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RACE TO REFORM
Display to 31 October 2017
CHINA AND OTHER ASIAN COUNTRIES ARE SMASHING REGULATORY ROADBLOCKS TO ATTRACT HEALTHCARE INVESTMENTS
DATOâ€™ DR ADZUAN RAHMAN CEO, GLENEAGLES HOSPITAL KUALA LUMPUR p14
PHUA TIEN BENG, CEO MOUNT ELIZABETH HOSPITAL p16
HEALTHCARE DISSATISFACTION GUARANTEED A ROBOT A DAY KEEPS THE DOCTOR AWAY THAILAND IS PRESSURED TO REVAMP HEALTHCARE SINGAPORE TURNS TO AI FOR THE AGED
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I spent the last six months moving from one key ASEAN city to another for our Healthcare Asia Forum. I’ve met some of our readers, and a lot of industry experts who shared insights on industry issues. Through our channel checks with them, we found out that one of the most pressing policy challenges for the Thai healthcare system is identifying new sources of funding and reducing nonessential outpatient elements within the benefit package, whilst still safeguarding admission services and continuity of treatment for chronic conditions. An expert warned that the healthcare system may be over reliant on general taxation. Will Thailand be able to weather these challenges? This issue also fills you in on what transpired during the Healthcare Asia Forums in Malaysia, Singapore, and Bangkok. In one of our forum sessions in Kuala Lumpur, experts revealed that by 2035, Malaysia is expected to have reached the status of an ageing nation with 15% of the population above the age of 60. This looming problem is a global issue for most nations including Malaysia coupled with significant shortages in aged care. Singapore, on the other hand, is way ahead in its elderly care as forum speakers said that the country is gradually turning to artificial intelligence to take care of the elderly. In our leaders roundtable in Bangkok, Thailand’s main challenge is keeping up with the new healthcare technologies. One expert noted that patients are constantly hoping that the care they receive from hospitals are high-tech in nature, they want to experience using new hospital innovation, but they also do not want to pay extra charges entailed by this innovative service. Start flipping the pages and enjoy. 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
ceo INTERVIEW Gleneagles Hospital Kuala Lumpur taps Whatsapp to boost medical tourism
FIRST 04 A robot a day keeps the doctor away 05 Cyberattacks vs healthcare CEOs 06 Singapore is losing foreign patients 08 Why itâ€™s hard for the Philippines to raise compensation for doctors
10 IHH Healthcare rolls out billion-dollar expansion as local growth heads south
cOUNTRY REPORT Thailand is pressed to revamp healthcare
fEATURE pROFILE Mount Elizabeth Hospital sets new standard of care with pioneering tech
12 Asia rolls out game plan
22 Malaysiaâ€™s budding elderly care plays
as healthcare costs spike
catch up with the ageing population
24 Thailand struggles to strike a balance
between high cost, quality healthcare
20 Singapore juggles quality
26 Singapore is turning to artificial
healthcare, affordable costs
28 How healthcare firms can
intelligence for elderly care
monetise digital health
30 Venture capital funding in healthcare keeps rocketing
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FIRST correctly. A video conferencing feature is available to enable patients to consult therapists remotely and therapists are able to review their patients’ progress asynchronously via smart dashboards. “Patients will benefit from greater convenience, cost savings, and better outcomes. Therapists and therapy service providers will also benefit from the productivity improvements,” Chee says.
Dissatisfaction guaranteed HONG KONG
Hong Kong may be pressured to improve its public healthcare system as millennials clamour for improvements. 47% of them said that they are “quite unsatisfied” or “very unsatisfied” with the public healthcare system, according to Medix Medical Monitor Research. To make matters more rattling for Hong Kong’s healthcare professionals, 37% of the older working generation shared the same sentiment. Those who were dissatisfied with the healthcare system said they would prefer shorter waiting time for specialist consultations and treatments. An additional 23% of all respondents said they would like to see further strengthening and expansion of the public medical system, whilst 6% said they wanted to have the ability to choose their own doctor. Even the private healthcare sector did not go past the respondents’ eyes as 14% said they were “quite unsatisfied” or “very unsatisfied” with private care. Respondents also urged the private medical sector to pull down their costs (22%) and improve overall transparency (12%). Don’t ask, don’t tell Respondents are also having issues with being open to their doctors as majority of those interviewed in the study admitted to being reluctant to question specialists. Only half feel comfortable asking their doctors any questions, although women (58%) seem to be better placed in posing questions than men (50%). Sigal Atzmon, president of Medix Medical Services Group, says it is worrying that only half are comfortable with directly asking questions or raising doubts on health issues with their specialist. “This could have important implications for the care they receive, and the outcome for them and their family. Improvement of the transparency of the health system as information about clinical outcomes is lacking,” she adds. 4
Make way for Dr Robot
A robot a day keeps the doctor away SINGAPORE
trip to hospital for a rehabilitation appointment in Singapore could soon be a thing of the past as the country rolls out a home based telemedicine rehabilitation service. Called the Smart Health TeleRehab, the service allows patients to undergo their rehabilitation exercises at a time and location of their choice, through the use of wearable sensors and remote monitoring by therapists. “Smart Health TeleRehab could transform how therapy services are delivered in Singapore,” says Chee Hong Tat, senior minister of state for health, after visiting the home of a patient to view how Smart Health TeleRehab was deployed. The technology was developed by the National University of Singapore (NUS) Department of Electrical & Computer Engineering Technology and the Saw Swee Hock School of Public Health and works by detecting and measuring motor movements with sensors and algorithms enabling immediate feedback to patients on whether they are performing the exercises
Technology use in eldercare reduces the reliance of trained healthcare manpower.
Robotics for geriatric care Singapore is also applying the use of robotics to geriatric care, another growing need which can be more easily and cost effectively serviced from home. Dr Tan Jit Seng, director, Lotus Eldercare Health Services says technology use in eldercare reduces the reliance of trained healthcare manpower by empowering the patients and their family on the care supported by timely input of information to patients and their families or continual monitoring of chronic disease and early warning of flares or decompensation. “For instance, some elderly care facilities already use robots like Ohmni, ExoAtlet, and Loomo. Ohmni allows family members and caregivers to engage remotely over the Internet and check on the elders’ safety and make sure they follow their diet or medication. Geriatric specialists can also dial-in on-demand simultaneously to provide services. ExoAtlet, meanwhile, uses robotics for exoskeletal support, doing away with the stigma of using a wheelchair,” she said. Singapore is particularly pressed for healthcare manpower, so expect to see more use of robotics and home based telemedicine to ease the burden on hospitals.
AI in healthcare: Yearly financing history
Source: CBI Insights
CEOs get the jitters from cybersecurity challenges
Cyberattacks vs healthcare CEOs
hields are up for healthcare CEOs as they have begun to actively act against cybersecurity issues, if PwC’s annual global CEO survey is anything to go by. A whopping 63% of top executives in the healthcare industry are now tackling breaches in data security and ethics, higher than the global average of 43%. Almost half (48%) are taking proactive efforts to address cybersecurity threats despite 61% of them saying that cybersecurity is a key risk to stakeholder trust and
Medical records usually contain payment and billing information, leaving credit card information exposed.
another 75% saying they’re deeply concerned about cybersecurity threats. Nine in ten healthcare CEOs believe breaches of data privacy and ethics will affect stakeholder trust in the near term, and 67% said that artificial intelligence and automation will further affect trust levels in the future. Patrick Figgis, PwC’s global health services leader, says the healthcare industry is still at odds on how to harness its capabilities and mitigate the issues that could arise. “Most
healthcare CEOs believe it’s harder for businesses to gain and keep trust in the digital world as data security and ethics have become key risks to stakeholders’ trust,” he explains. Graeme Pyper, regional director at Gemalto, agrees and adds that the healthcare industry is becoming a popular target for hackers and data thieves. Medical records usually contain payment and billing information, leaving credit card information exposed, but they also often contain information that could enable a hacker to obtain medical services under the victim’s identity and private healthcare insurance benefits. “In order for healthcare firms to combat ransomware and guarantee the protection of their patients’ data, they must move to a framework that centres on the data itself. Organisations need to provide protection that stays with the data,” Pyper says.
CEOs concerned about cyberattacks as potential business threats to their organisations
Source: PwC’s 20th CEO Survey
The Chartist: ASIA’S healthcare spending to nearly double between 2017-2026 The Asia Pacific healthcare sector’s growth trajectory will be decidedly positive, according to BMI Research. The expansion of universal healthcare across the region will boost utilisation of medical services, even as the prevalence of chronic diseases rise in tandem with the shift in lifestyles and an ageing population. “Consequently, private healthcare providers will be highly active, expanding their presence and undertaking measures to attract medical tourists within Asia. The US$1,690b/ EUR1,527b Asia Pacific market is forecast to expand to US$2,271b/EUR2,271b with a 8.1% CAGR at constant exchange rates through to 2021. The US$128b/EUR115b South Asia market will be a strong driver of growth (12.3% CAGR through to 2021), followed by the US$114b/EUR103b Southeast Asia market.
Healthcare expenditure forecast
Sources: World Health Organization, BMI
Expenditure forecast vs other regions
Source: BMI Research
FIRST NO BILLION-DOLLAR GROWTH YET KUALA LUMPUR
Singapore is losing foreign patients SINGAPORE
Fabian Boegershausen, Solidiance
Healthcare Asia caught up with Fabian Boegershausen, manager at Solidiance, as he shares his forecasts on Malaysian medical tourism growth. What is Malaysia’s current status in medical tourism growth? It would definitely grow somewhere above 10% for sure, but I haven’t done any formal forecast or detailed modeling, it’s just gut feel. If you see how it developed over the last couple of years, you’ll still see double digit growth, but it’s not going to be an explosive growth, like everybody else hopes for. The reason for that is there are too many bottlenecks to overcome, still many uncertainties in the system. Just look at the currency and how it’s performing. But if you think about the fact that how medical tourism is growing worldwide, how the demand is soaring in Southeast Asia, and how all of these things are slowly improving in Malaysia, I’d say we are going to see maybe 10% or 15% growth. It’s enough to say that the industry is improving--you can bet on that card, but you will definitely not be seeing billion-dollar investments anytime soon. What’s the most interesting change in the Malaysian industry? I think the most interesting thing is that it is working hard towards improving medical tourism. One of the key changes I’ve seen is the emergence of new business models. People would say “I can’t run a medical business myself but I can become an intermediary.” This means making the market more transparent and efficient, and competencies in treatments and procedures are traded over a platform. If we can get more people to use such platforms, then we can provide the SMEs and other smaller clinics in the country the chance to participate in the wider market and also force the larger institutions to become more competitive in the industry.
f you’re seeing less foreigners walking around in Singapore’s hospitals, it’s one of the signs that Singapore is starting to lose foreign patients one by one as competitive pressure from neighbouring ASEAN countries takes its toll on foreign patient growth. Private healthcare group IHH is one of those feeling the pinch as its local-to-foreign patient mix used to be in the 60:40 ratio but has shifted to 70:30 in 2016. UOB Kay Hian analyst Andrew Chow adds that Raffles Medical Group has also seen a slowdown in medical tourism in the past years. This, he says, isn’t a good sign for Singapore’s medical tourism segment. “We are expecting patient growth to stem largely from local patients, underpinned by favourable demographic trends such as ageing demographics as well as rising income levels. Moreover, we continue to expect spillover effects from public hospital, taking into consideration that bed occupancy rate in public hospitals still remained very elevated (82%-97% based on latest data v 60-70% at private hospitals), even exceeding the standard levels (82-85%) by Australian Medical
Are days of medical tourism peak over for Singapore?
