The magazine for healthcare administrators and policy makers
Display to 30 June 2017
BRIDGING INNOVATION the
FIND OUT HOW HEALTHCARE PROFESSIONALS ARE DEALING WITH INFORMATION ASYMMETRY
THREATS TO THAILAND’S HEALTHCARE SCHEME p4 HONG KONG’S BIG SPEND ON DRUGS p6 INDONESIA’S BURGEONING PRIVATE HEALTHCARE DEMAND p20 THE PHILIPPINES IS FACING HEADWINDS IN RAISING COMPENSATION FOR DOCTORS p26
DR PHUA TIEN BENG CEO, MOUNT ELIZABETH HOSPITAL p16
DR CHUI TAK-YI, CEO, UNITED CHRISTIAN HOSPITAL p18
Healthcare Asia Forum
Our immuno-oncology development program is one of the fastest growing in the industry. — Reshma Rangwala, MD, PhD Senior Principal Scientist, MSD Oncology Clinical Research
TURNING IDEAS INTO RESULTS
MSD Pharma (Singapore) Pte Ltd 150 Beach Road #31-00 Gateway West Singapore 189720 Tel: (65) 6508 8400 Fax: (65) 6296 0005 http://www.msd-singapore.com Copyright © 2015 MSD Pharma (Singapore) Pte. Ltd., a subsidiary of Merck & Co., Inc., Kenilworth, NJ, USA. All rights reserved. ONCO-1157244-0000 10/15
FROM THE EDITOR Welcome to the ninth issue of Healthcare Asia! In this issue, we delved into Indonesia’s hunger for private healthcare. Increasing wealth and expanding health concerns, amongst other factors, will drive up healthcare expenditure in the country. Private hospital groups are now racing to open new hospitals to serve more patients who will pay to either access higher quality healthcare services or to avoid increasingly packed public hospitals. Will Indonesia be able to keep up?
Publisher & EDITOR-IN-CHIEF Tim Charlton PRODUCTION Editor Karen Lou Mesina GRAPHIC ARTIST Elizabeth Indoy
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We have also sat down and spoken to Singapore-based Mount Elizabeth Hospital’s CEO Phua Tien Beng and Hong Kong-based United Christian Hospital’s CEO Dr Chui Tak-yi as they discussed their respective hospitals’ future plans and current challenges. We have officially kicked off the 2017 Healthcare Asia Forum’s Manila leg on 16 February 2017 at the Shangri-la Makati. Over 50 key representatives from both the public and private sector flocked to the event to hear from our speakers and panelists. We have included a comprehensive event coverage to fill you in what transpired during the forum. We hope to see you in Bangkok and Singapore. As always, we wish you the very best of health.
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Distributed to all CxO, board levels, doctors, and healthcare professionals of major private/public hospitals and health ministries in ASEAN and Hong Kong.
HEALTHCARE ASIA 1
INTERVIEW 16 CEO Mount Elizabeth Hospital’s CEO takes medical appointment to WhatsApp
Profile 18 Feature United Christian Hospital boosts geriatric care amidst
REPORT 22 cOUNTRY Indonesia’s private
rapid ageing in Hong Kong
FIRST 04 Thailand healthcare schemes set for transformation
HEALTHCARE INSIGHT 14 How will Asia close the healthcare innovation gap?
05 Taiwan announces new long-term
EVENT COVERAGE 26 The Philippines is facing headwinds in raising compensation for doctors
care services programme 06 Hong Kong’s big spend on drugs 08 India eyes increased health spending on elderly care
Published Tri-annually on the Second week of the Month by Charlton Media Group 101 Cecil St. #17-09 Tong Eng Building Singapore 069533
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To access the stories online, visit the website
FIRST its sustainability,” says Dr Phudit Tejativaddhana, assistant to the president at Naresuan University. “Although the old age dependency rate (number of people aged 65 and above per 100 population aged 15 to 64) of 13% in Thailand is relatively low, the rate is predicted to increase to 53.1% in 2050.”
RETAINING LOCAL HEALTHCARE TALENT
Elvira SN Dayrit, DoH
Elvira SN Dayrit, director at the Department of Health spoke at the 2017 Healthcare Asia Forum and we took the opportunity to seek her thoughts on the local industry’s struggle to keep Filipino professionals working in and serving the domestic market. What can the healthcare industry retain Filipino professionals? The government has to improve its compensation packages. We have a lot of work to do in terms of streamlining our services so that residents can go to positions fit with their capabilities. We should also direct them to hospitals in need of doctors. We now have some sort of matching where we match the doctors to the specific needs of a hospital. In terms of private sector, they should come together. Our weakness is we do not know what is happening in the private sector. The government should start talking to these private hospitals because they will be affected should the government raise compensation. We are also now looking into tapping hospitals run by religious groups. What is the role of devolution in solving the shortage of healthcare professionals? Local govenrment units have to improve. Midwives are especially affected, given that they face geographical limits. Back when the system is vertical, we provide and reimburse transportation for them to be mobile. Some LGUs don’t allow them to be mobile. The problem is LGUs are seeing things on the governance side, rather than meeting the health needs of a community. However, if you make the system fully-vertical again, it would be very difficult to manage. There are currently talks on how to solve this.
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Transformation is underway but UHC may be left behind
Threats to Thailand’s healthcare scheme
hailand’s doctors have been pushing for the introduction of a co-payment scheme in the country’s universal health coverage (UHC) – however, it may take longer before they see this become a reality. Wei Zheng Ang, pharmaceuticals & healthcare analyst at BMI Research, notes that Thailand’s healthcare schemes will undergo a transformation. Schemes funded through general taxation, such as the UHC, will be the prime targets for reform. According to Ang, that the UHC is funded primarily through taxation provides the government with added incentive to manage the rising costs. Ang notes that changes will be introduced only gradually, reflecting the range of the complexities involved. Further, whilst doctors in the country have been pushing for the introduction of a co-payment scheme to the UHC, such a measure has yet to be introduced due to concerns that it will create financial barriers for lower-income patients. “Achieving universal health insurance has certainly made Thailand proud. However, the complex three-tier health insurance arrangements together with the increasing healthcare needs threaten
The complex three-tier health insurance arrangements together with the increasing healthcare needs threaten its sustainability.
Lower tax contribution Dr Tejativaddhana also notes that the significant increase of the proportion of aged population not only predicts a significant increase in health service demand, but also a significant decrease in tax contribution from this retired population. “In addition, more than 60% of the population are working in the informal sector in Thailand – a population that may not be subject to tax contributions,” he says. “These two key factors make significant increases of tax revenue by the Thai Government impossible in a long run, at least not at a rate that can match the increasing healthcare demands. It is clear that significant injection into healthcare expenditure to meet the increasing demand alone is not a feasible solution in Thailand. Efforts to improve the effectiveness and efficiency of service delivery are strongly recommended.” Simone Ghislandi, professor of health economics, department of socioeconomics, WU, Vienna, says, “Far from representing a populist policy, successful implementation of UHC is the lesson Thailand once taught the world. In view of its sheer benefits in health improvement and reduction in social disparities, we hope that UHC will be fully sustained and developed by the present and future governments.”
Reforms to shape expenditure growth
Source: BMI Research
FIRST Planned expansion of Taiwan’s long-term care system will encourage and attract private investment in facilities and services.
Playing catch up with healthcare innovations
Dr Annabelle R. Borromeo, St Luke’s
Dr Annabelle R. Borromeo, senior vice president & head of hospital operations at St Luke’s Medical Center shared with us the hospital’s strategies in catching up with healthcare innovation. High time for long-term care system
Hunger for long-term care
ith people over 65 years old representing 12% of Taiwan’s total population in 2014, up from 10.7% in 2010, demographic ageing is increasing pressure on government spending – highlighting the significance of the country’s proposal to expand its long-term care system. “Given public budget constraints, we anticipate the planned expansion of Taiwan’s longterm care system will attract private investment in facilities and services to meet the needs of the growing elderly population,” says Lily Wong, managing director, PwC. In mid-July
2016, Taiwan’s Ministry of Health and Welfare released a proposal for the expansion of its long-term care system, which will come into effect this year. According to The Economist, the health and welfare ministry estimates that the programme will require initial funding of around NT$20.8b (US$652m) in 2017, compared with a budget of NT$5.1b (US$165m) in 2016 for the current programme. The new ten-year “Long-term Care Plan 2.0” is an extension of the original plan that was approved by Taiwan’s cabinet in 2007.
How much should hospitals invest to keep up with healthcare tech? At St. Lukes, we do have patient experience officers, and they walked the patients through the continuum of care in the hospital. Some of them are really not that expensive. So for example, there are a lot of apps right now that are health related that can be incorporated into a continuum of care, process or product. Ah, but yes if we’re talking about IT or healthcare information systems.. These are quite substantial investments, but a way to move forward is to just get it in phases and that’s how some of the hospitals have been able to acquire these expensive systems. So there are creative ways, and innovative ways to acquire those.
The Chartist: SINGAPORE TO CASH IN ON ITS BALLOONING SILVER POPULATION A silver tsunami has come to Singapore as the number of citizens aged 65 years and above went from one in 11 in 2005 to one in eight in 2015. This is expected to increase further to one in six by 2020. In addition, hospital admission rate increases with age. John Cheong, analyst at Maybank Kim Eng, says that an ageing population is a structural growth driver for Singapore’s healthcare sector. This, along with its high-end medical infrastructure, will boost the industry as the bulk of the patients belong to the premium segment and are more inelastic to pricing and currency fluctuations. “Medical tourism revenue grew at a 10% CAGR in the last decade, to around SG$1b (US$711m) currently,” Cheong says.
Number of Singapore citizens aged 65 and above
Sources: Maybank Kim Eng, Population.sg
Hospital admissions increase with age
Sources: Maybank Kim Eng, Singapore Ministry of Health
HEALTHCARE ASIA 5
Hong Kong’s big spend on drugs
ey Big Spender could be the theme song for Hong Kong’s drug makers as they revel in higher pharmaceutical spending by consumers in the region. According to Ang Wei Zheng, pharmaceuticals & healthcare analyst, BMI Research, public spending on drugs in March 2016 rose 7% year-on-year to HK$5.7b (US$736m), up from HK$5.3b (US$686m). Notably, drug spending from the special administrative region’s Samaritan Fund, established to finance the health expenditure of low-income people, rose by a significant 12% yoy to amount to HK$269m (US$34m). No way but up In aggregate, public funding of pharmaceuticals in Hong Kong rose by 7% yoy to HK$5.9b (US$770m) for 2016. “We project top-line medicine spending in the special administrative region to grow from HK$9.6b (US$1.2b) in 2016, to HK$13.4b (US$1.7b) by 2021 and HK$18b (US$2.3b) by 2026,” Ang says. “Despite its small pharmaceutical market, we continue to view Hong Kong as attractive to innovative drugmakers, given its well-developed regulatory regime and higher per-capita medicine
Dr Gerardo Manzo, Philippine Heart Center
Small market, big spend
spending at US$169 - as compared to other Asian countries such as China or the Philippines in 2016.” Hong Kong authorities are expected to adopt an increasingly austere position. This is reinforced by the fact that pharmaceutical spending is the second largest area of spending for the administration, accounting for 10% of the total in FY2015/16. As a consequence, high-value pharmaceuticals will face significant difficulties getting listed on Hong Kong’s drug formulary. For the full year of 2016, the Drug Advisory Committee (DAC), which evaluates listing applications, rejected a total of seven applications on the basis that the ‘justification of the treatment’s cost in relation to its benefits is insufficient’.
