Strategies to Foray into Digital Health by @JPpattanaik

Author: JP Pattanaik, Sr. Business Analyst & Akanksha Rajeev, Business Consultant

in this article, provide an insight to various strategic options for Indian IT product-centered organisations to consider foraying into healthcare industry

The article was first published in Express Healthcare, Feb 2016 Edition. The article is republished here with the authors’ permission
24 Mar 2016, India



Abstract 

The lucrativeness offered by the healthcare IT industry has brought significant attention worldwide. Healthcare industry is considered ever green and healthcare IT has attracted the attention of global players for investments. There are a section of players who are pioneers in the industry and have recorded significant growth. At the same time there are laggards who want to build such capabilities and tap the untapped market following the recent industry trends and success stories. Healthcare IT organisations have to cope with transforming business model while adhering to strict regulatory demands of the industry. They need to carefully adopt strategies based on the organisational maturity, capital and the time they have for go-to-market. In pursuit of quick success, often organisations commit mistakes choosing the right approach while building potential health IT product capabilities. This article highlights different strategic options for Indian IT product-centered organisations thinking of foraying into the healthcare industry
Global Healthcare and Healthcare IT spending trends

According to industry estimates, the global healthcare spending is expected to grow at an average of 5.2 per cent year on year during 2014 – 2018 to a total of $9.3 trillion. In spite of its vastness, both developed and emerging nations are dealing with issues like ageing population, rising incidences of chronic diseases, rapidly increasing cost of healthcare, disparity in quality of care, infrastructural challenges, workforce shortage, non-uniform distribution of healthcare facilities across the community locations etc. The burden faced globally today has never been so challenging than ever it was.

An estimate by the Economist Intelligence Unit (EIU) the regional healthcare spending during the year 2015 is expected to be as given in the table.
Globally, most nations have been challenged to improve quality of care while reducing the cost of healthcare by means of inventing cost effective methods for an optimal outcome. The challenges described above have led to adoption of healthcare IT solutions such as Electronic Medical Records (EMR)/ Electronic Health Records (EHR) for safe storage of healthcare information and to make more informed decision.
According to an estimate by MarketsandMarkets, a leading research organisation, the global healthcare IT market is estimated to reach $56.7 billion by 2017 — up from $40.4 billion in 2012 — due to the demand for clinical information technology, administrative solutions and services. Among the various healthcare IT solutions offered, EMR/ EHR segment dominates the sector.
Gartner estimates healthcare providers in India are likely to spend $1.2 billion on healthcare IT products and services in 2015, a seven per cent growth over 2014. Software spending is likely to grow 6.2 per cent to reach $103 million in 2015, up from $97 million in 2014, led by growth in vertical specific software. An estimate by Frost & Sullivan, healthcare information technology market in India is expected to reach $1.45 billion in 2018 mainly due to fast adoption of technology by stake-holders. India being a developing nation, the health IT spending is still much less than that of the developed nations. The rest of the paper discusses various drivers for healthcare IT initiatives, its attractiveness and approaches for Indian health IT organisations for an effective go-to-market strategy.
Drivers of Healthcare IT in India 

Some of the major factors contributing to the growth of healthcare IT globally are listed below:

  • The continuously growing pressure to cut healthcare costs
  • Need for care coordination and management demanding integrated healthcare systems
  • High rate of return on investment in healthcare systems
  • Financial support and incentives from the government
  • Growth of medical tourism
  • Government initiatives, conducive policies for the sector
  • The rise in the ageing population
  • Growing demand of health IT products to reduce medication errors
  • Rise in incidences of chronic and lifestyle disorders
  • More informed and engaged patients.

Why do more and more Indian IT organisations want to venture into Healthcare Industry?  
Healthcare has a huge addressable market. India as a country has witnessed a rather steep growth trajectory only in the last decade with the advent of the private sector. The influence of technology has been an important growth driver, with healthcare models based on IT intervention now becoming a reality. The accessibility of healthcare today is more than it ever was, consequently increasing the opportunity for new players. Emergence of new delivery models which are scalable, less capital intensive and yet promise better earnings is one of the major reasons the healthcare sector has lured the investors. Diagnostic chains, single speciality clinics, wellness centres, primary care set-ups etc. are all emerging models of healthcare and it is still evolving. In a nutshell, healthcare industry provides array of opportunities for new experiments at a promising return on investments. The penetration of healthcare IT is still in its infancy providing ample opportunities to all competent healthcare IT solution providers. With increased importance to healthcare needs, the adoption of modern healthcare IT systems is bound to grow.


Approaches for Go-to-Market  

In order to tap the business opportunity presented by the IT enablement of healthcare institutions, the IT organisation should evaluate options and consider one that suits the best. A single approach may not fit all. In pursuit of quick success, often IT organisations opt for suboptimal options, which may not meet their long term objectives. Following are the three strategic options to realise the business opportunity presented by healthcare IT market:
  • Approach 1: MODIFY Enhancing an open source software
  • Approach 2: CREATE Building a greenfield system
  • Approach 3: ACQUIRE Acquiring a licensed product

The table below provides the advantages and disadvantages associated with each of the approaches.
An organisation should evaluate the functional, technical and business capabilities while prioritising a strategic approach. Each of the approaches can be evaluated based on the following parameters:

Cost and effort
Total cost of ownership (TCO): Total cost of ownership refers to the cost to the organisation for sustaining a product line. This includes the license fee for the product and cost of the application maintenance and support.
Effort: This is the effort that needs to be put in by the organisation to meet the desired product criteria driven by Customer/ Market needs.
Potential Revenue: This refers to the revenue that would be generated by the organisation on entering the market with the stated product.