Association and Australasian College of Emergency Medicine,” Chow says. What to blame One of the biggest reasons behind the gradual slowdown in foreign patient growth is the appreciation of the Singapore dollar, according to Jonathan Tan, a doctoral candidate at Singapore Management University with a decade of healthcare experience. “The strong Singapore dollar, which appreciated roughly 30% against the Indonesian rupiah, intensified the negative outcome and further hurt Singapore’s medical tourism receipts. The changing landscape of medical travel has posed challenges to Singapore. It is now lagging behind Thailand and Malaysia for medical patients from Indonesia Singapore is now lagging and the Middle East. According to the 2013 annual tourism statistics by the behind Thailand and Singapore Tourism Board, medical receipts has seen a steady growth from Malaysia 2009 to 2012 before dropping 25% for medical patients from year-on-year to US$607.4m in 2012 from US$803m in 2013.” Indonesia.
This company aims to break the stigma of ageing SINGAPORE
Senescence Life Sciences is a Singapore-based health company that uses advanced technology in neuroscience to combat brain ageing. The company aims to break the stigma of ageing by cultivating a mindset where people can look forward to growing older and living life to the fullest. “We apply the latest research in age-related cognitive decline to develop scientifically supported supplements that contain neuroprotective compounds extracted from natural ingredients to combat brain aging,” says Dr Shawn Watson, founder and chief executive officer of Senescence Life Sciences. The company recently raised almost US$2.2m in funding and is in discussions with several institutions and organisations on potential collaborations for research and clinical trials around our products efficacy in slowing down age-related cognitive decline and relief of dementia symptoms. Dr Shawn Watson
co-published Corporate profile
Paving the way for the digital transformation of healthcare Siemens Healthineers developed a cloud-based network called “teamplay” to meet the demands of a digitalised industry.
ealthcare Asia caught up with Elisabeth Staudinger, President of APC, Siemens Healthineers, to discuss the industrialisation of healthcare, as well as how customers can get on top of the digital transformation. What healthcare trends are you currently addressing arm-in-arm with healthcare providers? Globally, and even more in Asia Pacific, we see the demand for healthcare, as well as the cost of healthcare rising. I believe that one way to address this challenge is through innovative products and solutions. Another trend is that of healthcare providers merging to gain competitive advantages through more specialised offerings. Within Asia Pacific, Australia is a good example for this consolidation: We are looking at only a handful of providers, who run very large scale operations. We notice this trend in most developed countries around the world: The average deal size for hospital acquisitions in the U.S. has grown five times the volume
Elisabeth Staudinger, Siemens Healthineers
size in just six years - from 42 Million USD to 224 Million USD. We are also witnessing an industrialisation of healthcare: Our industry is increasingly taking cues from other industries such as manufacturing. Just think of their success factors such as short waiting times, reduced space requirements or low error rates. That sounds familiar to our industry, right? To meet this demand, we at Siemens Healthineers have developed a cloud-based network called “teamplay”. How does it work? It allows users to analyse, benchmark, optimise and standardise the utilisation of their imaging equipment across multiple sites. Idle times of machines but also waiting times for patients can be reduced. Especially for large consolidated healthcare providers, standardisation and delivering the same level of care within all parts of an institution is very important. What are Siemens Healthineers’ plans in expanding and strengthening its foothold in the Asia Pacific region? Asia Pacific is a very diverse region in terms of economics, language and culture – and hence, market requirements. We as Siemens Healthineers are present in every major country in the region. What’s more, we can count on an extensive network of carefully selected partners, which we are continuously expanding, especially to increase coverage in rural areas. On top of that, we clearly have the right portfolio and a great global reach: Every single hour, more than 200,000 people worldwide are being diagnosed or treated with our devices. And in the past year alone, we’ve launched a variety of products under our new name. Let me give you two examples: For one, in the field of Laboratory Diagnostics, we’ve developed Atellica Solution, a new lab automation system. It comes with a special sample transport technology which makes it ten times faster than conventional technologies. Furthermore, it delivers the industry’s highest productivity per square meter – more than 400 tests per hour. Secondly, in the field of value-based healthcare, we’ve introduced SOMATOM Go., an entirely new platform for computed tomography (CT) at a very affordable price. It offers automated, standardised workflows
that help users achieve profound clinical results. The multi-year service packages and corresponding high financial reliability help our customers to run their business predictably and successfully. What is Siemens Healthineers’ top three priorities for Asia this year? We are keen on helping healthcare providers to get on top of the ongoing digital transformation. The aforementioned ‘teamplay’ is one part of the puzzle. Based on teamplay’s technology, we’re currently building a platform, a Digital Ecosystem, which is linking healthcare providers and solution providers, as well as their data and knowledge. We have already teamed up with partners whose offerings will be integrated into our Digital Ecosystem. And we are keen to grow this platform further, paving the way for the digital transformation of healthcare. We have set ourselves ambitious goals: Worldwide, we would like to connect 1,000 customers via teamplay in the course of this year. And we are keen to grow this platform further, paving the way for the digital transformation of healthcare. We have set ourselves ambitious goals: Worldwide, we would like to connect 1,000 customers via teamplay in the course of this year. Furthermore, we are currently expanding our eHealth offerings, e.g. for teleconsultation, or patient and physician portals. Recently, we have entered into the field of population health management by forging a global alliance with IBM Watson Health. By that we aim to help hospitals, health systems, integrated delivery networks, and other providers deliver value-based care especially to patients with complex, chronic and costly conditions such as heart disease and cancer. We’re continuously expanding our value-added services. We have been entering into so-called long term enterprise services contracts with customers. Those agreements have life spans of up to 40 years. Only recently, we agreed with a newly constructed hospital in Perth, Australia, on procuring, installing, and managing the entire base of medical devices. And we have a team on-site in charge of running biomedical services within the hospital. These kinds of projects make me very proud as they show that customers are having great trust in us. Disclaimer: “The products/features (here
mentioned) are not commercially available in all countries. Due to regulatory reasons their future availability cannot be guaranteed. Please contact your local Siemens organization for further details.” HEALTHCARE ASIA
Why it’s hard for the Philippines to raise compensation for doctors
ZEROING IN ON GERIATRICS
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. Elvira Dayrit, director for Health Human Resource Development Bureau (HHRDB) of the Department of Health (DOH), notes that the government has set up a plan to mitigate the dearth of doctors the country is currently facing. Citing data from the Commission on Filipinos Overseas, Dayrit notes 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 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 says. However, looking at how this affects the Philippines, the prospect is not quite healthy. Referring to a 2007 data, Dayrit reveals that seven 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. Doctors fleeing The migration of doctors may very well be due to the low compensation they are getting, Dayrit argues. According to data from HHRDB, resident private doctors earn as low as US$358 monthly. A medical assistant in the US earns up to US$59,317 per year, compared to around US$4,151 annually for a local private physician. “Can we blame them from running away?” Dayrit asks. She stresses that the blame could not be thrown at the Department of Foreign Affairs for not limiting immigration of health workers. “The DFA does not want to limit immigration of health workforce because it brings in money to the country. In general, we do not want to limit migration and mobility,” she argued. Given that the government could not control the migration of doctors, Dayrit said that there should be controls embedded in the code of practice instead. One solution is the utilisation of nurses, which the Philippines have a supply glut of. “Only half of nurses pass the exams. The government is now thinking of using nurses in doing other tasks,” she says.
Zeroing in on malaria in the Asia Pacific region SINGAPORE
Malaria statistics for Asia are not reliable in terms of absolute numbers because no government agency captures all cases of malaria and its outcomes. According to Prof Kevin Baird from Oxford University Clinical Research Unit, some patients will delay seeking any treatment at all until they are are in deep trouble. “Very often, these are the people who have the hardest time getting to healthcare. Sometimes, they wait too long and never make it to a treatment centre. All of these people just mentioned are not seen or counted by health systems,” he says. This is what Prof Baird and Singaporean photographer Pearly Gan wants to portray in their “See Malaria in Asia Project” – that one can’t truly know the malaria situation if it isn’t seen. The exhibition will be held in September 2017 at the National Library in Singapore. “It is intended to alert the lay public to the problem of malaria in the region,” Prof Baird says.
Blood film from a febrile patient
Victim recovering from fourth malaria attack
Dr Chui Tak-Yi, UCH
Healthcare Asia interviewed Dr Chui Tak-Yi, CEO of United Christian Hospital (UCH), as he talks about UCH’s specialised geriatric services. What are the recent steps UCH is undertaking in the geriatric space given Hong Kong’s ageing population? 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. The OrthoGeri Specialty Ward incorporates several elderly-friendly features, using warm colours for different cubicles, bigger and more readable signage, and speciallydesigned toilet doors to allow fast access The increasing volume in UCH’s patients has created several problems, with long queuing periods primary among them. We developed the Specialist Out-Patient Clinic Queue Management System (SOPC-QMS), which provides real-time announcements of the consultation timeslots. Do you have plans for expansion? The emphasis of the UCH Expansion Project is the construction of a 23-storey Ambulatory Block and the strategic framework of service enhancement is “CARE”, signifying the enhancement of Cancer, Ambulatory, Rehabilitation and Emergency services. A new Oncology Centre will be developed to provide one-stop services including radiotherapy, chemotherapy and psychosocial care for cancer patients of Kowloon East. The ambulatory block will house the expanded SOPC, day and rehabilitation services. The total bed capacity including inpatient and day beds will be increased to around 1,960. The expansion project will be implemented in two stages, comprising preparatory works and main works. The preparatory works include site surveys and investigations and decanting works, while the main works include demolition of existing Blocks F, G, H, and low block of Block P, construction of a new ambulatory block, construction of an extension to Block S, refurbishment of Blocks S, P and L, as well as landscaping and road works. The expansion project is anticipated for completion in 2023.