Digital health VC funding reaches all-time high ASIA
Venture capital (VC) funding in the digital health sector, including private equity and corporate venture capital, came in at US$5.1b in 622 deals in 2016. According to the Mercom Capital Group, this is a new record for the sector which has received US$18.5b in VC funding since 2010. 1,115 investors also participated in rounds in Healthcare IT companies in 2016, compared to 923 in 2015. The top-funded health IT technologies include mobile apps (US$1.3b), wearable sensors (US$592m), data analytics (US$574m), and telemedicine (US$528m). Whilst VC funding increased, total corporate funding in healthcare IT companies dropped 30% to $5.6b in 2016. “VC funding bounced back after declining in 2015,” comments Raj Prabhu, CEO, Mercom Capital Group. “Digital health public companies on the other hand continue to struggle.”
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Dr Gerardo Manzo, director at the Philippine Heart Center, sat as a panelist at the 2017 Healthcare Asia Forum. He shared insights on cost-cutting for healthcare firms.
Mobile apps are heavily funded
Struggling digital health public firms
Hong Kong is attractive to innovative drugmakers given its welldeveloped regulatory regime and higher percapita spend.
How do we ascertain that healthcare quality is high despite cost reductions? You need to have the committment of the institution to provide quality care. So it is something that can be mandated. When you talk about quality, it involves everyone in the organisation; committed to delivering best care to our patients. So we need to keep our focus, it’s not something like a Philhealth can say or Department of Health can say “Do this.” In the Philippine government right now, we have what they call a performance based bonus, it is not specific for healthcare, it is a performance based bonus for all executions. But the healthcare institution will define the quality parameters that they’re expecting to meet. And if you meet it, you get a bonus. What are some cost-cutting strategies that the private healthcare firms can do? I think more than the strategy, it is really the motivation for them to do cost reduction. For a private hospital, it is to be able to have profits at the end of fiscal year. For a government hospital, it is to be able to serve as many people using limited resources. So, there will be very many ways of doing this but if they keep their focus and they keep it clean, so public hospitals use the money wisely so you can take care of more. Private hospitals will have to use their money wisely so that they can declare dividends to their stakeholders.
India eyes increased health spending INDIA
f India is to eliminate diseases such as leprosy, measles, and tuberculosis by 2025, the country will have to start increasing its health budget sooner rather than later. The current spending on healthcare is below the average of 6.5% of GDP expected for the Asia and Australasia region. “The healthcare sector in India has struggled for long with multiple health indicators, including high maternal mortality rate (MMR), high infant mortality rate (IMR), and low life expectancy rates,” says Nitin Atroley, partner and head of sales and markets at KPMG India. “However, the situation has drastically changed over the years and the healthcare sector is rapidly contributing to both employment as well as revenue.” Charu Sehgal, LSHC industry leader of Deloitte India, attributes this growth mainly to private players. “Public spending has remained quite low and resulted in inadequate infrastructure and manpower in public health facilities, especially in rural areas,” she adds. In response to this, reports from The Economist show that under the Union budget for fiscal year 2017-18, allocation for health will rise by more than 20% to Rs48b (US$7b) from the previous year’s estimate
of Rs38b (US$568m). Additionally, Finance Minister Arun Jaitley announced an increase of Rs31b (US$464m) towards expenditure on the National Rural Health Mission (NRHM), a scheme that aims to provide accessible, affordable, and quality healthcare to the rural population. Growing demand, supportive policies Optimism also remains as growing demand, supportive policies, innovation, and increasing investments direct the growth of the sector. The India Brand Equity Foundation (IBEF) reports that these factors, which include rising income, ageing population, growing health awareness, precautionary treatments, and medical tourism, are set to ensure the growth of the sector from here on out. IBEF says that the economic advisory body of the government NITI Aayog has allocated US$55b to the Ministry of Health and Family Welfare under the 12th FiveYear Plan from 2012-2017. The plan, which focusses on providing universal healthcare, strengthening healthcare infrastructure, and promoting R&D, hopes to establish “a system of Universal Health Coverage (UHC) in the country that means each individual would have assured access to a defined essential range of medicines and treatment at
The doctor is in: App lets you book with just a click
FindDoc, Hong Kong’s first multilingual, centralised online healthcare information and appointment platform, has been creating a comprehensive system since 2012. It aims to contribute to the development of a supportive medical ecosystem. The booking app has the function of real-time appointment booking, providing users convenient and flexible access to professional medical information and services. Aside from a database of 6,000 medical practitioners, FindDoc has over 400 videos made in collaboration with over a hundred healthcare professionals on its video platform FindDocTV. At the same time it is a partner of the Hong Kong Sanatorium & Hospital and offers free faecal occult blood tests to users aged 45-65. FindDoc is also working closely with Silence, a nonprofit organisation that serves the hearing impaired. FindDoc has 4.3m visits per year.
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EVEN HEALTHCARE DISTRIBUTION
Dr Jesus Jardin, Philippine Hospital Association
Dr Jesus Jardin, member, board of trustees at the Philippine Hospital Association, shared that to even out the distribution of healthcare professionals, incentives must be secured. How can we solve the uneven distribution of professionals? The best solution is the incentive we can give these doctors that will encourage them to go to these provinces. The best incentives are monetary. If we can give them better salary, if we can give them better incentives to make sure it is safe to invest in putting up small clinics, that the financing will be more affordable, then we can attract them to go to these areas. However, it’s about choices. For example, a private doctor would not go to rural areas if he does not feel safe or if he cannot send his children to school. They have to makesure that their families can be well-provided.
Activated T Cell Inactivated T Cell
PD-1 Receptor PD-L2
PD-1 Receptor PD-L1
An immune checkpoint pathway1
Artist’s interpretation based on scanning electron microscopy.
Some tumor cells can evade the body’s immune response, which may result in disease progression2,3 • One function of the body’s immune response is to detect and destroy tumor cells through activated T cells and other mechanisms; tumor cells express multiple antigens that are not expressed in normal tissue.1–3 • However, some tumor cells may evade the body’s immune response by exploiting the PD-1 checkpoint pathway through expression of the dual PD-1 ligands PD-L1 and PD-L2.1,2,4–7 • PD-L1 and PD-L2 engage the PD-1 receptor on T cells in order to inactivate T cells, which may allow tumor cells to evade the immune response.1,2,8
MSD is committed to furthering the understanding of immunology in cancer, including the role of the PD-1 pathway. PD-1=programmed cell death protein 1; PD-L1=programmed cell death ligand 1; PD-L2=programmed cell death ligand 2. References: 1. Pardoll DM. The blockade of immune checkpoints in cancer immunotherapy. Nat Rev Cancer. 2012;12(4):252–264. 2. Keir ME, Butte MJ, Freeman GJ, et al. PD-1 and its ligands in tolerance and immunity. Annu Rev Immunol. 2008;26:677–704. 3. Hanahan D, Weinberg RA. Hallmarks of cancer: the next generation. Cell. 2011;144(5):646–674. 4. Quezada SA, Peggs KS. Exploiting CTLA-4, PD-1 and PD-L1 to reactivate the host immune response against cancer. Br J Cancer. 2013;108(8):1560–1565. 5. Zou W, Chen L. Inhibitory B7-family molecules in the tumour microenvironment. Nat Rev Immunol. 2008;8(6):467–477. 6. Rosenwald A, Wright G, Leroy K, et al. Molecular diagnosis of primary mediastinal B cell lymphoma identifies a clinically favorable subgroup of diffuse large B cell lymphoma related to Hodgkin lymphoma. J Exp Med. 2003;198(6):851–862. 7. Nomi T, Sho M, Akahori T, et al. Clinical significance and therapeutic potential of the programmed death-1 ligand/ programmed death-1 pathway in human pancreatic cancer. Clin Cancer Res. 2007;13(7):2151–2157. 8. Latchman Y, Wood CR, Chernova T, et al. PD-L2 is a second ligand for PD-1 and inhibits T cell activation. Nat Immunol. 2001;2(3):261–268. MSD Pharma (Singapore) Pte Ltd. 150 Beach Road #31-00 Gateway West Singapore 189720 Tel: 6508 8400 Fax: 6296 0005 http://www.msd-singapore.com Copyright © 2015 MSD Pharma (Singapore) Pte Ltd, a subsidiary of Merck & Co., Inc., Kenilworth, NJ, USA, All rights reserved. ONCO-1157239-0000 10/15
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How clinical decision support technology is cutting costs and saving lives If you ask any doctor about their biggest challenges, they would likely say they are under constant pressure to do more, with less time and fewer resources.
