Jakarta-based health and wellness centre that provides care before and after hospitalisation to millions of Indonesians who travel to Singapore and Malaysia for medical reasons. However, according to Ade Tarya Hidayat, president of AbadiNusa Group, an exporter of sphygmomanometers and other medical equipment, there are signs of improvement. “Technology increasingly plays a role in almost all processes, including patient registration, data monitoring, lab tests and self-care tools. More hospitals are implementing e-health records, telemedicine and tele-consultation, where patients and physicians are able to interact online and share the same portal technology to access medical records,” Hidayat told OBG.
This progress has been uneven, and Indonesian patients often need to travel to Singapore or Malaysia for treatment. “Foreign investment specifically aimed at developing specialty hospitals, the manufacturing of medical consumables and disposable products, and better training initiatives for local doctors will certainly make Indonesia a more reliable and appealing treatment destination,” Hidayat added.
Middle East Reforms
The Middle East is set to experience the benefits of investment in digitisation as the introduction of mandatory insurance and e-health systems set the stage for improved patient outcomes. UAE Vision 2021 emphasises the importance of preventative medicine in reducing cancer and lifestyle-related diseases. The government has set aside more than $500m to fund a diverse assortment of innovations in priority sectors, including health care, and has already spent $232m on funding advancement of digital care between 2014 and 2016, aiming to become a regional leader in the delivery of smart medtech. “The National Unified Medical Record Project, now renamed MyCare, is an important initiative that aims to make available individual data to all health care providers,” Schelper told OBG. “Proper data management will lead to a decrease in the cost of health care by improving preventive medicine and well-being. This, in turn, will drive down the high cost of insurance premiums.”
In Qatar, the public sector is responsible for delivering the vast majority of health care services, and the country is facing a set of typical challenges. “We are experiencing an increase in the prevalence of largely preventable lifestyle diseases, among them obesity, heart disease and Type 2 diabetes,” Hanan Mohamed Al Kuwari, managing director of Hamad Medical Corporation, a non-profit health care provider, told OBG in 2018. Consequently, Qatar’s National Health Strategy 2018-22 and Public Health Strategy 2017-22 each focus largely on preventive care. The former sets a series of 2022 targets, including building a national knowledge platform that will improve access to data, enabling intelligent analysis of population health, and establishing a system of clear legal frameworks to facilitate access.
Overall, the trend of increasing specialisation in the region is considered to be driving higher quality that can potentially counter problems associated with high costs, particularly when supported by potential income from medical tourism. “Medical tourism has a huge growth potential in Dubai,” Dubai Healthcare City Authority’s executive director, Omar Oumeish, told OBG, outlining a detailed plan to create a one-stop digital shop for medical tourists that will help fund ongoing high-value research and development.
Latin American Progress
According to a recent study by the US-based Population Reference Bureau, by 2030, some 81% of deaths in Latin America and the Caribbean will be caused by the four major NCDs: cardiovascular disease, cancer, diabetes and chronic respiratory diseases. Governments are racing to address this challenge, and have increased per capita health expenditures throughout the region, with Brazil’s increase of 31% between 2008 and 2014 being at the lower end of the spending spectrum.
Brazil is also seeing a burgeoning market for medtech start-ups emerge. Entrepreneurs are looking to capitalise on the void created by the market, which spends $42bn annually on private health care, but which loses more than one-third of that to inefficiencies. Their work is being assisted by a government initiative to digitise health records in more than 40,000 public health clinics by the end of 2018. This will generate savings of $6.8bn. The initiative will help address a shortfall of more than 150m out of 208m Brazilians who did not have electronic medical records as of the end of 2017.
Politicians are increasingly open to supporting struggling public health systems with private investment. A good example of this is Brazil’s decision to open its hospitals to private investors in 2016. Foreign suppliers of medtech devices are also in play due to gaps in local provision, with breathing aid technology, X-ray technology and vital sign equipment demanded in Mexico, Colombia and Brazil. At the inaugural Digital Health Forum Mexico in March 2018, Julio Sánchez y Tépoz, general commissioner of Mexico’s Federal Office for Protection Against Sanitary Risks, the regulatory body for health technology, emphasised the state’s commitment to deregulating the space for medical devices.
In Africa, a lack of basic hygiene remains the leading cause of death, going some way to indicate the depth of the challenges facing the continent’s health care sector. Nonetheless, while there continue to be substantial barriers to further development in certain areas, there are opportunities for investment in local health care, led in most cases by private provisions made to expatriate populations.
As a result of sustained investment, a commitment that was confirmed in its Finance Law for 2019, Algeria is well-placed to benefit from medtech. Legally mandated free universal health care was also implemented, which allows the Ministry of Health to support a contract for the provision of radiotherapy equipment with Varian Medical Systems, under the Anti-Cancer Plan 2015-19, according to Mourad Belkheyar, interim director-general of Varian Healthcare Algeria. Infrastructure is already well-developed and provides national coverage, an element that is unique in Africa, according to Haissam Chraiteh, director-general of Sanofi Aventis Algeria. “Local authorities are building an ecosystem that takes into account all aspects related to the health sector, including production of drugs, prevention, training, research and clinical studies [while] incentivising foreign partners to expand their footprint,” he told OBG.