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FIRST The Analysts’ call
Will IHH’s foreign expansion backfire?
No way but out for IHH Healthcare
IHH Healthcare rolls out billion-dollar expansion as local growth heads south CHINA
ggressive expansion is the name of the game for IHH Healthcare with its new hospitals in China as its new keys to growth, but analysts caution that profits will come at a steep price. The Singapore-listed hospital operator is wooing wealthy Chinese patients by launching three swanky new facilities worth over US$1.1b in mainland China over the next three years, which closely follows the opening of its 500bed multi-specialty hospital in Hong Kong in March this year.
Whilst we view these expansions positively, we expect start-up costs to crimp earnings growth in the near to mid-term. Foreign expansion has always been its weapon of choice to counter shrinking profits at home. Whilst analysts believe that its ongoing foray into China will be successful in the long run, they also caution that the group’s return on equity will be adversely impacted by long gestation periods following the huge initial capex to purchase prime land and build state-of-the-art hospitals. “Whilst we view these expansions positively, we expect start-up costs to crimp earnings growth in the near to mid-term. Typically, 10
we estimate new hospitals to take an average of 18-24 months’ runway before reaching breakeven level,” notes Thai Wei Ying and Andrew Chow, analysts at UOB Kay Hian. Battling the medical tourism slump IHH’s Singapore operations used to be buttressed by robust medical tourism, but the group can no longer rely on foreign patients as competitive pressures from neighbouring ASEAN countries grow. Instead, UOB Kay Hian expects the group’s local growth to be driven by Singapore patients. “We expect patient growth to stem largely from local patients, underpinned by favourable demographic trends such as ageing demographics as well as rising income levels. Given that the number of lower-margin local patient growth is expected to outpace that of higher-margin international patients, we expect revenue intensity growth to soften in Singapore,” says UOB Kay Hian. Given this unfavourable backdrop, it’s no wonder that IHH is seeking greener pastures abroad to drive growth. “Most healthcare players have started more aggressive overseas expansion since 2014. Most Singapore players have built a widelyrecognised brand name among the locals and medical tourists, from many years of delivering good quality healthcare,” explains John Cheong, analyst at Maybank Kim Eng. “Notable projects include IHH’s acquisitions of two hospital groups in India.”
Thai Wei Ying and Andrew Chow, UOB Kay Hian We like IHH for its resilient operations in key home markets across Singapore, Malaysia, and Turkey, whilst new ventures in growth markets such as Hong Kong, China, and India will provide growth impetus for the next 5-10 years. With private hospital operators embarking on aggressive overseas expansions, we believe near-term earnings will be hampered by expansion costs. Using IHH’s Singapore operations as a benchmark, we note that despite relatively strong growth in patient load, quarterly revenue intensity growth has been on a decline since 2013. Whilst quarterly growth used to track an average of 5% yoy between 2013-14, it has declined to the level of 1-2% yoy between 2015-16, which we estimate to be the normalised level going forward. Whilst we remain positive on the long-term growth strategy of RMG and IHH, we believe mid to near-term growth outlook will be hampered by elevated expansion cost. John Cheong, Maybank Kim Eng IHH is a proxy to the premium healthcare space in countries with rapidly growing demand. It is a healthcare leader in the premium hospital segment with a strong brand name. IHH has strong track record of building up operations in markets lacking medical-pricing regulations and targets to scale up in markets where demand for premium healthcare is rapidly growing. IHH’s home markets include Singapore, Malaysia, Turkey, and India, whilst its key markets are Hong Kong and China. To sustain future growth, it has more than 3,000 new beds (+30%) in its pipeline. New Gleneagles Hong Kong (500 beds) in 1Q17 should contribute in the medium term. Beyond 2020, China and India should lead growth. The Hong Kong hospital, which started operations in March 2017, is ramping up progressively and startup costs have been kept within expectation.
Healthcare insight: HEALTHCARE REFORMS
How to cope with rising healthcare price tags
Asia rolls out game plan as healthcare costs spike Asian economies are aggressively dismantling regulatory roadblocks to attract investment, cover healthcare expenses, and boost R&D.
t’s no secret that China is a regulatory nightmare for many healthcare companies as it takes at least two years for most drugs and medical devices to obtain the necessary licences to be sold nationwide. Pharmaceutical companies also face significant price pressures to slash bidding prices, sometimes by as much as 30%. As if these weren’t bad enough, the healthcare system is highly centralised and large hospitals are over utilised. But as its population ages and healthcare spending soars, Chinese regulators have finally recognised the need to overhaul the system. “The goal of the recently launched healthcare reforms is to enhance the quality, coverage, and sustainability of the Chinese healthcare system,” notes Michael Custer, an analyst with Solidiance. He explains that the reforms will likely result in 12
The goal of the recently launched healthcare reforms is to enhance the quality, coverage, and sustainability of the Chinese healthcare system.
“daunting” cost challenges for both local and multinational healthcare firms. Despite this, China remains an attractive market because the demand is big enough for multinationals to find and carve out profitable businesses with the right strategy and understanding of the market. China is not alone in rolling out long-overdue healthcare reforms. Across Asia, countries are scrambling to overhaul their healthcare systems, most of which are ill-equipped to deal with the challenge of rapidly changing demographics. Targetting multinationals A key goal of healthcare reform is attracting more multinational companies to set up shop in developing Asian economies. “Markets across Asia are continually acting to increase the competitiveness and attractiveness of the life sciences
industry for foreign multinationals,” says Andrew Chen, Asia-Pacific life sciences transactions co-leader, EY Shanghai. Chen notes that Asian countries have rolled out a multi-pronged approach to boost their respective healthcare sectors. For instance, India has undertaken several initiatives, including encouraging public-private partnerships (PPPs) in R&D projects and increasing focus on infrastructure to establish the country as one of the world’s major pharmaceutical innovation hubs. Meanwhile, Australia and China have implemented sectorfocused innovation plans to boost investments, along with reforms to expedite drug approvals. Other Asian countries are dealing with problems of counterfeiting and patients’ inadequate trust of the industry. For example, Indonesia and the Philippines are adopting stringent measures to contain the spread of counterfeit medicines, whilst Australia and South Korea are increasing transparency between pharma-physician-patient relationship through mandatory physician payment disclosures and
Healthcare insight: HEALTHCARE REFORMS hefty penalties. Similarly, India is strengthening its pharmacovigilance programme by making the pharma companies take on more accountability for drug safety. Apart from dealing with structural issues, Asian countries are also steadily moving towards digitalisation. “The life sciences industry in the region is also inching toward digitalisation, with both industry and government playing an important role,” Chen says. A fine example is South Korea, which is working towards becoming a global biotech and medical industry hub with focus on biosimilars, stem cell therapies, and 3D printing of medical devices. Meanwhile, Taiwan has dedicated an initiative to enhance its position as a major biomedical market in Asia, and Vietnam has lifted the cap on foreign investments in the pharma sector. Meanwhile, China’s government is developing a national digital platform that will enable data sharing and is introducing digital medical identification and signatures. At the same time, pharma companies in India and the Philippines are developing mobile applications to enhance patient experience and to educate different stakeholders. Establishing digital health hubs Asian economies are correct in attempting to attract more multinationals. Chee Hew, senior principal for Asia Pacific at Clearstate, a business of The Economist Intelligence Unit (EIU), argues that multinationals have a critical role in driving innovation and the application of technology to healthcare challenges on a large scale. “In an environment in which both startup firms and technology giants have a strong presence, healthcare multinationals are well positioned to drive innovation and the application of technology to major healthcare challenges,” Hew notes. “The value offered by digital healthcare lies in the way in which companies can apply recent breakthroughs in science and technology to different healthcare challenges to bring value to users,” EIU says. Healthcare ecosystems are changing, with more intelligent
health enterprises emerging to drive smart healthcare in ways that improve patient outcomes and bring down the cost of healthcare delivery. Empowered by technology, patients and consumers are becoming more active in healthcare. These factors will drive the emergence of a healthcare industry that will be vastly different from that in the past. “Pharmaceutical and medtech multinationals have the domain knowledge and influence that can enable them to lead innovation and application of technology at scale that will catalyse the transformation of entire healthcare ecosystems, thereby speeding up the adoption of digital health around the world,” Hew notes. Companies have tended to create digital health centres in cities with high concentrations of technological innovation activity, such as San Francisco and Boston in the US. In Asian markets, by contrast, digital health efforts are focused on achieving basic standards of care, such as supporting affordability and access to care for people living in rural areas and places with a shortage of doctors who can deliver more complex care. “For digital health to take off, there must be a fundamental shift in how stakeholders collaborate,” Hew says. “Multinationals can seed change in a number of different markets more effectively and quickly by setting up centres for digital health in strategic locations with high digital density, leading to the formation of digital hubs.” Cost is king All these reforms are focussed on a single goal: lowering healthcare costs across the board. “Change is the new normal for the global healthcare sector. However, the pressure to reduce costs, increase efficiency, and demonstrate value will continue to intensify. This shift is being fuelled by aging and growing populations, the proliferation of chronic diseases, heightened focus on care quality and value, evolving financial and quality regulations, informed and empowered consumers, and innovative treatments and technologies — all of which are leading to rising costs and an increase
in spending levels for care provision, infrastructure improvements, and technology innovations,” says Mohit Grover, Life Sciences & Health Care industry leader at Deloitte, in a co-authored report. He expects healthcare spending growth to rise to over 6% a year in 2017 and 2018. Growth in several markets, particularly in Asia and the Middle East, will be particularly rapid, driven by the development of both public and private healthcare systems. In addition, the trend towards universal health care is likely to be a growth driver in numerous markets. The role of cost is “so pivotal” that it is at the core of the many issues — demographic, financial, operational, innovation, and regulatory — impacting sector stakeholders in the coming years. “The way forward is clear: sector stakeholders must look for ways to decrease costs, given the consensus that the current upward trajectory is unsustainable. In addition to demographic, financial, operational, innovation, and regulatory considerations, three macro issues are framing the cost discussion: sector defragmentation, the shifts from episodic care to population health management and from volume to value-based care, and efforts to deliver effective, efficient, and equitable care,” Grover says. However, whilst most people fear that increasing healthcare costs will result in negative situations, this apprehension will not necessarily come to pass. Whilst there may be administrative waste, rising insurance premiums, and expensive care for chronic diseases, increasing costs can also signal positive developments.