By Peter Bonis, MD, chief medical officer, Wolters Kluwer Health, Clinical Effectiveness
echnology is coming to their aid in alerts or basic care recommendations. In its more sophisticated form, CDS can many different ways, making the be a powerful tool that customises the health tech industry a hotbed of decision support information around the growth and innovation. One area that individual patient, often linking in with answers many of these key challenges their electronic medical record (EMR), faced by clinicians is decision support using health data exchange technology technology – also known as Clinical to refine a diagnosis or recommendation Decision Support (CDS). with elements such as the patient’s age Broadly speaking, CDS is workflow technology, allowing clinicians to support and sex. At the simplest end of this broad scale, you their decisions with evidence-based “I get a real sense of could argue that CDS is a passive information regarding how CDS technology information diagnoses, treatment recommendations, or is becoming embedded resource. into their day-to-day At the more drug prescriptions. It sophisticated allows the clinician to work.” end, it becomes quickly access accurate an interactive workflow tool. and authoritative information exactly I am writing about this technology with when they need it most – at the point of some significant inside knowledge – as care – and in the most convenient way. the Chief Medical Officer of the CDS market leader – Wolters Kluwer Health’s A wide spectrum UpToDate. UpToDate is the world’s mostThis is a broad sector and CDS means used clinical decision support tool, used different things to different users. At by over 1.3 million clinicians in over 180 the simplest end of the scale, some countries and 32,000 medical institutions, think of CDS simply as hospital system 10 HEALTHCARE ASIA
including hospitals, GP practices, clinics and medical schools. UpToDate’s users can search over 10,500 clinical topics across 24 medical specialties. When I look at how much our product is used by an army of front-line clinicians all over the world, I get a real sense of how CDS technology is becoming embedded into their day-to-day work. We closely monitor usage and know that almost 35 million topics views are made every month. That’s more than just an incidental usage – it shows UpToDate is deeply integrated into many clinicians’ work, helping them make betterinformed, more accurate decisions that save time, money and lives. Minimising variability in care The growth of CDS is being driven by human needs, the economics of healthcare, and the evolution of enabling technology. One of the biggest factors behind its growth is a desire to minimise high variability in patient care. There is no reason why patients should receive
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Peter Bonis, MD
different treatments based solely upon which doctor they happen to see and where they happen to see them, especially if there is scientific evidence supporting specific approaches. Yet, such variability continues to be common throughout the world. For example, in a study that examined management of heart failure at 398 hospitals in five regions (North America, Latin America, Asia Pacific, Central Europe, and Western Europe) there was significant variation in how often patients received standard treatments for heart failure. Compliance with these interventions ranged from 0 to 89%.1 Some of this variability is justified based upon differences in patient characteristics and availability of expertise, but in other cases there is no justification for it. Unwanted variability leads to waste and potentially harms patients. 2 The reasons for variability in care are complex. A contributing factor is the challenge in turning evidence into practice. Consider, for example, that you are a clinician seeing a patient with heart palpitations. You make a diagnosis of atrial fibrillation (AF), a condition in which the upper chambers of the heart beat irregularly. Because of the abnormal rhythm, patients with AF are predisposed to forming blood clots in the heart, which can then enter the circulation causing a stroke. Fortunately, the risk of a stroke can be substantially reduced by using a blood thinning medication (an anticoagulant). The benefit of a blood
administration technique.4 Many of these thinning medicine on stroke risk has to be balanced against the increased risk could be prevented with implementation of bleeding in patients who use these of existing technology to support drugs. Many studies have provided prescribing decisions. evidence to help guide the decision. Nevertheless, whilst the evidence of a Information overload benefit of anticoagulants in selected Another important trend that makes patients is clear, more than 30 percent of a strong case for CDS is the explosion at-risk patients are not receiving one.3 in the volume of medical information. Scientific knowledge continues to evolve, Why should that be the case? To leading to the introduction of new drugs, prevent at-risk patients from having a treatments and diagnostic tests. Thus, stroke from AF, many things have to go clinicians face the task of continuously right. The required information about a refreshing their knowledge to an extent patient has to be available, the clinician where they feel comfortable changing has to be familiar with contemporary their practice. The task of keeping up management of atrial fibrillation, with all the advances in medicine, much and the patient has to adhere reliably less gaining experience in using newer with treatment recommendations. options, is challenging. As a result, it Unfortunately, there are pitfalls in all is becoming three. Fortunately, â€œFortunately, health increasingly health information technology has information technology difficult for the potential to has the potential to help,todayâ€™s timehelp, particularly particularly in assisting pressed doctors to stay ahead of in assisting clinicians in making this avalanche clinicians in optimal decisions for of new making optimal their patients.â€? information, decisions for their covering everything from treatment patients. recommendations, to new research and Health information technology and procedures. And the amount is growing decision support also have the potential all the time. to prevent errors. Medication errors, for To add further complexity, the example, remain common. A systematic increasing digitisation of healthcare review of 17 studies from southeast Asia data is leading to additional sources found that they were most commonly of information that can be mined due to the use of the wrong dose but and potentially applied to decisionother causes included errors in omission, making. The possibility that treatment incorrect timing of dosing, use of the recommendations will one day be highly wrong drug, the wrong dosage form or
CDS technology gives clinicians the tools to make the right decisions at the right time
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Medical School, found that adoption personalised has huge benefits, but it of UpToDate in hospitals in the United adds to the volume of information that States was associated with improved clinicians need to deal with. efficiency and performance on quality Studies that have evaluated clinical measures and, impressively, a reduction questions that arise in daily practice in mortality.8 have found that about two out of three clinical encounters generates a question Clinical decision support can also be and that only 40 percent of questions get combined with other interventions aimed answered.5 Answering all the questions at turning knowledge into practical experience. A study by the General would change five to eight management Medical Council decisions “Several studies and (GMC) in the each day for a typical general systematic reviews have United Kingdom practitioner. That supported a benefit from found that is a frightening clinical decision support newly qualified junior doctors statistic, since systems.” can struggle answers to those with complex clinical decision-making, questions may change the doctors’ and can make prescribing errors at recommendations. Studies that have up to twice the rate of other health evaluated changes in decisions once professionals.9 A study of junior doctors doctors receive pertinent information have found that these changes may in the UK evaluated the impact of substantively alter the care of their feedback on medication prescribing, patients.6 Thus, decision support that along with eLearning, simulation and access to UpToDate on mobile devices.10 helps answer these questions with stateof-the art, evidence-based knowledge By the end of the study, medication has the potential to have a substantial errors were reduced by 50 percent. impact on care. In a survey of UpToDate users in Northwest England, doctors reported Measuring impact that use of UpToDate reduced treatment So what is the impact on care? One key delays, helped them avoid unnecessary finding is that clinical decision support testing, reduced time delays in diagnosis, can be instrumental in helping clinicians led to changes in treatment, and reduced decide on the optimal course of therapy, time to discharge.11 and ensuring that the right therapy In a study from National University is recommended. Several studies and Hospital in Singapore, users found a systematic reviews have supported a satisfactory answer to their question benefit from clinical decision support in 75% of searches in UpToDate. Of systems.7 these, the answer changed diagnosis or management 37% of the time, whilst it For example, a study about UpToDate, reassured the user of the original plan conducted by researchers at Harvard
Clinical Decision Support tools are increasingly available as mobile apps
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38% of the time.12 Cost savings These benefits for efficiency have the potential to translate into real cost savings. At one of the largest UK hospitals that uses UpToDate – Salford Royal NHS Foundation Trust (SRFT)– a case study focused on its use found that the service improves quality of care and in turn has a positive impact on key hospital metrics such as mortality rates, waiting times, readmission rates and length of stay, faster diagnosis and a reduced time to treatment. Research by Forrester Consulting calculated that each day of decreased hospital stay saves at least £250.13 Based on studies of UpToDate’s impact (in which it was associated with average reduction of 0.167 bed days per inpatient)14 this benefit would save a hospital like SRFT £2.2 million annually or 9,000 bed days. Extrapolate this out to the NHS as a whole, and it’s a potential savings of several hundred million pounds. All of this shows how CDS technology fits in with policy-makers’ efforts to find systematic solutions for driving down costs through efficiency gains. For example, in the UK, the Quality, Innovation, Productivity and Prevention (QIPP) program was developed by the Department of Health to deliver quality improvements in NHS care, whilst making up to £20 billion of efficiency savings. Its objective was to ensure that patients are cared for in the most appropriate and productive environment, where quality is maximised, processes are efficient and variation is minimal. CDS technology can have an important role in bringing these efficiencies directly to the point of care. Cookbook medicine? One criticism that some may level at the growing use of CDS – especially when you see its potential use in medical education – is that it risks breeding a new generation of technology-reliant clinicians, replacing their own knowledge with the search results from an app. Some have called it the rise of ‘cookbook medicine’. Others draw a parallel with the effect that GPS navigation devices has had on taxi drivers. Are the doctors of the future going to be driving on auto pilot? The answer is a categorical no. The
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key to the successful and effective implementation of CDS is that it needs to be “smart”. Information needs to be delivered in a way that is seamlessly embedded into the physician’s workflow, supporting his or her reasoning process – not replacing it. When CDS technology can be embedded into an EMR – which is already the case with UpToDate in many hospitals – then it moves from being an information resource to a personalised and dynamic tool. When an EMR is not available, some forms of CDS (including UpToDate) can be accessed on desktop computers or mobile devices (with or without an internet connection). A guiding principle for the use of this powerful technology is that it needs to support the decision-making process rather than replace it. It recognises that clinicians can’t be expected to know everything, whilst at the same time requiring their brains to be truly switched on. Going back to the taxi driver analogy – a GPS may suggest a proposed route, but what will it do if the car in front crashes and causes a pile up? The driver doesn’t just sit there and wait for the machine to give her instructions – she figures out a way to get home. In this sense, CDS technology is about giving clinicians the tools that ultimately help them make the right decisions at the right time, helping the patient receive better and safer care whilst delivering efficiencies and lowering the cost of care. Jonathan G. Howlett et al. Global Variation in Quality of Care Among Patients Hospitalized With Acute Heart. Failure in an International Trial. Circ Cardiovasc Qual Outcomes. 2013;6:5341
CDS technology supports decision-making rather than replaces it
542. 2 Better value in the NHS, The role of changes in clinical practice. The Kings Fund. 2015. 3 Hsu JC, Maddox TM, Kennedy K, et al. Aspirin Instead of Oral Anticoagulant Prescription in Atrial Fibrillation Patients at Risk for Stroke. J Am Coll Cardiol. 2016;67(25):2913-2923. 4 Salmasi S, Khan TM, Hong YH, Ming LC, Wong TW. Medication Errors in the Southeast Asian Countries: A Systematic Review. Fuh J-L, ed. PLoS ONE. 2015;10(9):e0136545. doi:10.1371/journal. pone.0136545. 5 Del Fiol G, Workman TE, Gorman PN. Systematic review: the relationship between clinical experience and quality of healthcare. JAMA Intern Med. 2014 May;174(5):710-8 6 Phua J, MBBS, MRCP, See KC, MBBS, MRCP, Khalizah HJ, MBChB Manc, MRCP, Low SP, MBBS, MRCP, Lim TK, MBBS, FRCPE. Utility of the electronic information resource UpToDate for clinical decision-making at
Some forms of CDS can be accessed on computers or mobile devices
bedside rounds. Singapore Med J 2012; 53(2): 116-120. Lucas BP, Evans AT, Reilly BM, Khodakov YV, Perumal K, Rohr LG, Akamah JA, Alausa TM, Smith CA, Smith JP. The impact of evidence on physicians’ inpatient treatment decisions. J Gen Intern Med. 2004 May;19(5 Pt 1):4029. 7 Berner ES. Clinical decision support systems: State of the Art. AHRQ Publication No. 09-0069-EF. 2009. 8 Isaac, T, Zheng, J, Jha, A. Use of UpToDate and outcomes in US hospitals. J. Hosp. Med., 2012; 7: 85–90. 9 Dornan T, Ashcroft D, Heathfield H, et al. An in-depth investigation into causes of prescribing errors by foundation trainees in relation to their medical education: EQUIP study. General Medical Council. 2009; 1-215. 10 Patel R, Green W, Shahzad MW, Larkin C. Use of Mobile Clinical Decision Support Software by Junior Doctors at a UK Teaching Hospital: Identification and Evaluation of Barriers to Engagement. Eysenbach G, ed. JMIR mHealth and uHealth. 2015;3(3):e80. 11 Addison J, Whitcombe J, William Glover S. How doctors make use of online, point-ofcare clinical decision support systems: a case study of UpToDate. Health Info Libr J. 2013 Mar;30(1):13-22. 12 Phua, J et al., 116. 13 Forrester Consulting. A Forrester Total Economic Impact™ Study Prepared for UpToDate. November 2011. 14 Bonis PA, Pickens GT, Rind DM, Foster DA. Association of a clinical knowledge support system with improved patient safety, reduced complications and shorter length of stay among Medicare beneficiaries in acute care hospitals in the United States. Int J Med Inform. 2008 Nov;77(11):745-53.
HEALTHCARE ASIA 13
Healthcare insight: DIGIHEALTH ADOPTION
Asia’s rapid regulatory transformation
How will Asia close the healthcare innovation gap?