Utilisation and number of public and private hospitals in China
Sources National Bureau of Statistics, Solidiance
GKL has made a mark as an international centre of excellence in specialties of orthopaedic, neurology and neurosurgery, as we accept complicated cases from far afield as Libya. We are also one of the centres regionally for cardiothoracic surgery, especially for children.
Datoâ€™ Dr Adzuan Rahman Predee Daochai CEO President Gleneagles Kasikornbank Hospital Kuala Lumpur 14 HEALTHCARE ASIA
Gleneagles Kuala Lumpur taps WhatsApp to boost medical tourism CEO Dato’ Dr Adzuan Rahman shares that Gleneagles KL has been active in attracting more patients, both residents and international, through high quality services and facilities.
ealthcare Asia recently caught up with Dato’ Dr Adzuan Rahman, CEO of Gleneagles Kuala Lumpur, as he shares the hospital’s recent strategies in keeping up with the industry digitalisation. It has recently built a new annex which was part of a RM220m (US$51m) investment to upgrade the hospital’s facilities. The new building increased the hospital’s bed count by 100 beds along with 50 new consultation suites. What are the latest innovations, developments, and strategies to improve the quality of service of Gleneagles Kuala Lumpur? Gleneagles Kuala Lumpur (GKL) has built its reputation over the years as one that delivers some of the best healthcare services not just in Malaysia but in the region. This reputation has in itself created a positive cycle in upholding delivery of quality services. At GKL, we judiciously invest in the technologies that are evidence based and not merely announcing our latest medical tools. With this, we ensure that we invest wisely so that the desired outcome is delivered, fitting the purpose of such investment. We also look at investing in tools that increase staff productivity and enhance the patient experience. To this end, we are adopting various tools leveraging on digital technology. Do you have plans for expansion? Could you elaborate on them? Owing to increased demand, GKL expanded and effectively doubled its floor space hence providing more integrated specialist centres with multi-disciplinary team services. This will ensure our patients get the best healthcare service from us in GKL. What are some of the challenges facing Gleneagles Kuala Lumpur and how do you plan to address them? The country is facing economic uncertainties that have affected the private healthcare consumption across the board. Being frugal means spending your money wiselythe review or complication rate matter, and may costs the patient more in the longer term with increased morbidity and affecting work productivity. There are significant costs in setting up quality healthcare services that many may not be aware of. GKL has invested much in ensuring that the commitment is delivered, looking at investments that are evidence based and with good outcome measures while continually communicating these to the public. Hitherto, GKL’s mark in quality healthcare is recognized by international certification bodies like Joint Commission International, ISO, HACCP and Halal standards amongst others. GKL has also won numerous national and
international awards over the years. Is Gleneagles Kuala Lumpur involved in medical tourism? If so, please describe the hospital’s involvement. GKL has made a mark as an international centre of excellence in specialties of orthopaedic, neurology and neurosurgery, as we accept complicated cases from far afield as Libya. We are also one of the centres regionally for cardiothoracic surgery, especially for children. We are particularly renowned for complex general surgical procedures including those for cancer. We recognise that medical tourists are different from Malaysian residents, as they are in unfamiliar surroundings, compounding worries of their own health. Therefore, providing them with a seamless experience by truly understanding and supporting their needs is key. Patients with good experience are the powerful promoters for the hospital. As part of the initiative, we recently launched a WhatsApp service (+6016-3393000) for both Malaysia and international patients, through which patients can make enquiries on specialists or arrange for clinic appointments. Is there anything else you would like Healthcare Asia readers to know about Gleneagles Kuala Lumpur? Choosing healthcare services can be confusing for the patient and it is advisable to seek appropriate and reliable advice. The most important thing is that patients should be getting the correct diagnosis and treatment from their specialists. We truly believe that GKL is the byword for quality where patient experience and good treatment outcome are our tenets. At GKL, medical care is top-notch, the hotel-grade rooms are cheery, and the food tasty and healthy. Patients’ stay here will almost be a home away from home but equipped with medical expertise, attention and facilities. There are 369 rooms to choose from – a Presidential suite, to a variety of suites, single, double and quad-sharing rooms. Whichever room comes with six complimentary meals (3 mains and 3 snacks) included in its rates. All food served are Halal. What are the previous positions you’ve held prior to being the CEO of Gleneagles Kuala Lumpur? After graduating from medical school in the UK, I had practiced as a doctor for some years before joining the corporate world. My corporate career brought me to work across various European and Asian countries. Experiences in clinical work and the corporate career journey have proven to be invaluable to both my personal and professional development. Before becoming the CEO of Gleneagles Kuala Lumpur, I was the CEO of a hospital in Singapore which is part of the same healthcare group. HEALTHCARE ASIA
Mount E’s flexible rooms are changing the game
Mount Elizabeth Hospital sets new standard of care with pioneering tech One-of-a-kind flexible rooms and remote monitoring of patients’ vital signs are just a few of the hospital’s newest innovations that caters to various demands from clients.
t Singapore’s Mount Elizabeth Hospital, nurses will soon no longer need to barge into patients’ rooms in the dead of night in order to check their vital signs. “Every patient’s safety is of utmost importance to us. We are 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,” says Phua Tian Beng, chief executive officer of the three-decade old institution. “Patients will be able to get uninterrupted sleep and can recover better; nurses are also able to focus on other areas of patient care,” he adds. The multi-organ transplant specialty hospital is setting a new standard of patient care in the region with the aid of cutting-edge technology and innovative health solutions. One of its most recent initiatives, amongst others, is the Knowledge Based Medication Administration system, which was implemented just last year. Under this initiative, nurses can 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, thus eliminating the risk of potentially life-threatening errors in dispensing medicines. Mount Elizabeth Hospital, colloquially called MountE, 16
In recent years, we are seeing a greater demand for single bed rooms, due to more patients placing more importance on comfort and privacy.
is one of Singapore’s most established and most famous private hospitals. It has been catering to both local and foreign patients for over 30 years, and it carries the distinction of being the first private hospital in Singapore to perform open heart surgery and establish a nuclear medicine centre. Now, faced with the challenges brought about by a rapidly increasing patient volume, the hospital is finding creative new ways to cope with the influx. One of the hospital’s most innovative ideas is the concept of a flexi-room. “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,” explains Phua. “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,” he says. Apart from transforming its rooms, the hospital has also managed to dramatically speed up its admissions process. The hospital launched a digital bed management system to speed up the admissions process in June 2015. Previously, the only way the admissions office would
feature featureprofile profile Remote monitoring via devices that send results to the doctor’s office, for example, can largely alleviate the strain on our healthcare system.
Phua Tien Beng, CEO, Mount Elizabeth Hospital
know if there are available beds is for them to call the ward and have the nurses walk through to check. Under the new system, the status of all beds in the wards, whether they are occupied, available, or in the process of being cleaned, can be tracked in real time. As a result, admissions waiting time has been reduced by 26%, which is about 40 minutes. Mount Elizabeth Hospital was also the first private healthcare player in Singapore to embark on Electronic Medical Records in 2011. Now, Phua says that this initiative will be expanded to allow doctors and nurses to monitor, connect, and make clinical decisions using their mobile devices on the go. The shortage of space is a prime consideration for Mount Elizabeth Hospital. The institution is nestled near the bustling Orchard Road and is surrounded on all sides by prime shopping centres and luxury hotels and shopping centres. “This means that there is limited physical room for the hospital to grow and expand,” Phua notes. The hospital has come with a variety of solutions for this dilemma. “We have also recently expanded beyond the hospital’s physical boundaries by moving our outpatient Mount Elizabeth Rehabilitation Centre to neighbouring Paragon Medical Centre,” Phua says, adding that with an area of more than 3,100 square feet, Paragon is the largest and most comprehensive private rehabilitation center in the country. Another way to combat the space shortage is by building up the hospital’s 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,” Phua says. “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 launched Health Plus – a health and wellness web resource with up-to-date healthcare information backed by accredited specialists. The hospital is also riding on the popularity and convenience of WhatsApp; the public can now touch base and even make medical appointments via this platform from anywhere in the world. Patient-centred operations Leveraging on technological innovations is just one of three main areas of focus for Phua. The CEO is also determined to make the hospital more patient-centric by making it as convenient and seamless as possible for patients. He is also committed to attracting the best medical talents and providing cutting-edge treatments. “Our key value proposition is that we are able to provide a comprehensive list of treatment options that are tailored to each patient. 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,” Phua says. “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. Note: At the time of interview, Phua Tien Beng was the CEO of Mount Elizabeth Hospital--a hospital under Parkway Pantai. He has since been appointed Acting CEO of Parkway Pantai’s Singapore Operations Division.
Single-bedded rooms at Mount E
cOUNTRY report: Thailand
Will Bumrungrad International be open to healthcare reform?
Thailand is pressed to revamp healthcare The government is aware of the financial cracks on its highly praised universal healthcare coverage, but analysts expect reforms to come out in a trickle whilst the country remains in a delicate political climate.
hen one of roughly 50 million Thai citizens covered by the Universal Coverage Scheme (UCS) steps into a district hospital to receive medical consultation or treatment, the experience is pleasant and affordable due to the generous free coverage on curative and rehabilitation services. But for how long this can be sustained is becoming increasingly in question as Thailand hurtles towards an ageing population and soaring healthcare costs. One of the most pressing policy challenges for the Thai healthcare system is identifying new sources of funding and reducing nonessential outpatient elements within the benefit package, whilst still safeguarding admission services and continuity of treatment for chronic conditions, says Viroj Tangcharoensathien, senior advisor, international health policy program, ministry of public health in Thailand and the secretary general of the International Health Policy Program Foundation. He warns that the healthcare system is over reliant on general taxation as the main source of funding for the Civil Servant Medical Benefit Scheme (CSMBS). This puts the national healthcare insurance scheme at risk of incurring shortfalls, especially during cyclical economic downturns and structural adjustments. Allianz Worldwide Care estimates that UCS covers roughly 50 million people or 76% of Thailand’s population, CSMBS at 7%, and the Worker Compensation Scheme and the 18
The healthcare system is over reliant on general taxation to finance healthcare as the main source of funding.
Social Security Scheme (SSS) covering 15%, with domestic private insurance schemes available for employees of large companies. Schemes funded through general taxation will be at the top of the government reform list, says Wei Zheng Ang, pharmaceuticals & healthcare analyst at BMI Research, but changes will likely be introduced gradually due to the complex web of diverse stakeholder interests. Doctors in the country have been calling for a co-payment scheme to the UCS, but Wei reckons such a measure would remain in limbo due to concerns that it will make it harder for lower-income patients to avail healthcare services. Despite declining inequality in the past decades, there were 7.1 million impoverished people in Thailand and an additional 6.7 million living within 20% above the national poverty line, according to the World Bank. Raising low reimbursements Bolstering support for private hospitals is one key improvement that could be expected. The low rate of reimbursements punished several private hospitals last year, prompting the Social Security Office (SSO) to promise an increased budget moving forward. Analysts expect the SSO to raise the reimbursement rates for the SSS. “There were a number of private hospitals, unable to cope with the cost of medical services under the SSS, that have exited the social security system in FY16 — implying unrealistic reimbursement rates for the SSS,”
cOUNTRY report: Thailand says Apichaya Ketruttanaborvorn, analyst at DBS. “We assign a high probability that the SSO will increase its reimbursement rates for its member hospitals in FY17F.” The SSO will likely push through with the reimbursement increase based on historical trends. The SSO adjusts its reimbursement rates every two years, and the current rate was revised in 2014. Ketruttanaborvorn estimates the rate of increase will likely be the same quantum as the healthcare inflation rate, or in the range of 4-5%. “The SSS reimbursement rate normally tracks the inflation and the growing size of the fund under the SSS,” she explains. “This should alleviate concerns over the decreasing number of member hospitals which might not be able to meet the growing healthcare demand under the SSS.” Should the reimbursement increase push through, hospitals with a sizeable revenue exposure to the SSS will be the big winners. This includes Chularat Hospital, a private healthcare provider covering the eastern part of Bangkok and nearby provinces, which has a large SSS exposure of 45% and has more than 145,000 registered SSS patients in FY17F. It will also benefit Ladprao General Hospital, a private healthcare provider targeting midincome patients in Bangkok, which has 171,000 registered SSS patients. Another winner could be the Bangkok Chain Hospital, a hospital chain operator that focuses on middleincome patients and also runs one premium hospital, which had 762,000 registered SSS patients as of the third quarter of last year.
Wei Zheng Ang
Funding elderly care Healthcare demand will skyrocket as Thailand hurtles towards a rapidly ageing population. The World Bank estimates that 11% of the country’s population, or around 7.5 million people, are 65 years or older, more than doubling from the 5% in 1995. Dr Zhanming Liang, senior lecturer at La Trobe University, and Dr Phudit Tejativaddhana, professor at Naresuan University, have published a study warning about the financial pressures an increasingly elderly population in Thailand would bring to the healthcare system. Currently, the old age dependency rate — or the number of people aged 65 and above per 100 population aged 15 to 64 — is at a relatively low 13%, but it is predicted to quadruple to 53.1% in 2050. Government share of total healthcare expenditure
Significant injection into healthcare expenditure to meet the increasing demand alone is not a feasible solution in Thailand.
With more elderly citizens, many of whom will require treatment and care for chronic diseases, Thailand’s universal health coverage will come under pressure. Providing these costly healthcare services for free as the country’s tax base thins will likely put a lot of strain on the public coffers. “Achieving universal health insurance has certainly made Thailand proud. However, the complex three-tier health insurance arrangements together with the increasing healthcare needs threaten its sustainability,” they say, expecting a spike in healthcare service demand but also a decrease in tax contributions from retirees. Factoring in the more than 60% of the population working in the informal sector, a segment that may not be subject to tax contributions, it becomes clear that the government must pursue a more sustainable solution than simply hiking up taxes, say Liang and Tejativaddhana. The forecasted jump in elderly population and large swathes of informal workers “make significant increases of tax revenue by the Thai Government impossible in the long run, at least not at a rate that can match the increasing healthcare demands,” they say. “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.” Thai health and social welfare systems need to start preparing long-term care policies, reckons Tangcharoensathien. “This will require adapting sources of finance and modalities of care, and developing more effective interface mechanisms between families and community care organisations, and between health and other social services,” he says. Addressing healthcare gap Increasing funding for Thailand’s healthcare system should also help address the troubling healthcare gap between Bangkok and Tier 2 cities — namely Chiang Mai, Khon Kaen, Surat Thani, Ubon Ratchathani, Nakhon Ratchasima, Chonburi, and Songkhla. Tier 2 cities face an alarming shortage of medical specialists such as physicians, surgeons, and anesthesiologists, reckons Sittichai Duangrattanachaya, healthcare analyst at Maybank Kim Eng Thailand. In 2014, Bangkok had an estimated one doctor per 1,075 people and one nurse per 285 — 59% and 49% better, respectively, than in Tier 2 cities. Moreover, Bangkok had 3.7 beds per 1,000 people, 54% better than in Tier 2 cities. “Considering population structure and medical school attendants, shortage in the number of physicians will surge due to ageing population,” says Mickaeil Feige, associate partner at Solidiance. “The universal healthcare scheme, expansion of private hospitals, rising number of chronic disease patients along with rising expectations to receive treatments from specialists are all aggravating the specialist shortage situations.” He expects rapid urbanisation in Tier 2 cities and border provinces to boost incomes and drive up demand for better healthcare services, on the back of regional economic integration under the ASEAN Economic Community. But by 2019, there will be a specialist shortage of roughly 4,000 physicians, 1,800 surgeons, and 1,300 anesthesiologists. HEALTHCARE ASIA
ANALYSIS: QUALITY HEALTHCARE
Will Singapore be able to give both privileges to its patients?
Singapore juggles quality healthcare, affordable costs
Key issues facing Singapore’s private healthcare sector include increased regulations to prevent excessive medical bills.
hese could lead to increased regulations and lower demand for private healthcare services. Bearing in mind the risks, we remain optimistic on the industry, as the positive structural trends are intact and most players are already moving abroad to tap better growth opportunities. To prevent excessive medical bills and maintain the high ethical standards in the private healthcare sector, The Singapore Medical Council (SMC) — a governing body under the Singapore Ministry of Health — has implemented various measures. Two key measures with notable implications include the new regulation banning doctors from paying a variable fee to third-party administrators (TPA), and the prohibition of profit guarantees for M&A deals. The new regulation from the SMC banning doctors from paying fees to third-party administrators — calculated as a percentage of fees the doctors charge their patients — could benefit the group practice model, at the expense of smaller practices and young doctors. Expected to start from July 2017, the rule could restrict 20
Most of the large healthcare groups have their own corporate schemes and rely very little on third-party administrators.
young doctors’ ability to gain access to patients, thus, making it more difficult for them to build up their patient pools. Increased regulations TPAs in the past have been able to provide young doctors with good access to patients, and doctors were able to join TPA panel groups for a fee. With increased regulation on the fee structure, TPAs that do not hire their own doctors might see their earnings decline. In addition, new doctors would find it harder to build their patient base. On their own, most young doctors will lack the networking skills and scale to deal directly with medical insurance groups. The ban on paying a percentage fee to TPAs issue started when several unhappy doctors highlighted that fees to TPAs could be excessive and go up to c.30% of medical bills, which has inflated medical costs and eroded doctors’ profit margins. Several TPAs charge doctors based on a percentage of medical fees, for referring patients and placing doctors on their insurance panel group. SMC issued a new regulation banning
doctors to pay a percentage of medical fees to TPAs and required that fees payable to TPAs to be justifiable by the amount of work done. TPAs mainly process claims and undertake administrative functions. Most of the large healthcare groups have their own corporate schemes and rely very little on TPAs. Smaller practices and young startup doctors who rely more on TPAs for referrals and to stay on insurance panels could be impacted. On the other hand, the prohibition of profit guarantee for future M&As could impact healthcare players which have been relying on acquisition strategy to expand, including SMG and Q&M. However, we note that the acquisition strategy could still continue in the absence of profit guarantee. Other safeguards for acquisition include issuing more shares as acquisition proceeds to ensure alignment of interest, setting financial KPIs to be met after acquisition and incentivising doctors via bonuses, as well as recruiting senior specialists under normal employment contract. Since 2016, the demand from medical tourists has declined, largely attributable to the strong SGD and the weaker global economy. The weakness is reflected in the revenue of large healthcare players that rely on organic growth, such as Raffles Medical and IHH. In addition, rising healthcare quality in the neighbouring countries could also create more competition for the patient pool. With its high cost structure, there is very limited room for Singapore’s hospitals to compete on prices. As such, its private hospitals should continue to target premium, price-inelastic customers. Private hospitals cater to most of the foreign patients in Singapore and 20% of the local market, owing to heavy government subsidies for citizens in public hospitals. Spending by medical tourists in Singapore grew at a 24-year CAGR of 11% over the 1990-2014 period. From Singapore Healthcare Healthy Trends by Maybank Kim Eng
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HEALTHCARE ASIA FORUM: Kuala lumpur
Will the silver population outrun the industry?
Malaysia’s budding elderly care plays catch up with the ageing population Senior living remains a relatively new concept to Malaysia, with nursing homes run mostly by charitable organisations providing final stages of care to the elderlies.
lobal healthcare expenditure has consistently risen but incomes haven’t kept pace, and Malaysia is certainly having difficulties keeping up. Natasha Gulati, industry manager at Frost & Sullivan, said that private healthcare expenditure has grown at par with total expenditure. This she revealed in the Healthcare Asia Forum 2017’s Kuala Lumpur leg held at the Impiana KLCC Hotel on 17 May which was attended by over 80 key healthcare industry personalities. Fabian Boegershausen, country manager at Solidiance, enumerated some of the high level observations on healthcare in Malaysia. In the regional context, Malaysia is above the emerging markets in per capita spending for healthcare but still far below a benchmark country like Singapore. An ageing population and ongoing urbanisation impacts
Overall healthcare spending has consistently outgrown key indicators in Malaysia by almost twice the growth factor.
the overall need for healthcare, the mix of healthcare requirements, and the population’s ability to finance its healthcare needs. The economy has performed sluggishly in the past years, hampered by low oil prices and lower FDI investments, better than the Middle East but behind emerging markets. Overall healthcare spending has consistently outgrown key indicators in Malaysia by almost twice the growth factor, following the global and regional trend. Public healthcare budgets remained stable and recently picked up again but are expected to grow only slowly in the midterm future as government income is constrained. Private spending is expected to keep outgrowing public spending, making up for the lack in public coverage — which is technically universal but full of gaps and bottlenecks. The supply of private
healthcare facilities is ill-balanced. Since 2014, private facilities have tended to reduce capacity and may pick up only slowly. The coverage by private insurance is still very low, people focus more on general savings and life insurances. No easy-to-use, micro-level models yet. Malaysia has a healthcare spending per capita at US$455, which is one of the highest in ASEAN where the government plays an active role. Vietnam is also showing a promising start with 7% of GDP spent on healthcare. Indonesia ranks low for healthcare per capita among ASEAN neighbours but is picking up with the growth of the middle class and increased government spending. Healthcare expenditure is similar to that of Malaysia but with a much larger population, the healthcare spending per capita is half of Malaysia’s healthcare spending
HEALTHCARE ASIA FORUM: Kuala lumpur A growing senior population will most certainly drive up demand for healthcare.