Healthcare supply and demand in the region is in disequilibrium resulting to unmet needs, and a number of countries are still woefully lagging.
hen India launched its Startup India initiative, it gave a big boost to local startups, especially to the country’s healthcare sector which was pining for a stronger digital innovation engine. Millions in India – as well as in other Asian countries – still cannot access healthcare services, but analysts believe the wheels of innovation that are starting to turn across the region will help improve healthcare delivery and quality. Asian governments and private companies are working together to roll out groundbreaking healthcare initiatives, many in the digital space, including mobile health apps, telehealth, and wearables; but the pace is slower in the region’s emerging countries than in developed ones. In the case of India, digital technology adoption is already gaining prominence in the healthcare 14 HEALTHCARE ASIA
The adoption of health-related smartphone apps has doubled in the last two years alone.
industry, with efforts from both the public and private sectors, says Dr Rana Mehta, partner at PwC. The government has launched several initiatives with support from the private sector in some cases. The private sector, for its part, has led the charge to create mobile apps, adopt telemedicine, and set up innovation centres all around India – initiatives which Mehta says have been largely influenced by the rising number of digital health startups. More Indians are using their smartphones to obtain basic needs like food and healthcare. Digital solutions that are popping up in India and across Asia – ranging from mobile apps to telemedicine – are using a combination of innovation and technology to deliver a personalised patient experience, says Daniel Burrus, innovation expert at Burrus Research, Inc., High Point University. Sparks of innovation have
also been fuelling India’s m-health sector, which has an estimated market size of 2,083 crore INR (US$313m) in 2015 that is expected to more than double to 5,184 crore INR (US$779.2m) by 2020. Acceptance amongst doctors and patients of m-health is on the rise. A PwC study showed that 68% of doctors in emerging markets recommend m-health and 59% of patients are already using it. Telehealth, m-health, and wearables Mobile apps, especially those connecting doctors to patients and enabling remote consultations, are a major segment within m-health. Some popular m-health apps offer online video consultation and online book for diagnostics tests. Burrus reckons the adoption of health-related smartphone apps has doubled in the last two years alone, and with over 6 billion smartphone users globally by 2020, “it’s easy to see where the next hard trend in healthcare will be.” Wearables in healthcare is likewise taking off in usage, variety, and market size. India’s overall healthcare wearables market is currently valued at 30 crore INR (US$4.5m), and it
Healthcare insight: DIGIHEALTH ADOPTION is expected to expand as wearables technology becomes more widely available. “Initially, wearables in healthcare were devices that could track diet and fitness activity and were known to improve diet and exercise outcomes. Now, wearables are being increasingly used to measure basic health parameters such as heart rate,” says Mehta. Burrus estimates the worldwide wearables market to expand to US$155m by 2019. He also forecasts 13 million wearable trackable devices will make their way into employee wellness programmes by next year, and that subsidised devices or services could also be offered in exchange for providing critical data points and feedback. Still, despite their impressive traction in recent years, m-health and wearables have a lot of room for growth, especially as more patients start to take a proactive role to monitor their health. “It’s easy to forget how many people are only just discovering how to quantify information about their health and wellness by monitoring their lifestyle,” says Burrus. “For patients, there is now a wealth of opportunities to take ownership of their lifestyle choices and make decisions that used to be made by healthcare professionals.” Asia’s supply demand imbalance More than advanced technology and government support – which are indeed gaining momentum in Asia – harnessing innovation has become paramount for the region’s healthcare sector to move towards universal quality coverage, says Dr Allen Lai, regional managing director at ACT Genomics. “Whist industry and political drivers are both important, the incontestable primary driver of innovation in the healthcare industry is unmet patient needs,” he explains. “And nowhere does this driver play a bigger role than in Asia, a prime location for disruptive healthcare innovation.” Lai points out that Asia has a supply and demand disequilibrium which results in a large pool of unmet healthcare needs. On the demand side, countries like Japan, Korea, Hong Kong, Taiwan, and
Singapore have managed to build strong, progressive healthcare systems and social safety nets after decades of strong economic growth. “But whilst these countries have access to top-of-the-line healthcare products and services, they’re nonetheless impeded today by a rapidly-aging population and rising healthcare costs,” says Lai. Meanwhile, countries like Cambodia, Myanmar, and Laos, remain woefully behind in basic infrastructure, with many clinical facilities and transportation still relying on informal and traditional means of healthcare provision. This has spawned a black market of counterfeit drugs and lowers the quality of healthcare delivery. On the supply side, Asia is undergoing rapid regulatory transformation. Malaysia, Singapore, and Thailand are starting to capitaliseon their comparative advantages in quality care to promote medical travel and tourism. Malaysia and Singapore have notably moved from government-dominated health services towards a more privatised approach, in contrast with countries like the Philippines and Vietnam that have leaned towards decentralised healthcare provision. Nurturing innovation To close the healthcare gap in the region, Lai believes the answer lies in thinking outside the box and focussing on healthcare innovation. “If resources are an obstacle, an innovative solution might take the shape of a financing or insurance programme, or an incentive scheme for healthier lifestyles,” he says. “In this particular area, some countries like Singapore, Taiwan, and Korea, have been able to offer financial incentives like insurance premium reductions and kick-backs as part of their efforts to encourage healthy lifestyles.” “The bottom line is that innovation, whether driven by technologies, by governance, or by organisations, can be a game-changer. Some progress has already been made, but the hope is that over the next ten years, innovative progress will transform well-being in the region,” he adds. The task of nurturing innovation
does not fall on a single lap, but instead should be shared between the public and private spheres of each Asian country. Lai reckons governments are often in the best position and carry the primary responsibility to encourage innovation through the provision of clear regulations, responsible governance, and effective pathways for public-private partnerships. For their part, private companies such as leading drug companies in the region can catalyse innovation by sourcing external academic partnerships and creating strong networks of research institutes, the latter of which can open pathways to novel resources, ideas, and technologies – or at least fresh combinations that lead to better digital solutions. But medical technology industries have an especially critical role to play in the coming years: Fostering clinician innovators within the public healthcare system through talent development programmes. This will likely pave the way for Asia to sustainably ramp up its digital healthcare solutions and embrace the age of the “digital doctor.” “Since skilled healthcare professionals are too few, an innovative solution might take the shape of a virtual consultation technology like eHealth, or a wearable health monitoring system,” says Lai. “These types of technologies are already changing the way local populations view their access to healthcare – the digital doctor is set to become the norm in the next few years thanks to their costeffectiveness and the wealth of patient data that they afford.”
India’s telemedicine market
HEALTHCARE ASIA 15
Speed of diagnosis and treatment is a philosophy of care we believe in, and therefore invest in to provide excellent standard of care.
Predee Daochai Phua Tien Beng President CEO Kasikornbank Mount Elizabeth Hospital 16 HEALTHCARE ASIA
Mount Elizabeth Hospital’s CEO takes medical appointment to WhatsApp
CEO Phua Tien Beng is dead serious on patient-centred care as it now uses WhatsApp to book appointments from anywhere in the world and to let patients easily reach them.
ount Elizabeth Hospital, colloquially called MountE, has been catering to patients in the region for over 30 years. The 345-bed private hospital has earned its title of being a multi-organ transplant specialty hospital over the years as it is the first private hospital in Singapore to perform open heart surgery and establish a nuclear medicine centre. Healthcare Asia sat down and talked with CEO Phua Tien Beng on MountE’s future with him as the leader. What are the latest innovations, developments, and strategies to improve the quality of service of Mount Elizabeth Hospital? Every patient’s safety is of utmost importance to us. One of our latest initiatives, amongst others, is the Knowledge Based Medication Administration system, implemented last year. Nurses now electronically scan the wrist tag on each patient’s arm before administering any medication. The system immediately alerts the nurse when there is a mismatch in medication and patient. We are also working on remotely monitoring the vital signs of patients. This reduces the need for nurses to physically go to the patient to take readings, thus minimising the need to disturb them, especially in the night. Patients will be able to get uninterrupted sleep and can recover better; nurses are also able to focus on other areas of patient care. In June 2015, we piloted a bed management system to speed up the admissions process. Previously, the only way the admissions office would know if there are available beds is for them to call the ward and have the nurses walk through to check. With this new system, the status of all beds in the wards; whether they are occupied, being cleaned, etc., can be tracked in real time. Admissions waiting time has been reduced by 26%, which is about 40 minutes. What are some of the problems and challenges facing Mount Elizabeth Hospital and how do you plan to address them? Being in Singapore’s prime location also means that there is limited physical room for the hospital to grow and expand. In recent years, we are seeing a greater demand for single bed rooms, due to more patients placing more importance on comfort and privacy. Whilst I would like to cater to this preference, the hospital is restrained by space. Because of this, there is a limit to the number of patients the hospital can house in future. It is therefore important that we continue to find ways to innovate and increase productivity. We are working on a unique concept of flexi-rooms, where we are able to convert double bed rooms into single rooms, vice versa. This is probably a first for an acute hospital.
We have also recently expanded beyond the hospital’s physical boundaries by moving our outpatient Mount Elizabeth Rehabilitation Centre to neighbouring Paragon Medical Centre. Occupying an area of more than 3,100 sq ft, it is the largest and most comprehensive private rehabilitation centre in Singapore. We are also starting to invest in and build up our digital capabilities. With the rise of a digital economy, we need to start looking at how to approach healthcare with a preventive approach; to make healthcare more convenient, and delivered where most needed. Remote monitoring via devices that send results to the doctor’s office, for example, can largely alleviate the strain on our healthcare system. On this note, Mount Elizabeth Hospital has recently launch Health Plus – a health and wellness web resource with up-to-date healthcare information backed by accredited specialists. Also, riding on the popularity and convenience of WhatsApp, the public can now also touch base with us, including making medical appointments, via this platform, from anywhere in the world. What are some of your future plans for Mount Elizabeth Hospital for the next two to three years? Moving forward, we have three areas of focus for the hospital. First is to make ourselves more patient-centric; to make it as convenient and seamless as possible for patients. Second is to continue to provide better clinical outcomes by attracting the best medical talents and staying ahead with cutting-edge treatments. Third is to continue to leverage on technological advancements and innovations. We were the first private healthcare player in Singapore to embark on Electronic Medical Records in 2011 and we will use it, moving forward, to enable our doctors and nurses to monitor, connect, and make clinical decisions using their mobile devices on the go. Many medical tourists come to Singapore, Mount Elizabeth Hospital in particular, to receive high-quality treatment. Our key value proposition is that we are able to provide a comprehensive list of treatment options that are tailored to each patient. Our large pool of highly qualified specialists and healthcare professionals, coupled with a reputation of being a trusted medical provider with a strong track record spanning almost 40 years, means that we are able to give well-rounded diagnoses to patients. The Mount Elizabeth brand will continue to put the hospital at the forefront of medical tourism.The biggest strength of Mount Elizabeth Hospital is the pool of doctors that we have, with over 1,400 accredited specialists in diverse disciplines and more than 500 of them running clinics at the hospital, this concentration of specialists under one roof is unparalleled in Asia. HEALTHCARE ASIA 17
UCH is a hospital without walls
United Christian Hospital boosts geriatric care amidst rapid ageing in Hong Kong The hospital eyes further expansioni amidst apparent shortage in manpower and facilities, and remains committed to responding to the rapidly ageing population in its territory.