Attendees at the forum
per capita. Almost 70% of the approximately 50,000 healthcare staff in Malaysia are serving in public hospitals but the Ministry of Health still recorded a shortage in healthcare staff at public hospitals. Public hospitals hold 75% share of the total number of hospital beds in the country, but trends show that private hospitals are gaining more share during the past decade. Malaysia has one doctor for every 633 people and one nurse per 333 people. In the past decade, the number of doctors in the public and private sectors increased by around 50% and 20%, respectively. In terms of the number of nurses, there was an increase of about 40% in public sector nurses, and more than 50% increase in private sector nurses during the past decade. The middle class households in Malaysia have the highest average income in Southeast Asia, apart from Singapore. Suresh Ponnudurai, CEO of Malaysiahealthcare.com and World of Wellness, wondered what strategies are being rolled out by healthcare firms and hospitals to keep luring medical tourists in, and what trends are currently in play and what challenges are players likely to encounter due to these trends. Medical tourism is a US$55 billion industry that has opened up the doors to quality treatment for people everywhere. This industry has expanded by leaps and bounds whilst constantly evolving to surpass previously set standards. Senior living remains a relatively new concept to Malaysia, said Boegershausen. Presently, nursing home is the place that focusses
on the final stages of care and majority are run by charitable organisations. The population who are 65 and above remain below 10% of the total population of Malaysia. A recent study shows that approximately 70,000 active 54-year old EPF contributors have an average savings of just below RM167,000 (US$38,973) in 2013. As the average Malaysian is expected to live until 75, this means that for one to retire at 55 the average monthly expenses can only be at around RM700 (US$163.36) Ageing population challenges A growing senior population will most certainly drive up demand for healthcare, in particular long-term care as well as non-communicable diseases. The top 3 mortality cause has been consistently causing two-thirds of the deaths in private hospitals. Diseases of the circulatory system has been consistently high at 28% for the past three years as the cause of death in private hospitals. Total healthcare expenditure is forecasted to grow at around 6% CAGR minimum, mainly driven by private healthcare — due to stable growth of GNI per capita and health insurance penetration. Percentage share of private sector in healthcare expenditure is forecasted to increase from 48% in 2015 to 55% in 2020. To achieve 11MP, private hospital beds must grow at 5% CAGR to provide 24% of the target capacity, and private hospitals beds must grow at 2% CAGR to 65%. Remaining 10% will be catered by homes and medical
centres. Ponnudurai added that the ageing population of Malaysia and in ASEAN is rising sharply as quality of life improves significantly. By 2035, Malaysia is expected to have reached the status of an ageing nation with 15% of the population above the age of 60. This is projected to reach 20.4% by 2050. This looming problem is a global issue for most nations including Malaysia coupled with significant shortages in aged care. The ageing population requires more in terms of healthcare services with nations that have homes to cater for aged care living. Healthcare providers and stakeholders must look to eliminate waste and explore alternative care delivery models like retail clinics, telehealth, and medical tourism for “everywhere care”. These firms are using mergers and acquisitions as well as alliances to consolidate into large health system for economies of scale and to reach more patients. Priorities must be delivering care through mHealth, telehealth, and EMR/PHR, as well as incorporating wearables and social media into their care plans to deliver value in a competitive environment. Additionally, they must address the cost curve and managing health populations with public and private sectors transitioning to financial incentives from the “breakfix” model, to prevention and predictive maintenance. Ganesan Satimuti, head of biomedical engineering in Parkway Pantai, Malaysian Operation Division, said that adoption of technology in the healthcare sector of any country is critical in enhancing delivery of quality healthcare services. Malaysia practices a dual healthcare delivery system. Both the public and private sectors are central players in Malaysia’s healthcare delivery system. Datuk Dr Kuljit Singh, medical director, Prince Court Medical Centre in Kuala Lumpur, Malaysia, enumerated some of the challenges in converting into digital technology in Malaysian healthcare. He cited that the industry must tackle traditional thinking among hospital players, elevated costs, more training, partial digital conversion, the system’s 100% dependency, and confidentiality. HEALTHCARE ASIA
HEALTHCARE ASIA LEADERS ROUNDTABLE: Bangkok
Leaders roundtable in Bangkok, Thailand
Thailand struggles to strike a balance between high cost, quality healthcare Thailand may easily be deemed as the healthcare winner in the ASEAN region if doctor salaries, patient coverage, and medical tourism lead are anything to go by.
hailand may be a healthcare paradise, but what could be the biggest crack in the country’s laudable healthcare system? This was fleshed out by attendees at the Healthcare Asia Leaders Roundtable 2017 held last March 14 at the Conrad Bangkok. In the Philippines, one of the biggest healthcare problems is that doctors leave after they train. Doctors in the Philippines are paid roughly THB40,000 (US$1,186) and they leave because of unenticing job offers. What are some of the problems in the Thai industry in terms of costs, staffing, and funding of hospitals? Dr Surangkana Techapaitoon, hospital director at Samitivej Children Hospital, said that with regard to striking a balance between soaring costs and high quality healthcare, Thailand’s main challenge is keeping up with the new healthcare 24
Patients are constantly hoping that the care they receive from hospitals are high-tech in nature.
technologies. “Patients are constantly hoping that the care they receive from hospitals are high-tech in nature, they want to experience using new hospital innovation, but they also do not want to pay extra charges entailed by this innovative service,” she added.“This is where the problem starts, both private and public hospitals cannot shell out the money needed to upgrade their treatment technology without patients that are willing to spend the equivalent baht. We would like to spend more because this is also to help our patients, especially in our case as we are a children’s hospital.” Dr Techapaitoon added that the industry must address issues on how to balance the cost, the patients’ needs, and business strategies to benefit all parties involved. “We should zero in on how to utilise current and upcoming technologies without passing on too much costs to patients,
how to effectively implement this, what strategies must be in place to lessen the costs but maintain the high quality of treatment.” She added that for a doctor fresh out of medical school, the average salary would be around THB30,000 (US$889) per month for general practitioners in government hospitals. For specialists, it would be around THB40,000 (US$1,186)50,000 (US$1,482) per month. But if general practitioners work in a private hospital, it would be around THB100,000 (US$2,965) and for specialists, estimate would be around THB200,000 (US$5,931). This, she said, may be a strong reason why unlike the Philippines, Thai doctors choose to stay where they are and don’t opt to leave. In some of the other countries, particularly in Malaysia, there is a surge in demand for IT to support the infrastructure
HEALTHCARE ASIA LEADERS ROUNDTABLE: Bangkok As a private hospital, we should be price competitive— prices should not be high, but not too low.
Where to get the budget for innovation
of the hospital with regards to technology. The question is where do we get the budget for these innovations? This is a big tradeoff that a number of hospitals in the region are trying to make, and chief financial officers are saying that there is no clear return on investment on many of the hospital equipment that they are going to buy. Is the Thailand healthcare industry experiencing a similar dilemma? Gavin Wadell, international head marketing executive of the business development department of Phyathai International Hospital, explained that from the private hospitals’ point of view, “We spend a lot of money in buying the latest technology to provide what we can for the patients. I’m not qualified to comment on behalf of the sector, but talking about the equipment that hospitals buy, I think investing on these kinds of technology still puts the hospital in a good position despite shelling out cash.” High quality, high spend Joni Java, international marketing executive at Vejthani Hospital, agreed and added that for a high quality of healthcare to be given, high technology is necessary. “But for the economic aspect, we cannot really decrease our prices so much. As a private hospital, we should be price competitive--prices should not be high, but not too low,” she said. Dr Techapaitoon also commented that private-public partnership may be a key in improving the quality of healthcare and maintaining the affordable costs at the same time.
As for the government’s healthcare funding system in Thailand, there is a new policy that private hospitals must take care of emergency cases. “Before, it was optional. But after the policy was passed in the parliament, there is now this rule that private hospitals should take care of emergency cases before the patient can transfer to public facilities. My concern on this is that the government should take part in this ‘investment’ on patients, there should be more trainings for public hospital players, and more partnerships so we can increase both the private and public sectors’ abilities to take care of the patients,” Dr Techapattoon added. Is it too soon to say that private hospitals will be inundated with emergency patients that the government is paying for? Is this actually economic for the hospitals or is this something that will be cost-straining? Wadell answered that private hospitals openly accept social security patients, or those whose payments will be from their social security accounts. “We are assisted by the government, and we are grateful for that,” he said. Kessara Jaitang, international marketing head nurse at Phyathai International Hospital, added that in her hospital, there is a separate admission room for the private patient and the public patient. “This is so that patients who want and can pay for better services can actually obtain what they have worked so hard for. Social security in Thailand works very well, and covers those who have utilised this.” Wadell added as an example, “My friend who used
to work as a co-teacher in a university was covered by his social security. Unfortunately, he passed away in our hospital—he’s been there for three or four months. His hospital bill was then THB1.5m (US$44,484), and the social security covered 99% of that. I think the social security is doing a really good job for the people in Thailand.” Dr Techapaitoon explained that in Thailand, there are three kinds of healthcare coverage: social security, universal coverage, and civil coverage for government workers. Everyone can obtain any of these coverages, but there are certain hospitals that the government does not allow to recognise these privileges. “In the future, I think that we will not be able to charge as much as we would like. This is why I have been emphasising from the start that both private and public players must follow the appropriate processes so everyone gets fair coverage and treatment.” Some areas in the region, particularly Philippine provinces, are crying out for doctors and nurses to come back, work there, live there, and serve the government hospitals. Regional hospitals are now trying to convince them to stay in the provinces. Is Thailand experiencing the same issue? Java, coming from the Philippines, explained that the cost of living in Thailand as compared to the former is a lot lower which makes all the difference between Thai doctors who choose to stay and Filipino ones who choose to go. Where is Thailand headed now in medical tourism—is it still number one or is it under threat? Wadell described the current status as “rising” as more health travelers can easily come here. “I still feel that Thailand is number one in the area. As soon as I mention Singapore to foreign patients, it’s the same response all the time: ‘It’s so expensive!’ When they come here in Thailand for medical treatment, they can also experience the tourist spots.” However, Java added that Middle East patients have decreased, which could be due to the oil price change, and in Vejthani Hospital, the change was really felt. “Consequently, some of the coverages were also decreased. So instead of 100% coverage, it has been dowsized to just 60% or 40%.” HEALTHCARE ASIA
HEALTHCARE ASIA FORUM: SINGAPORE
For ageing in place to be effective, caring must be preventive or supportive
Singapore is turning to artificial intelligence for elderly care Robotics, artificial intelligence, and chatbots are being used by nursing homes and care facilities so families and caregivers can engage remotely with patients.
emand for quality private healthcare and private healthcare expenditure are expected to continue rising due to various structural factors: ageing population, higher prevalence of chronic diseases, rising affluence, and other factors including population growth and healthcare inflation. Private health expenditure per capita grew 3-14% YoY in the past five years, with growth in 2015 at 3%. According to John Cheong, analyst with Maybank Kim Eng, the government has boosted spending significantly to cater to the rising demand. On the other hand, private health expenditure continued to increase. Raffles Medical is the main beneficiary of these positive trends given its leading position in Singapore and integrated business model. Singapore’s aged population has increased at a faster pace than the rest.