he 1,400-bed United Christian Hospital (UCH) serves over 400,000 patients a year—a volume that has put a strain on its resources. The hospital provides 24-hour accident and emergency, in-patient, out-patient, and community care services. It also provides geriatric day hospital, physiotherapy, psychiatry, and radiology services at the Yung Fung Memorial Centre, manages the pharmacy service of the Pamela Youde Polyclinic, and administers primary care services through five general out-patient clinics in the Kowloon East region. Despite the challenges, Dr. Chui Tak-yi, hospital chief executive, remains resolute in steering the hospital into the future. “UCH strives to manage service pressure areas through rationalisation and prioritisation,” he said, highlighting that UCH is actively taking steps to meet the ever growing demand for quality healthcare. “Hospital without walls” Founded through a partnership between the Hong Kong Christian Council and the Alice HoMiu Ling Nethersole Hospital, UCH first opened its doors in 1973. It became a public hospital in 1991, with the Hospital Authority taking over its administration. With its motto “With Christian Love We Care, With Excellence We Serve,” UCH seeks to provide holistic care for patients and promote the concept
18 HEALTHCARE ASIA
We aim at enhancing pre-operative management to ensure operation will be done within 48 hours, as well as in improving post-operative care, rehabilitation, and discharge.
of “hospital without walls” through community-oriented partnerships and services. Pioneering community nursing services in the 1970s, UCH nurses reached out to communities and extended direct clinical care services across a wide range of specialties, such as geriatrics, surgery, and postnatal care. Geriatric care Responding to the rapidly ageing population within its immediate vicinity, UCH established an Ortho-Geri Specialty Ward in November 2015—the first hospital in Hong Kong to do so. Kwun Tong, the district where the hospital is located, is one of Hong Kong’s poorest, with people aged 60 and above comprising a fourth of its population. Dr. Chui relates that their Orthopaedics and Traumatology (O&T) department handles an average of 600 cases of geriatric hip fracture every year, necessitating the need for specialized geriatric services. “We aim at enhancing pre-operative management to ensure operation will be done within 48 hours, as well as in improving post-operative care, rehabilitation, and discharge,” he said. The Ortho-Geri Specialty Ward incorporates several elderly-friendly features, using warm colours for different cubicles, bigger and more readable signage, and
feature feature profile profile The demand that UCH has been facing is on the rise in terms of service volume and complexity amidst the constraint of physical space and continual manpower shortage.
Space and manpower shortage is not holding UCH back
specially-designed toilet doors to allow fast access in times of emergency. The increasing volume in UCH’s patients has created several problems, with long queuing periods primary among them. To address this and improve convenience for patients, the hospital developed the Specialist Out-Patient Clinic Queue Management System (SOPC-QMS), which provides real-time announcements of the consultation timeslot being served and displays it on waiting areas. The system also automatically updates queue status, which helps in improving the efficiency of outpatient clinic workflow. The data generated from the SOPC-QMS has enabled the hospital to enhance workflow processes and make timely adjustments to resource allocation. “For example, if waiting times were particularly long, more doctors could be called in,” explained Dr. Chui. Aside from the queue status, the system is also used to make public announcements in Cantonese, Putonghua, and English For its direct impact on enhancing service delivery to patients, the QMS won the Hospital Authority’s Outstanding Team Award in 2016 and has become a prototype for the Hospital Authority’s other out-patient clinics to adopt. Further expansion Dr. Chui acknowledges that despite UCH’s many recent innovations, challenges keep mounting. “The demand that UCH has been facing is on the rise in terms of service volume and complexity amidst the constraint of physical space and continual manpower shortage,” he said, adding that the hospital’s existing facilities “are inadequate in terms of space, capacity and design to cope with the rising service demand.” Increasing physical space has therefore been a key priority for the hospital. In fact, Dr Chui shares that they are planning to build a 23-storey Ambulatory Block by 2023. The ambulatory block will add 560 beds to UCH’s current capacity, bringing the hospital’s total to 1,960 units. It will further increase the number of operating theatres from 13 to 18,
and the number of operation rooms in the outpatient clinic from 81 to 180. The new ambulatory block will house the expanded specialist outpatient clinics, and day and rehabilitation services. It will also provide additional space to the coronary care unit, intensive care unit, radiology department, accident and emergency department, and the endoscopy centre. A new Oncology Centre will also be constructed within the building, designed to provide one-stop services including radiotherapy, chemotherapy, and psychosocial care for cancer patients. The strategic framework behind UCH’s expansion is CARE, or the enhancement of Cancer, Ambulatory, Rehabilitation, and Emergency Services. Aside from the new ambulatory block, the older blocks will either be demolished or refurbished, and landscaping and road works will also be commenced. Workforce development Dr. Chui stresses that another focus area for improvement is the development of the hospital’s employees. “A more stable workforce is to be attained through continuation of career development opportunities for the staff,” he said. He highlights the crucial role the medical staff play in interfacing with patients, and underscored the need to develop a system that would enhance their skills and core competencies. While the large-scale expansion is ongoing, Dr. Chui also said the hospital would try to minimize disruption to its operations. “The key to achieve this is through close monitoring of the works, and continuous communication with staff, patients, stakeholders, and community partners,” he said, emphasizing that the hospital will remain “functional at all times,” and that they have been very proactive in mitigating all risks related to the expansion project. In the short term, Dr. Chui says UCH is readying for the annual increase in demand in acute services during the winter surge. “With the aging population, high demand for accident and emergency elderly patients requiring medical care is anticipated,” he said.
Close monitoring of works
HEALTHCARE ASIA 19
cOUNTRY report: Indonesia
Hungry for private healthcare
Burgeoning private healthcare demand Led by the growing middle class, Indonesians are expected to gorge on more healthcare services than ever before, creating a delicious opportunity for private hospitals.
hen Indonesians list their spending priorities in the coming years, hospital check-ups and medical treatments should climb their way to the top of the list. Increasing wealth and expanding health concerns, amongst other factors, will drive up healthcare expenditure in Indonesia. Private hospital groups are now racing to open new hospitals to serve more patients that will pay to either access higher quality healthcare services to avoid increasingly packed public hospitals. Jyoti Nagrani, consulting analyst at Frost & Sullivan Asia Pacific, says the country’s healthcare expenditure as a percentage of gross domestic product is expected to increase to 4.3% to reach US$50.8b in 2020. She reckons Indonesia is gearing up for a higher-earning population, with 4 out of 5 (over 80%) of Indonesians potentially belonging to the middle class by 2025. “The spending power will generate a huge spill-over effect for both domestic and the Association of Southeast Asian Nations (ASEAN) economies, creating enormous business opportunities including healthcare,” says Jyoti. The emergence of a more robust Indonesian middle class will provide a strong boost to the healthcare sector as it starts to tap into a large unpenetrated market, says Samuel Sentana, research associate at PT Deutsche Bank Verdhana Indonesia. “There is still much room for growth in the years to come,” he adds, noting that Indonesia lags 20 HEALTHCARE ASIA
The spending power will generate a huge spill-over effect for both domestic and the Association of Southeast Asian Nations (ASEAN) economies.
behind its regional neighbours when it comes to per capita spending on healthcare and hospital bed ratio. Indonesia’s per capita spending on healthcare is at US$108, which is half of Thailand’s and a quarter of Malaysia’s. The country also has a much lower ratio of 9 hospital beds per 10,000 people compared to Thailand’s 21 and Malaysia’s 19. Sentana estimates there is still room for Indonesia, which has a population of 250 million, to add 250,000 additional beds to catch up to its peers. Ageing population Hospitals should also benefit from the secular trend of an ageing population, as the number of Indonesians aged 65 years and above is projected to rise by 23 million over the next decade. “We expect Indonesia’s 65+ segment to become an increasingly important source of revenue for hospitals,” says Sentana, “as senior citizens tend to require more medical treatment due to higher occurrence of noncommunicable diseases, higher requirement for diagnosis and treatment, and longer duration of care.” Jyoti adds that there should also be a spike in aged care private investment as Indonesians aged 65+ years reach an estimated 5.4% of total population in 2017. Sentana reckons rising healthcare expenditure, which has posted a 15% compound annual growth rate during 2009 to 2013, will primarily benefit private hospital operators. “Growing
cOUNTRY report: Indonesia affluence is expected to bolster demand for private hospitals due to its superior quality and as public hospitals get overcrowded due to the start of universal healthcare,” says Sentana. Private hospital surge Large players with scale and brand recognition such as Siloam and Mitra Keluarga Group – the two largest private hospital operators by number of operational beds – stand to gain more from the anticipated market growth compared to smaller players that lack sufficient management capabilities and expansion capital. A Frost & Sullivan report adds that the demand for hospital beds, especially outside greater Jakarta area, cannot be addressed by public hospitals alone. Private hospitals that expand beyond the key cities can try to capture these new markets. “With higher spending power and willingness to pay higher premiums for higher quality, the middle class offers a huge untapped market for private healthcare providers,” says Pete Read, CEO, global growth markets and director at MediWorld China. Already, more foreign as well as local investments are pouring into the Indonesian healthcare sector, not only from private hospital groups, but also from unconventional industries wanting to diversify and partner with healthcare players such as technology companies, real estate firms, or conglomerates. Siloam Hospital Group, which operates 18 hospitals in the country, is aiming to more than double its hospital count to 40 by the end of 2017. Meanwhile, Kalbe Farma, one of the largest Indonesian pharmaceutical companies, plans to invest US$1.7m to build up to 25 private clinics each year in the capital Jakarta over the next five years. Listed tin manufacturer and exporter Timah, for example, recently expanded to the hospital sector and has put up hospitals in the Bangka Belitung province. Likewise, state-owned Inda Karya, which specialises in consulting and construction management, is also planning to open a hospital in Makassar, the provincial capital of South Sulawesi. Private healthcare providers are also benefitting following the launch of the National Health Insurance (JKN) as the government tries to provide universal healthcare to all Indonesians by 2019. Frost & Sullivan notes that there have been “teething issues” after the JKN implementation, including a concern over increasing
working capital requirements due to delays in receiving government reimbursement. The rapid influx of patients, especially in public hospitals, is also putting a tremendous strain on the quality and quantity of human resources in Indonesia’s healthcare sector. Jyoti Nagrani
Hospitals participating in JKN
Source: Global Growth Markets, Indonesia Ministry of Health
Besides shortages in quantity, there is also an uneven distribution of healthcare personnel.
JKN’s teething issues There are only 0.3 doctors per 1,000 population in Indonesia in 2012, far lower than in Thailand (0.7), Malaysia (1.3), and Singapore (2.0). The number of nurses per 1,000 population in the country (1.4) is also significantly lower than Thailand (2.7), Malaysia (3.8), and Singapore (6.7). “The already scarce doctors, which are way below the global and ASEAN averages, will be put under pressure by the burden of the increasing number of JKN patients,” says the Frost & Sullivan report. “Besides shortages in quantity, there is also an uneven distribution of healthcare personnel as doctors and nurses prefer to practice in major cities where the potential of earning and career development is better compared to rural areas,” it adds, although the establishment of the ASEAN Economic Community should improve the mobility of doctors from other ASEAN countries to Indonesia and help mitigate the shortage. Despite its faults and birthing pains, the JKN represents a step in the right direction since it has helped raise demand for health services and improved the investment appeal of the hospital sector. In 2015, a year after the JKN was launched, the percentage of people who seek outpatient care increased by 15% to nearly 56 million members. JKN membership also jumped to 157 million in 2015 from 133 million in 2014. “Whilst the pain experienced by the majority of Indonesians dealing with Indonesia’s healthcare may continue to grow for some time, this is a necessary journey toward success and all the bumps can be read as signposts on the road that the nation must travel to higher-income status,” says Rendy Satria Dalimunthe, a business tech consultant. “Moreover, the spark generated by the government’s boost to the healthcare sector is creating abundant opportunities for all to prosper. Substandard healthcare service in Indonesia represents investment opportunities, and records have shown surging demand for health and medical services since the JKN program rolled out,” he adds. Frost & Sullivan forecasts the pathology market to grow overall for non-communicable disease-related tests, with liver function and cholesterol tests being top clinical chemistry tests. “Indonesia is undergoing an epidemiological transition with the burden shifting to non-communicable diseases,” says the report. “A high prevalence of cardiovascular, cancer, diabetes, as well as communicable diseases such as malaria and tuberculosis will drive the demand for healthcare services.” Indonesians are heavy consumers of tobacco, with more than 60% of men aged 15 years and above reported as cigarette smokers, which has led to an increase in respiratory diseases. HEALTHCARE ASIA 21
ANALYSIS: SECTORAL CHALLENGES
Exploration of public-private financial models is encouraged
Healthcare sector challenges and considerations for 2017 Cost, care delivery, and innovation amongst top considerations for stakeholders, as ageing population drive demand and spending growth.
he world’s major regions are expected to see healthcare spending increases ranging from 2.4% to 7.5% between 2015 and 2020. Healthcare expenditures as a percentage of GDP are projected to rise more quickly in low-income countries due to limited government reimbursements for respiratory conditions; meanwhile, cardiovascular disease costs continue to rise for lower- and middle-income countries. Even as countries strive to expand healthcare access or institute forms of universal coverage, infrastructure issues are making it increasingly difficult for public healthcare systems to sustain current levels of service and affordability. In response, a number of nations are looking at discrete cost-containment measures, such as leveraging private health plans to improve care provision (Latin America), reducing the burden on public systems (Western 22 HEALTHCARE ASIA
In Japan, concerns about increasingly expensive therapies are prompting private insurance companies to place more focus on offering plans that supplement government OOP subsidy programmes.
Europe), moving care to less expensive settings (North America), and diminishing dependence on consumer out-of-pocket (OOP) expenditures (Asia, excluding Japan). Others are engaging in broad-scale transformation of their existing financial and care models. Emerging financial models Reimagining and reconfiguring economic incentives so that healthcare organisations are rewarded for doing the right thing at the right time to support their patients’ health remains a critical frontier in the push towards risk-sharing and outcome and value-based payment programmes. At a macro level, outcome-based payments are continuing to grow in popularity over historical fee-for-service (FFS) models in response to increasing demand from healthcare payers and consumers for high-value healthcare. Financial models vary widely by
country. Australia, for example, retains a firm commitment to service-based funding in both its public and private healthcare systems although there is increasing exploration of outcome-based payments schemes. Denmark is gradually reducing the use of DRGbased financial models in its move towards a focus on service quality and relevance rather than volume. A number of countries are exploring adoption of publicprivate financial models. China is issuing policies and launching trials to speed-up the growth of commercial health insurance, which traditionally has had a minimal role in the healthcare system. The coming years may see a reimbursement scheme with public health insurance as the pillar (covering basic care needs) and private insurance as a meaningful supplement. In Japan, concerns about increasingly expensive therapies are prompting private insurance companies to place more focus on offering plans that supplement government OOP subsidy programmes, such as one that sets a monthly co-pay cap (approximately USD$800 for those at a generalincome level). Similarly, in Southeast Asian markets where public health funding covers only a portion of oncology treatments, multinational companies (MNCs) are experimenting with patient assistance programmes to help finance their oncology drugs. Japan’s shift from medication to prevention can be seen in the Ministry of Economy, Trade and Industry (METI) programme “Health & Productivity Stock Selection,” which awards enterprises that focus on and strategically carry out health and productivity management for their employees. In Australia, population health management is the responsibility of the Commonwealth government and initiatives are largely managed through the Primary Health Networks. From “Global Healthcare Outlook: Sector challenges and considerations for 2017” by Deloitte
AWARDS 2017 For inquiries, contact Julie Anne NuĂąez +65 3158 1386 ext 221 firstname.lastname@example.org
ANALYSIS: MEDICAL COST TREND
Increases to be tempered by deflators
2017 to be a year of medical cost balance Forces increasing health costs are being tempered by a demand for value, and compared with a period of double-digit growth in the last decade, flat growth may feel like a win to health industry leaders.
wC’s Health Research Institute (HRI) projects the medical cost trend to be the same as the prior year – a 6.5% growth rate for 2017. After likely changes in benefit plan design, such as higher deductibles and copays, the net growth rate is expected to be one percentage point lower at 5.5%. For comparison, the net growth rate projection in 2016 was two percentage points lower due to more employer interest in cost sharing. HRI’s analysis measures spending growth for the 155 million people covered by employersponsored health insurance.This analysis does not cover government-sponsored or nongroup insurance. Forces inflating medical cost trend stem from increases in access to care, particularly primary and behavioral health services. Convenient care settings, such as retail clinics, provide consumer satisfaction at a low unit cost. Yet their success has led to greater utilisation, and more spending. At the same time, consumers will likely have greater access to behavioral health services thanks to renewed attention from regulators and employers. But expanded treatment options for mental health, though potentially reducing health costs in the long term, may inflate next year’s spending growth. Yet these increases will be tempered by deflators, all pushes for value in the New Health Economy. Pharmacy benefit managers (PBMs) are employing new and more 24 HEALTHCARE ASIA
Drug spending is still a relatively small portion of overall health spending.
aggressive strategies in their contracts with drug makers for bulk discounts and pricing. These moves will help keep overall drug cost trends in check next year. We also expect that political and public pressure will tamp down the largest drug cost increases. Insurers and employers also are deploying more aggressive network strategies. As the continuous shift to higher cost sharing starts to wane, we expect employers to explore new benefit strategies that change the focus from cost sharing to leveraging high performing provider networks with higher quality and lower costs. And though specialty drug costs outpace traditional drug spending trends, the costs of these new cures are not growing as fast as in previous years when the cost of new Hepatitis C drugs caught the market off-guard. Drug spending is still a relatively small portion of overall health spending and, as such, concerns of ever-increasing cost growth from new cures may trigger false alarms. 2017 will likely see slower specialty drug cost growth relative to last year. HRI’s Medical Cost Trend: Behind the Numbers 2017 projection of a flat growth rate raises critical issues. There are signs that the decade’s slowing medical cost growth rate could tick back up as new healthcare access points increase utilisation. At the same time, employers are turning to a largely untested benefit strategy of relying on narrow provider
ANALYSIS: MEDICAL COST TREND networks to bring prices down. As a result, 2017 will be a tough balancing act for the health industry. Healthcare organizations must simultaneously increase access to consumer friendly services while decreasing unit cost. Employers, worried that this current trend is at an inflection point that could turn back up, will demand more value from the health industry. When medical growth outpaces general inflation, a flat trend is not good enough. Medical cost trend in 2017 PwC’s Health Research Institute projects 2017’s medical cost trend to be 6.5%—level with the trend for 2016. Insurance companies use medical cost trend to help set premiums by estimating what the same health plan this year will cost the following year. Benefit design changes typically hold down spending growth by reducing utilisation of services through cost sharing. The net growth rate in 2017, after accounting for benefit design changes such as higher deductibles and narrow provider networks, is expected to be 5.5%. For this research, HRI interviewed industry executives, health policy experts and health plan actuaries whose companies cover more than 100 million employer-sponsored members. HRI also analyzed results from PwC’s 2016 Health and Wellbeing Touchstone survey of more than 1,100 employers from 37 industries, and PwC’s national consumer survey of more than 1,000 US adults. This projection is based on HRI’s analysis of medical costs in the employer insurance market, which covers about 155 million active employees.
Many behavioral health insurance systems— with their complicated rules and claims processes— seem deliberately designed to discourage use by both patients and service providers.
Factors affecting 2017 medical cost trend The proliferation of convenient ways to get care—such as retail clinics and urgent care centers—has led to higher utilisation. And that is impacting medical cost trend. There will be more than 3,000 retail health clinics in the US by 2017. Forty percent of consumers will seek care from a retail clinic in 2016; 88% said they are likely to seek treatment at those sites in the future. In addition to retail clinics, there are 9,300 walkin, stand-alone urgent care centers in the US, and 50–100 new clinics open every year. According to Robin Gelburd, president at FAIR Health, Inc. a not-for-profit organization that tracks health costs, “Looking at the demographic shift of site of service, we are seeing younger Use of retail clinics is increasing with the number of treatment places
Source: PwC Health Research Institute Consumer Survey and Convenient Care Association data
people use urgent care centers while older individuals use ambulatory care centers and retail clinics.” Retail clinics aim to be the consumer friendly alternative to the traditional doctor’s office and a much cheaper site of care than a hospital emergency room. According to Brian Marcotte, president and CEO at the National Business Group on Health, “As we expect employees to be more engaged consumers, they will demand more consumerlike experiences such as convenience, after-hours care and easy access that is cost effective.” In addition, 74% of clinicians believe that retail clinics have had a positive result on access to care. Increased access for behavioral health In years past, behavioral health has been a back burner issue but now it is key to health status and health spending. The mental health share of employer health benefit costs is increasing. Behavioral healthcare now has the regulatory push and mainstream recognition to be a bigger part of employer’s health benefits—and with expanded access comes new costs. For employers, behavioral health is often closely connected to their employees’ overall health. Sixtyeight percent of people with mental illness have chronic health conditions such as diabetes and heart disease. But employees have long had a hard time gaining access to mental health care and getting it paid for. A National Alliance of Mental Illness study in 2014 found that nearly onethird of consumers or their family had been denied mental health care on the basis of medical necessity, which was twice the denial rate for general medical care. “Many behavioral health insurance systems—with their complicated rules and claims processes—seem deliberately designed to discourage use by both patients and service providers,” said Ken Dolan Del Vecchio, a vice president in Prudential Financial’s health and wellness organization. “The results are predictable. Clinicians decline network participation and plan participants receive limited treatment or no treatment at all. We all deserve a more effective system of care.” But that is changing. As these changes go into effect, they will unlock pent-up demand, inflating medical cost trend in the short term, but should also help reduce costs in the long term. As for deflators, employers may have squeezed all they can from increased cost sharing, such as offering high deductible plans. In the last three years, the percentage of employers offering high deductible plans has increased by one half. Sixty-three percent of employers offer a high deductible plan with a health savings account and 25% offer a high deductible plan as the only health insurance option to their employees. But as more employees push back against high cost sharing due to their inability to pay their deductibles, employers are exploring other ways to control costs, such as high performance networks that have more limited provider choices and may feature outcomesbased payments. Forty-three percent of employers are considering implementing this type of network in 2016, up from 37% the prior year. From “Medical Cost Trend: Behind the Numbers 2017” by PwC HEALTHCARE ASIA 25
HEALTHCARE ASIA FORUM: MANILA
3,082 doctors have taken flight and left the country
The Philippines is facing headwinds in raising compensation for doctors
Doctors are migrating and preferring to attend to the medical needs of patients abroad, making the country the world’s second top exporter of doctors next to India.