Private health expenditure per capita grew 3-14% YoY in the past five years, with growth in 2015 at 3%.
Singapore Population White Paper estimated that by 2030, the number of citizens aged 65 and above will double to 900,000 and they will make up one in four of total citizens, from one in eight in 2015. Moreover, those aged above 65 have at least 19% chance of being admitted, whilst those below 60 have less than 11% chance of being admitted. Silver society In addition to the ageing society, prevalence of chronic diseases such as cancer, heart attack, and obesity has increased over the years. The reasons for the increase were longer lifespan and lifestyle changes including diet and exercise habits. This could lead to increase in demand for more complex specialist treatments such as oncology and cardiac treatment. Speaking at the Healthcare Asia Forum held in 27 April at the Westin
Singapore, Dr Tan Jit Seng, director, Lotus Eldercare Health Services, said for an effective “ageing in place,” a NEEDS model which should either be preventive or supportive must be in place for an effective “ageing in place.” “For it to be preventive, there must be teleremote vitals monitoring, telepresence for isolation and loneliness, and verbal controls of appliances like lighting, TV, and aircon, among other things. On the ‘supportive’ aspect, there must be quick access to information for problem solving, teleconsultation, and day to day assessment and monitoring for deterioration and identifying reversible issues. What are the benefits of technology use in elder care? It reduces the reliance of trained healthcare manpower by empowering the patients and their family on the care supported by timely input of
HEALTHCARE ASIA FORUM: Singapore Easier and more convenient access to affordable public healthcare facilities could impact demand for private healthcare.
Reducing personal spend on healthcare
information to patients and their families or continual monitoring of chronic disease and early warning of flares or decompensation,” he said. Reducing personal and government spending on healthcare by improving compliance in leading a healthier lifestyle with input of vital data and treating diseases or deterioration earlier including delaying onset of dementia by five years would both decrease the number of cases by a third and alleviate economic costs by 36%, or over £21b, by 2050. Dr Tan was joined by Dr Timothy Low, CEO of Farrer Park Hospital, in the forum as a speaker. Robots for elderly care Dr Tan shared that some elderly care facilities use Ohmni — robots used to augment aged care. Families/ Caregivers can engage remotely over the Internet and cook, eat, and walk together to mimic physical presence. They can check on the elders’ safety for peace of mind and make sure they follow their diet or medication. Geriatric specialists, nurses, and doctors can dial-in ondemand simultaneously to provide services. Another robot being used in the elderly care industry is ExoAtlet which uses robotics for exoskeletal support. Its advantages include fall prevention, doing away with stigma as opposed to using a wheelchair, clients are better able to manoeuvre in any terrain, and there is more possibility of quicker rehab especially for frail elderly clients post-hospitalisation. Another illustration for robotics use is Loomo.
Its main uses include telepresence, infotainment, daily routine support, and cognition/mood/routine monitoring. With robotics and artificial intelligence, individual clinics, hospital departments, nursing home, and care facilities, among others, can seamlessly list their services and other important information in their chatbot avatars. Each chatbot can later be used for integration of personalised companion robots and be given protocols to enhance the lifestyle of the individual whilst seamlessly monitoring their health status. Chatbots for health advisory are already available to those savvy in chatbots, but in the future, the healthcare industry will be empowered to use these tools as the next form of automation and communication. Singapore’s sheen On medical tourism, the country is showing signs of recovery after a flattish year in 2016, as most overseas patients are still adjusting from the strong SGD and softer economy. Maybank’s Cheong said in a report that IHH, the largest hospital group with four hospitals in Singapore, saw a 12% increase in Indonesian patients. Also, visitor arrivals in Singapore resumed growth in 2016, after the unexciting 2015 and 2016. In addition, most currencies have stabilised against the SGD except for the MYR. The spending in the public sector is expected to continue to grow to ensure affordable healthcare
services for ageing citizens and ease congestions in the public hospitals. “Easier and more convenient access to affordable public healthcare facilities could impact demand for private healthcare. The government targets to increase healthcare spending by 10%, according to its 2017 budget. Despite the improvement in the public healthcare system, the structural trend of rising affluence could continue to improve demand for better quality private healthcare. Also, we note that the market share of public hospitals has been stable, at around the 85% level since 2010 and both public and private hospitals grew at a historical six-year CAGR of around 3%,” Cheong explained. Thai Wei Ying, analyst with UOB KayHian, also noted that whilst Singapore still remains a compelling medical tourist destination in terms of service quality and clinical outcomes, we believe foreign patient growth may decelerate gradually as competitive pressures from neighbouring ASEAN countries grow. “For instance, IHH has seen a shift in patient mix over the past years. In 2013, local-foreign patient mix stood at 60:40 but has since shifted to 70:30. Separately, we observed RMG has seen a slowdown in medical tourism in the past years, with the group estimated to record a low single-digit drop (in %) in foreign patient inflow in its latest 1Q17 results. Going forward, we expect patient growth to stem largely from local patients, underpinned by favourable demographic trends such as ageing demographics as well as rising income levels,” he said. Moreover, he expects spillover effects from public hospitals, taking into consideration that bed occupancy rate in public hospitals still remained very elevated (82-97% based on latest data versus 60-70% at private hospitals), even exceeding the standard levels (82-85%) by Australian Medical Association and Australasian College of Emergency Medicine. Given that the number of lower margin local patient growth is expected to outpace that of highermargin international patients, he expects revenue intensity growth to soften in Singapore. HEALTHCARE ASIA
ANALYSIS: DIGITAL HEALTH the bottom line. The benefits of digital healthcare can be felt beyond patients. By assisting the prevention of illness and supporting the provision of care through alternative locations such as clinics, fewer new doctors and nurses will need to be trained and less additional beds and hospitals would need to be created, which can help to reduce the overall financial healthcare burden on governments in emerging markets — enabling them to fund other key areas of the economy. A whole nation, therefore, benefits from digital healthcare. Effective integration of digital solutions
How healthcare firms can monetise digital health
It is time that hospitals realise that apart from monetary gains, digital health solutions produce better clinical outcomes and better patient relationship.
igital healthcare solutions can help address the gaps in healthcare systems across the growth markets. However, despite its promising benefits, digital adoption by healthcare players has lagged, particularly due to the difficulty in extracting value from health investments. The healthcare system in the emerging markets is characterised by an underdeveloped infrastructure, fiscal constraints, and a chronic shortage of equipment and medical professionals. Emerging markets in Asia in particular find it increasingly challenging to meet their citizens’ escalating health needs. For instance, according to World Health Organisation data, Southeast Asia has fewer physicians on average, at 0.6 for every 1,000 people, compared to developed economies such as Germany, which has 3.7. The ratio drops further when zeroing in on developing countries such as Indonesia (0.4). Indonesia is looking to expand its national insurance programme to all its citizens by 2019, and it has also increased its national budget allocation to healthcare. However, considering the gap and
Digitalisation of health services can help to improve the quality of and access to care whilst reducing costs.
what is needed to bridge it, the traditional model for growth would not be sustainable. To ensure the long-term sustainability of its national healthcare programme, emerging markets like Indonesia need to look at innovative technology and disruptive business models. Digitalisation of health services can help to improve the quality of and access to care whilst reducing costs. Benefits of digital healthcare Digital healthcare is not about the technologies, it’s about new ways of solving healthcare problems — creating unique experiences for patients, and accelerating the growth of healthcare providers. The potential benefits of digital healthcare solutions for emerging markets to address business challenges caused by the current systems and processes associated with paper medical records are substantial. Over the longer term, digital healthcare will help systemwide operations and organisations to deliver more powerful healthcare. Digital health can dramatically improve an organisation’s productivity and, in turn, provide benefits in both patient outcomes and
Defining and measuring ROI Despite its promising benefits, digital adoption by healthcare players has lagged behind, particularly due to the difficulty in demonstrating value in terms of investment, and the varying perspectives between stakeholders on what defines a return from the investment. However, because of the astounding speed at which digital transformation is taking place across industries, with new entrants disrupting the healthcare industry and patients fast becoming empowered consumers — healthcare stakeholders will have to rapidly go digital or risk falling behind the curve. Positive ROI from digital health investments can be realised with a well-thought out approach, and a true return from a digital health investment must be holistic and address both quantitative and qualitative improvements in outcomes. It will be crucial for organisations to define what value means for them, prioritise what returns are important, and establish both quantitative and qualitative metrics to measure these returns These definitions are bound to vary between public and private healthcare institutions and it must also be noted that often a simple technological and digital solution may turn out to have the greatest impact. From “Digital Health — Benefits and value for the growth markets” by PwC’s Dr Zubin J Daruwalla and Aastha Gulati
In collaboration with:
Dr. Rasu Shrestha, Chief Innovation Officer, University of Pittsburgh Medical Center; Executive Vice President, UPMC Enterprises, University of Pittsburgh Medical Center, USA
Humanizing Healthcare with Artificial Technology
Sanjay Aurora, Managing Director, Darktrace, Asia Pacific, Singapore
The New Era of Cyber Threats: The Shift to Self-Learning and SelfDefending Networks
Dr. Dominic King, Clinical Lead, Google DeepMind Health, United Kingdom
Revolutionizing Healthcare with Clinician-Led Technology
Dr. Michael Pfeffer, Chief Information Officer, UCLA Health Sciences; Assistant Clinical Professor of Medicine and Associate Program Director, Internal Medicine Residency Program, David Geffen School of Medicine, UCLA, USA
Improving Team-Based, Collaborative Care and Physician Efficiency Through EHR Optimization Strategy
DAY 2 KEYNOTE SPEAKERS:
Bruce Liang, CEO, Integrated Health Information Systems; CIO, Ministry of Health, Singapore
Digital Disruption in Healthcare
DAY 1 KEYNOTE SPEAKERS:
IHE World Summit The IHE World Summit will be held as a pre-conference event at HIMSS AsiaPac17, 11 Sept 2017, Singapore. IHE brings together healthcare IT system users and developers to address interoperability issues that impact clinical care.