t would seem like the apples are not the ones making the doctors go away especially in the case of the Philippines, which has seen an uptrend in doctor migration in the past 10 years. This was amongst the issues tackled in the Manila leg of the 2017 Healthcare Asia Forum held in Makati on February 15. Elvira Dayrit, director for Health Human Resource Development Bureau (HHRDB) of the Department of Health (DOH), led the discussion of the said issue, noting that the government has set up a plan to mitigate the dearth of doctors the country is currently facing. Citing the data from the Commission on Filipino Overseas, Dayrit noted that the cumulative migration of doctors has been steadily increasing since 2005 when a total of 297 doctors migrated. By 2015, CFO recorded 3,082 doctors who took 26 HEALTHCARE ASIA
The migration of the cumulative migration of doctors has been steadily increasing since 2005 when a total of 297 doctors migrated
the flight abroad. Dayrit pointed out that this has led to the country being the second top exporter of doctors next to India. “Our strength is that we really have good-quality doctors, who can speak English and with good rapport,” she said. However, looking at how this affects the Philippines, the outlook is not quite healthy. Referring to the 2007 data by the National Statistics Office, Dayrit revealed that 7 out of 10 deaths were not attended by medical authorities. The trend was prevalent in all other provinces outside the National Capital Region. And although she stressed that this was already reduced to 4 in 10 deaths, the trend remains alarming. The migration of the doctors may very well be due to the low compensation they are getting, Dayrit argued. According to the data from HHRDB, resident private doctors earn as low as PHP18,134 (US$360)
monthly. A medical assistant in the United States earns, taking home up to PHP3m (US$59,683) per annum, compared to around PHP210,000 (US$4,177) per annum of a private physician. Dayrit raised, “Can we blame them from running away?” She stated that the blame could not be thrown at the Department of Foreign Affairs (DFA) for not limiting immigration of health workers. A solution she suggested is the utilisation of nurses, which the Philippines currently has a supply glut of. “We have an oversupply, but only half pass the nursing license exams. The government is now thinking of using nurses in doing other tasks.” At the panel discussion, St. Luke’s Medical Center senior vice-president and head of hospital operations & chief nursing officer Annabelle Borromeo seconded this, noting that what needs to happen is
HEALTHCARE ASIA FORUM: MANILA We have 250,000 licensed nurses who are unemployed and underemployed.
Oversupply of nurses plagues the country
care coordination rather than active medical treatment. “I think nurses are well positioned in entering that role. We have 250,000 licensed nurses who are unemployed and underemployed. If we use them we can help in the burgeoning cost of non-communicable diseases.” However, Dayrit was quick to reason that this would need a legislative push. “The local government doesn’t have the item to absorb them. They don’t have the capacity to hire additional nurses.” Dayrit also mentioned that the Philippines is in need of 25,000 health workers to fill the ideal situation of a barangay having at least one health worker. “There should be an adequate number of Human Resources for Health (HRH) at all levels with competence to deliver Universal Healthcare that is key preventive, promotive, curative, and rehabilitative health interventions,” Dayrit noted. Healthcare financing troubles Meanwhile, Philippine Heart Center executive director Gerardo Manzo noted that there are other pressing issues confronting the healthcare sector especially the government and public hospitals. “You hear a lot of quality issues in the care delivered in government hospitals mainly because we do not have enough funds to take care of so many patients,” he said. Manzo noted that this could be alleviated with the government’s sincere commitment to universal healthcare. As of now, he noted that 85% of the Filipinos are covered by the national health insurance
program PhilHealth. This translates to more than 8 in 10 Filipinos. “It looks like the very simple solution is that everyone should be covered with PhilHealth. What PhilHealth has been doing is not enough, but it is better than what we were getting before,” he emphasised. Philippine Hospital Association President Jesus Jardin concurred, noting how patients are still shouldering the expenses. “The most important consideration is what value we can give our patients. The measurement we should use is giving quality care at a lower cost. The outof-pocket expense is about 40%, are we really giving our patients value?” he raised. Cardinal Santos Medical Center chief financial officer Elizabeth Dantes pointed out that financing goes hand in hand with cost. “We have a lot of innovations that bring down the cost of our hospital operations. What we did is to consolidate the needs of all the hospitals in terms of pharma, equipment and by that time we have negotiated the best pricing. Having the best pricing for drugs, supplies, and equipment would bring your cost considerably,” Dantes explained. More so, there is a considerable benefit of employing the pay-per-use scheme in terms of the equipment used in hospital operations. Dantes shared that Cardinal Santos has partnered with suppliers which can provide them with medical equipment under the pay-peruse scheme. “In Singapore, a multinational company rents out cath lab machines which were sampled in
India. The turnaround time for the usage for that pay-per-use cath lab machine gives them an ROI in one year,” she related, saying that a small hospital would not be able to afford to buy such machine at the get-go given its PHP50m price tag. “If you are a small, pay-per-use is the way to go, and if there’s a company that is willing to finance you, this is one way of financing your operations.” Meanwhile, Dante said manpower costs will still be around 25 to 26% of the total cost of operations. “With the new law putting the minimum wage of nurses to PHP 25,000 (US$497), we’ve done our own computation and it will wipe out half of our net income after tax if it goes to implementation because it is not just the nurse that you are increasing.” Leveraging on HIS data For his part, Cardinal Santos Medical Center vice president and chief information officer Allan Bacallan presented how healthcare units can leverage on hospital information system (HIS) data in bettering services. “Over the years of my work at Cardinal Santos Medical Center, I have been constantly evolving the IT organisation into the go-to department for users’ needs for information guidance that supports decision-making for issues like expansion of services and markets, process flow optimisation, innovations, and improvements in patient satisfaction indices,” he raised. Bacallan noted how creating a real-time dashboard for operationstracking can help players understand the dynamics of their operations. He said for instance that a dashboard could tell the waiting time of the patients and turnaround time in ERs. “In our hospital, we are targetting three hours. We want to use the dashboard to monitor that.” More so, the HIS data is increasingly being used in studying patient demographic, clinical outcomes, revenues and costs, the behaviour of employees and health providers, and even back-office systems like supply chain system.” You can even gather information to know the loyalty level of your patients,” he added. By Kiersnerr Gerwin Tacadena HEALTHCARE ASIA 27
ANALYSIS: HEALTHCARE CHALLENGE
Health policies on pricing must be reviewed
The new healthcare market challenge Tapping into South-East Asia’s healthcare market requires understanding the vast economic, sociodemographic and political differences in the ten countries that make up this region.
ltering landscapes in South-East Asia will unleash enormous healthcare demand from 9% of the world’s population living in the region. An environmental scan reveals the biggest opportunities for healthcare companies now lie in Indonesia, Philippines and Vietnam. As BRIC healthcare markets slow, South-East Asia is surfacing as an attractive region. The Economist Intelligence Unit anticipates compound annual growth rate of healthcare expenditure in Indonesia and Philippines from 2016-20 – at 10.6% and 10.8%, which will exceed growth in the BRIC countries. In the BRIC group, growth rates ranging 4.12% to 10.3% for each country are forecasted for the same period. The numbers reflect rising and changing healthcare demands that are receiving increasing attention from government payers and local healthcare consumers. At the same time, accelerating health and regulatory reforms in the region promise better healthcare access for 630 million people across the ten countries in South-East Asia. To reach this market, however, a range of challenges common to emerging healthcare demands need to be addressed – deciphering government health policies that impact pricing and reimbursements, sustaining profits on local levels of affordability and delivering products in underdeveloped healthcare systems. Singapore and Brunei are the region’s most mature
28 HEALTHCARE ASIA
To reach this market however, a range of challenges common to emerging healthcare demands need to be addressed.
healthcare market and also the two smallest countries by population size in the region. Having established a strong healthcare system, Singapore is test-bedding innovative healthcare delivery to solve key healthcare challenges like ageing and the management of chronic diseases. An initiative to establish ‘Superplatforms’ in healthcare clusters to co-develop and experiment the use of new healthcare solutions and technology across the continuum of care with industry partners was launched. Maturing healthcare markets In Malaysia and Thailand, the development of local healthcare systems has created more choices for patients in the country. Dominant players in the market have emerged. In Thailand, the region’s second-largest pharmaceutical market, locally produced pharmaceuticals account for some 75% of the sales. In Malaysia, multinationals have secured local distribution channels to distribute drugs and medical devices. Fragmentation in the market will further dissolve. Malaysia’s Ministry of Health is in plans to spend US$356m to facilitate sharing of data across hospitals and clinics to create greater public and private healthcare integration, and more uniform care throughout the country. `The Economist Intelligence Unit anticipates healthcare spending in Malaysia will grow at rates almost three times that in Thailand – compound
ANALYSIS: HEALTHCARE CHALLENGE annual growth rate of healthcare expenditure in Malaysia from 2016-20 is forecasted at 8.9%, compared to Thailand’s 3.2% South-East Asia’s high-growth powerhouse triad Three powerhouses of healthcare market growth are found in South-East Asia’s most populous countries – Indonesia, Philippines and Vietnam. Each country boasts healthy annual GDP growth of 5-7% for the forecasted period of 2016 - 2020. Economic growth will fund public health expenditure on infrastructure and expanding public health insurance coverage. Private health expenditure also looks set to continue to grow. The size of the middle and affluent class in each country is set to expand rapidly and boost household consumption. Compared to 2016, there will be 41 times more households in Vietnam in 2020 with annual earnings above US$50,000. By 2020, there will be more than 51.7 million households with annual earnings above US$10,000 across the three powerhouses, significantly higher than the 27.1 million households earning the same amount in 2016. The biggest barrier – healthcare delivery is also being addressed. A planned increase of 100,000 hospital beds across Indonesia, Philippines and Vietnam, by 2020 will help close in on hospital bed capacity needed by the region. To address poorly distributed and overburdened healthcare facilities, bigger government budgets have been allocated for healthcare infrastructure upgrades. The 2016 budget for Philippines’ Health Facilities Enhancement Program (HFEP) for both rural and urban facilities is more than double 2015’s budget. 28% of the HFEP budget— PHP 7.7b (US$165m), an amount larger than the entire HFEP budget in 2012, will be set aside for the acquisition of new hospital equipment. A programme to develop Vietnam’s health facilities initiated in 2015 will see US$1.3bn invested in purchasing medical equipment and building infrastructure.
Growth opportunities are few and far between for companies to deliver healthcare in the premature local healthcare system.
Greenfield opportunities in South-East Asia Myanmar’s eventual ascent to a high-growth healthcare market on our long-term outlook places it as a market to watch. Myanmar has increased government spending on healthcare by more than 8 times from 2011 to 2015 and aims to provide universal health coverage for its population by 20305. However, growth opportunities are Analysis of major country groups in South-East Asia’s healthcare
Source: The Economist Intelligence Unit, Clearstate Analysis
few and far between for companies to deliver healthcare in the premature local healthcare system. Recent political changes – democratisation and the country’s reengagement with the West can unsettle Myanmar where the political clout of the army are remnants from 50 years of military rule put to an end in the 2015 parliamentary election. Close study of the larger political and economic landscape is essential for companies assessing local market opportunities. Cambodia and Laos remain undeveloped healthcare markets with the few government efforts around healthcare directed at providing basic care and tackling infectious diseases. Laos scaled up its Maternal, Neonatal and Child Health package providing a mix of preventive care and treatments to a larger population in 2011. In Cambodia where tuberculosis (TB) prevalence rates are among the world’s highest, a national TB programme provides free treatment. With insufficient government efforts to meet local healthcare demands, the private healthcare sector in Cambodia and Laos is a key care provider. Out-of-pocket payments and contributions from non-governmental organisations represent the largest share of healthcare spending. In Cambodia, malaria treatment is largely delivered by the private sector despite anti-malarials available free of charge at government facilities due to perceived poorer quality of the latter. Growing prevalence of non-communicable diseases (NCDs) are still sufficiently addressed by governments. Diabetes care, for instance, is not included in Cambodia’s basic healthcare package; and no clinical guidelines exist to support the use of NCD treatments in Cambodia. Consequently, most NCDs are diagnosed and treated in private healthcare facilities. Companies will have to figure a way to improve access to quality treatment at local affordability levels. In the following section, we review five mega-trends shaping South-East Asia’s healthcare landscape and identify the opportunities present in the market for pharmaceutical and medtech companies. Expanding coverage: The centrality of cost control The three most populous countries in South-East Asia are implementing Universal Health Coverage. If target timelines are met, 80% of South-East Asia’s population – through Universal Health coverage programmes in Indonesia, Philippines, Thailand and Vietnam, will have access to basic healthcare by 2020. Payers’ realisation that cost control is key to successful UHC implementation will generate enormous demand for generic drugs and low-priced medical devices. For the millions who remain undiagnosed and untreated because finances put healthcare out of reach for them, the recently launched Universal Health Coverage (UHC) insurance schemes promises to improve healthcare access. To achieve and sustain UHC, payers will have to finance and deliver UHC by reducing inefficiencies in healthcare delivery that is increasing costs for the government and finding more cost-effective medicine and medical devices. Two dominant groups of consumers in the healthcare market– the aged and the middle-affluent income groups are reshaping healthcare demand and creating HEALTHCARE ASIA 29
ANALYSIS: HEALTHCARE CHALLENGE new growth segments in the prevention and care of non-communicable disease areas. South-East Asia is undergoing a demographic and consequently, epidemiological transition. The size of the middle and affluent class in each country is set to grow rapidly and boost household consumption. Better living standards have reduced infectious diseases that historically plague these countries, but it breeds a new host of noncommunicable diseases (NCDs) – diabetes, cancer and heart disease. People who are living better are also living longer for the onset of age-related diseases to happen. By 2020, Indonesia will join the ranks of Singapore and Vietnam as an aging country – with more than 10% of the population being older than 60 years old. At the same time, urban and sedentary lifestyles where richer foods feature increasingly in local diets are increasing the prevalence of obesity – the precursor to NCD. Dual disease burden on the rise South-East Asia is going to face a dual burden of growing prevalence of NCDs while still experiencing a high incidence of infectious diseases. Unlike developed healthcare markets, the awareness and diagnosis rate of NCDs in South-East Asia are low. The International Diabetes Federation estimates that more than 12 million cases of diabetes remain undiagnosed in adults in South East Asia – that is more than the number of diabetic cases in Indonesia, a country with the highest number of diabetic cases in the region. To tap into the growing NCD segment, pharmaceutical and medtech companies will have to take on a more active role in helping the developing healthcare markets in South-East Asia adapt to the emergence of NCDs. Diagnosis of NCDs will receive increasing focus as awareness to prevent high healthcare costs required to treat late stages of the disease grows. The proportion of deaths caused by NCDs in Indonesia and Vietnam are now higher than the world’s average rate of 70%. In 2015, PhilHealth expanded preventive and diagnostic services covered under the Primary Care Benefit Package (TSeKaP) to tackle growing NCDs. Growth in the use of medical equipment to detect heart disease, predominant cancer types in local populations and complications from chronic illness will grow. Urban populations in South-East Asia continue to be afflicted by infectious diseases. The concentration of people in urban cities escalates the transmission of infectious disease. Vector-borne diseases are common in South-East Asia regions prone to flooding and typhoons. These infectious diseases afflict both rural and urban areas alike. In Philippines’ capital city, Manila, and its population of 1.6 million people is vulnerable to floods and water-borne diseases that come with it. Disease-carrying mosquitoes are also well-adapted to urban areas. City-state Singapore is seeing increasing dengue infections from the Aedes mosquito. The spike is also happening in the rest of South-East Asia, prompting countries to look into new innovative ways to control dengue. The world’s first dengue vaccine developed by Sanofi Pasteur is an option being explored by Singapore and Malaysia. 30 HEALTHCARE ASIA
Local healthcare capacities and capabilities gets a boost from increasing private investments. Maturing healthcare infrastructure will create medical hubs within the region to support the delivery of essential and innovative healthcare to local and foreign patients. To cope with rising and changing healthcare needs, various governments are taking steps to improve capacities and capabilities of local healthcare systems by incentivising private providers to enter the market. Bridging the gap Vietnam, for instance, introduced incentives to attract foreign investors with a 10% exemption of corporate income tax over first four years of a project in the health sector, and 50% subsequent tax break in following five to nine years. Private healthcare providers are now narrowing the gap between healthcare demand and access. Maximising the adoption of innovative treatments and diagnostic tests in lower tiered cities Private healthcare is expanding beyond large cities into secondary cities where incomes have risen faster than healthcare provision. Large private hospital groups like Indonesia’s Siloam Hospitals and Mitra Keluarga are expanding their development plans away from big cities to provincial capital cities in Surabaya and Semarang with rising affluence levels. Countries like Indonesia and Vietnam are trying to curb medical tourism outflows from the country by building up local healthcare capabilities to retain local patients. It is estimated that as many as 600,000 Indonesians and 40,000 Vietnamese travel overseas for medical treatment in a year. Intensifying international and regional economic integration initiatives in SouthEast Asia will improve local market access conditions that will enable foreign healthcare companies to compete more successfully for a share of the growing market. Smoother regulatory paths ahead for pharmaceutical and medical devices are expected out of the AEC. The ASEAN Common Technical Requirement and the ASEAN Common Technical Dossier have been developed to bring submission of application dossiers for marketing authorisations under a single product registration process. From “Southeast Asia: The new emerging healthcare challenge“ by The Economist Intelligence Unit Analysis of major country groups in Southeast Asia’s healthcare
Source: The Economist Intelligence Unit, Clearstate Analysis
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DR TIMOTHY LOW
Farrer Park hospital a beacon for good medicine
DR TIMOTHY LOW Chief Executive Officer, Farrer Park Hospital
aving been in Healthcare all my adult life, trained as a doctor and moving into management, I was painfully aware that hospitals, more than any other institutions lagged behind in innovations. The structure and precision of our medical training does not leave much room to experiment, in the words of Hippocrates “Primum Non Nocere”, first, do no harm. When I was first broached to head Farrer Park Hospital (FPH), I was intrigued by the fresh ideas the founding physicians had. This was one of those rare institutions that is founded, developed and managed by physicians. Their deep focus on innovation, technology driven by rooted principals of giving comfort, being fair and unlocking value to all stakeholders was indeed enticing. Officially opened in March 2016, the 220-bed facility incorporates the most advanced technology to support better decision making for improved patient outcomes and shorter hospital stays along with the ambiance of nature and art to enhance the patient and their family’s experience. FPH also has more than 450-accredited specialists, 18 operating rooms, a 10-floor specialist Medical Center, and is sited within Singapore’s first, fully integrated healthcare and hospitality complex, called Connexion which also houses a five-star hotel and spa. While the concept of a hospital near a hotel is not uncommon, to integrate it as seamlessly as we did, is novel. We have hosted many teams from universities to hospitals to learn about our seamless integration, providing ultimate convenience and cost savings to patients and their families, while ensuring the highest standards of privacy and infection control. Electronic medical record integration Aside from the physical construct, the hospital itself houses many firsts in Singapore. We were the first to fully outsource our linen management. Spearheading a new business stream for our vendor as well as freeing up more space and saving $750,000 annually. We were the first to fully integrate our electronic medical records with our meal system to give complete freedom for patients to choose their meals whilst knowing anything they are allergic to or unable to eat is automatically removed from their choices, thus improving patient safety, experience and saving over $120,000 in nursing man hours a year. We are also the first to integrate a fully digital building that allows for seamless flow of data throughout the facility, allowing doctors to have secured access on real time information on any test, procedure or even view live surgery on their smart devices, and enabling them to give instructions remotely. This makes decision making quick and efficient. We are small as far as Healthcare organizations go in Singapore but that makes us nimble. We inculcate in every employee the need to innovate, to have the ability, as an organisation to look beyond the traditional boundaries of healthcare and grasp opportunities quickly. I encourage my colleagues to challenge the status quo, instead of
32 HEALTHCARE ASIA
Challenge the status quo
‘why?’ we should be asking ‘why not?’. Whilst innovation is in our DNA, we stay guided by our founding principles of ‘Comfort’, ‘Fairness’ and ‘Value’. A typical private hospital would not carve out 15 gardens throughout the facility so that patients and families can have places to feel the warmth of the sun and breathe fresh air whenever they like. A standard businessman would not have fewer paid parking lots in land scarce Singapore, making them one and a half times the size of a standard lot to allow a patient on crutches to comfortably extend the car door fully to disembark. A normal project manager would not insist that contractors construct a curved sink so that surgeons will not have water dripping down his elbows after scrubbing his hands, or a bath bench with a cut out that allows patients to sit while washing themselves. This may seem unnecessary to some but they translate to actual benefits to people who ‘value’ it. strategy is simple. We take our responsibilities to patients, their families and the clinicians seriously. Attend to their needs, anticipate their wants, and find the best way to address these concerns through innovation and technology. By building relationships based on trust, delivering treatment based on expertise in an environment of comfort, is the basis of good medicine and ultimately, the foundation of good business. It has been almost two years now. It’s been an exciting journey. The team we have here has seen the growth of this hospital from a plan on paper to an award winning hospital. Officially opened only in March 2016, FPH has garnered over 10 awards locally and regionally. I could not have been more proud of my people. The passion and the heart they have for this vision. But my team here at FPH is not done yet. We are working hard to grow our vision of what good medicine is, and hopefully it will be a beacon for others to follow.
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