Smart Nursing Competency Workshop In partnership with the Singapore Nurses Association – Nursing Informatics Chapter, HIMSS Asia Pacific will be delivering a Smart Nursing Competency Program for this first time in Singapore. In this workshop, we will bring together nursing C-suites and managers, nurse educators, clinical nurses and nursing informatics professionals to prepare and equip our nursing workforce with skills to improve nursing workflows, digital fluency and provide care in the best interests of their patients.
• Data Management • Data Analytics • Data Reporting
AHIMA AHI MA Hea Health Data Health Analytics Workshop A nallyti tics W or This two-day interactive workshop is a critical step toward attaining the internationally recognized AHIMA Certified Health Data Analyst (CHDA®) credential and to becoming a data analyst expert. The domains covered in the workshop and the CDHA exam are:
POST-CONFERENCE DAY: 14 SEPTEMBER
ADDITIONAL EXCLUSIVE WORKSHOPS:
HIMSS-Elsevier Digital Healthcare Award Sponsor:
HIMSS-CHIME International Cybersecurity Essentials for Healthcare Executives A top priority for every healthcare IT executive is protecting their organization from cybersecurity threats and reaches. In this executive level program, industry experts will present key components of an effective cybersecurity strategy and approaches any organization can take to gain employee support and engagement.
At HIMSS AsiaPac17 in Singapore, expect to learn, share and discuss insights on team-based care that will benefit your patients, care team and organization both clinically and operationally.
Coupling team-based care with information technology and advanced analytics maturity, the needs of our patient population throughout the continuum of care can then be sustainably enhanced.
Team-based care is the antidote to fragmented health care. It brings multidisciplinary healthcare providers together, working collaboratively alongside patients and caregivers to achieve optimal outcomes and care experiences.
11 – 14 September 2017 | Marina Bay Sands, Singapore
MAIN CONFERENCE AND EXHIBITION: 12 - 13 SEPTEMBER
PRE-CONFERENCE DAY: 11 SEPTEMBER
ANALYSIS: VENTURE CAPITAL FUNDING Q1 2017. There were 49 M&A transactions (seven disclosed) in the Healthcare IT sector in Q1 2017 compared to 42 transactions (11 disclosed) in Q4 2016.
VC funding is finally back from the doldrums
Venture capital funding in healthcare keeps rocketing VC funding has officially bounced back after a depressing season two years ago, but digital health public firms still continue to struggle.
enture capital (VC) funding, including private equity and corporate venture capital, in the Health IT sector almost doubled quarter-over-quarter (QoQ), coming in at $1.6 billion in 165 deals compared to $845 million in 159 deals in Q4 2016. VC funding in Q1 2017 was also up compared to Q1 2016 when nearly $1.4 billion was raised in 146 deals. The Digital Health sector has now received $20 billion in VC funding since 2010. Total corporate funding in Health IT companies — including VC, debt, and public market financing — came to $1.8b compared to $1b in Q4 2016. Since 2010, VC funding in the Healthcare IT sector has now crossed $20b (2010-Q12017). “Digital Health funding is off to a fast start this year and there was no visible ‘Trump effect’ on investments in the sector, at least in the first quarter, and publiclytraded Digital Health companies actually fared much better in Q1 than last year,” commented Raj Prabhu, CEO of Mercom Capital Group. Healthcare practice-centric companies received 35% of the funding in Q1 2017, raising $574m 30
Since 2010, VC funding in the Healthcare IT sector has now crossed $20b.
in 50 deals compared to $261m in 42 deals in Q4 2016. Consumer-centric companies received 65% of the funding this quarter, bringing in $1b in 115 deals compared to $584m in 117 deals in Q4 2016. The top funded areas in Q1 2017 were Appointment Booking $315m, Mobile Wireless $230m, Data Analytics $193m, Population Health Management $115m, Telemedicine $112m, and Social Health Network $102m. There were 65 early round deals, including 14 Accelerator and Incubator deals. Top VC deals The top VC deals included the $200 million raised by Hudong Feng Technology (Haodaifu), $115m raised by Alignment Healthcare, $100m raised by PatientsLikeMe, $90m raised by Nuna, and $85 million raised by PointClickCare. A total of 306 investors (including four accelerators/incubators) participated in funding deals in Q1 2017 compared to 340 investors in Q4 2016, of which two were accelerators/ incubators. Health IT VC funding deals were spread across 19 countries in
Stellar M&A transactions Practice Management Solutions companies were involved in the most M&A transactions with six, followed by Apps and Data Analytics with five each, then Consulting and Telemedicine with four apiece. The top disclosed M&A transactions were the $1.1b acquisition of CoverMyMeds by McKesson, Parthenon Capital Partners (by HMS Holdings) acquisition of Eliza Corporation for $17m, Castlight Health’s $134m buy of Jiff, and the acquisition of HCI Group for $110m by Tech Mahindra. There were a total of 573 companies and investors covered. VC funding, including private equity and corporate venture capital, in the Healthcare IT sector came in at $5.1b in 622 deals in 2016, a new record for the sector. By comparison, $4.6b was raised in 2015 in 574 deals. Total corporate funding in health IT companies including debt and public market financing (plus IPOs) - came to $5.6b in 2016, a drop of 30% compared to $8b in 2015. Since 2010, the sector has received $18.5b in VC funding in 2,672 deals and almost $7.5b in debt and public market financing (including IPOs), bringing the total funding for the sector to $26b. “Venture Capital funding bounced back after declining in 2015,” comments Prabhu. “Digital Health public companies on the other hand continue to struggle.” Consumer-centric companies brought in about $3.5b in 437 deals in 2016, up from $3.1b in 403 deals in 2015. Practice-centric companies raised more than $1.6b in 185 deals in 2016, slightly up from the $1.5b raised in 171 deals in 2015. Top funded areas in 2016 include mobile apps, which received almost $1.3b, and telemedicine companies with $528m. From Mercom Capital Group
For inquiries, contact Julie Anne NuĂąez +65 3158 1386 ext 221 firstname.lastname@example.org
Dr Zubin J Daruwalla Healthcare financing and the 3 A’s
Dr. Zubin J Daruwalla Director (Healthcare) PwC South East Asian Consulting
hen I embarked on my career as a clinician, I had the hope of ensuring I would provide the 3 A’s; affordable, accessible and A+ (quality) healthcare. Being a young and idealistic man back then, little did I understand the realities of successful healthcare financing but more importantly, the difficulty of it being sustainable. Whilst we are privileged in Singapore to have a system often referred to as a hybrid co-pay one, our neighbours continue to debate and develop healthcare financing systems that are tailored to their populations. For example, only recently did Indonesia announce its plan to implement universal health coverage. Whilst socioeconomic and healthcare trends differed substantially between regions globally in the past, this is no longer the case. Economic growth, connectivity and globalisation in Asia have brought about lifestyle changes previously associated with the West. As a result, chronic diseases, mental health and ageing populations are now global problems with a large focus in Asia. In Singapore, according to the Ministry of Health, the prevalence of diabetes was 11.3% in 2010, a figure I personally believe is even higher today. A study analysing data from the Global Burden of Disease study estimates that mental illness will cost nearly 38.1 million years’ worth of healthy life by 2025 in India and China alone. Adding to this, India and China alone will also have nearly 147 million people aged 80 years and above by the year 2050. As a result, healthcare systems in Asia not only have to tackle the issues of access and provision of quality healthcare, but also have to ensure affordability as well as fiscal sustainability of these services. Supply and demand tricks Driven by the needs of ageing populations and a rising prevalence of chronic diseases, the ever-increasing demand for healthcare is creating opportunities for innovation, and new ways of delivering care, largely based on new business models, and new technology. This New Health Economy is expected to grow by 8% in 2017 and account for 30% of global revenues. However, the challenge ahead for health systems will go beyond just the classic ‘supply and demand’ equation. Health systems will have to evolve their financing mechanisms at an equally fast pace to ensure they provide their populations with the 3 A’s. Whether reimbursed or out-of-pocket, we must ensure that our patients will be able to access affordable, quality care. Furthermore, with caring for ageing populations and chronic diseases being a long-term process, financing mechanisms must take on holistic approaches to ensure sustainability and value for each dollar spent. Whether reimbursed or out-of-pocket, we must ensure that the care provided is also the most appropriate care at the most appropriate time in our patients’ journeys to ensure optimal clinical outcomes. A futuristic healthcare financing view that encompasses not only the 3 A’s but also awareness and cost-effectiveness is likely the best way forward to curtail expenditure and maximise value. For 32
Investing in early diagnosis
example, investing in early diagnosis, preventive care and disease management programs through telemedicine not only reduce a burden on the healthcare workforce but also reduce patient admissions and readmissions, at the same time generating billions of dollars in cost savings from averted hospitalisations. The Geisinger Health Plan has a remote monitoring program for patients at risk of heart failure reduced the likelihood of hospitalisation by 23%, and generated 11% in cost savings through timely follow-up and realtime data monitoring by a remote primary care management team. Many health systems have embarked on this approach. HealthTech assessments Whilst reimbursed markets such as Japan and Australia emphasise HealthTech assessments to drive value out of each dollar spent on care delivery, out-of-pocket markets such as Vietnam and India are adopting prevention and early diagnosis measures to drive costsavings and achieve optimal outcomes for the same dollar spent. In addition to Singapore recently announcing a restructuring of its public hospitals and community care programs to cope with the expected demand from its ageing population in the future, its health financing system was also restructured to accommodate a shift to universal health coverage and better prepare its citizens from catastrophic healthcare expenditures during old age. In general, incentivising patients to take health matters into their own hands drives value for each dollar spent with inactivity alone estimated to cost between US$670 to US$1,125 per person per year. As we steer into unchartered waters of dynamic sociodemographic trends and a New Health Economy, constant reflection on its impact to fiscally sustainable, value-driven care delivery will be the key to undeniable success.