Market factors
Time to market: This is the time taken to launch the product in the market for customers.
Market acceptability risk: The risk that the product launched into the market is not accepted by the clients. This is particularly high for a new product launch.

System related factors
Customisability: The capability of a system to be easily customised for desired features. Creation of a greenfield system offers the highest amount of flexibility as it can be designed keeping product expansion in mind.
Scalability: The capability of a system to be easily scalable for larger implementations. While a greenfield system can be designed to be scalable an open source or acquired product may have limitations.
Skilled resource availability: The major constraint of a system is the technology stack that it is built on. Having technically sound resources trained exclusively on the same platform is one of the major factors for system selection.
Legal/ IP Risk: Enhancing and commercialising existing open source systems would give rise to potential legal risks. Some systems are covered under various public licenses which prohibit the commercial use for profit.
Security risk: With the ever growing population that is being catered through the IT enabled system, security of the healthcare data plays a vital role in the evaluation of a system. Many laws of the land mandate patient privacy and prohibit the transfer or usage of the healthcare data and thus require utmost authorisation and protection for the same. Any shortcomings in the system that compromises patient data security would pose a security risk.
The evaluation of each of the approaches based on the above mentioned parameters are summarised in Figure 2.

Key Considerations  

A greenfield system though requires investments, is a safer approach as it minimises some the risks demonstrated in other two approaches. However, all organisations may not be in a position to have proprietary systems to exploit the immediate market opportunities presented. The pioneers always have the advantage to exploit the market opportunities with less competition. New players should carefully choose the market segment they want to make an entry. When an organisation lacks significant market presence and experience, it may be recommended that the organisation should take baby steps and stay profitable yet. A big bang approach may not support the ultimate objectives of the organisation. In this context it may be recommended to health IT vendors that the
Approach –‘MODIFY’ can be considered as a short term strategy with an objective of learnings, small scale implementations and R&D.
Approaches – ‘CREATE’ and ‘ACQUIRE’ can be considered as long term strategies with an objective of achieving the vision of the organisation.
Approach – CREATE demands investment in terms of time and ensuring the product exceeds expectations than a competing product while 
Approach – ACQUIRE enables the organisation a quicker go-to-market for realising the opportunities. However, the risks associated with the approach must be given due consideration.

Conclusions  

The lucrativeness of the healthcare IT market has received significant attention. It is an obvious choice to exploit the opportunities presented. The pioneers and the laggards are equally keen to make the best of the opportunities. An approach that works best for a pioneer may not be of same value to a beginner. In pursuit of quick success, organisations should not commit the mistakes of engaging in a wrong approach to make a foray in hurry. It has been rightly said, “There is no shortcut to success.” Organisations need to carry out a risk and return tradeoff before formulating and executing any strategies for the best possible outcome.

References  

i. 2015 Global Healthcare Outlook. Common Goals and Competing Priorities By Deloitte, Whitepaper, 2015.
(http://www2.deloitte.com/content/dam/Deloitte/global/Documents/Life-Sciences-Health-Care/gx-lshc-2015-health-care-outlook-global.pdf)
ii. Global healthcare IT market estimated to reach $56.7B by 2017 By Ashley Gold, News Article, FierceHealth IT, May 10, 2013.
(http://www.fiercehealthit.com/story/global-healthcare-it-market-estimated-reach-567b-2017/2013-05-10)
iii. 2014 Global health care outlook: Shared challenges, shared opportunities By Deloitte, Whitepaper, 2014.
(http://www2.deloitte.com/content/dam/Deloitte/global/Documents/Life-Sciences-Health-Care/dttl-lshc-2014-global-health-care-sector-report.pdf)
iv. Overview of International EMR/EHR Markets: Results from a Survey of Leading Health Care Companies By Accenture, Whitepaper, August 2010.
(http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture_EMR_Markets_Whitepaper_vfinal.pdf)
v. Healthcare IT market in India may touch $1,454 million: Study
(http://timesofindia.indiatimes.com/tech/tech-news/Healthcare-IT-market-in-India-may-touch-1454-million-Study/articleshow/24142487.cms)
vi. IT spending by Indian healthcare providers may rise 7 per cent in 2015, Gartner says
(http://timesofindia.indiatimes.com/business/india-business/IT-spending-by-Indian-healthcare-providers-may-rise-7-in-2015-Gartner-says/articleshow/47295710.cms)

Disclaimer: The ideas and opinions shared in this article are personal views of the authors and have no bearing or impact on the official policy or position of United Health Group or its entities

Authors

JP Pattanaik

Healthcare Management and IT Consulting
Akanksha Rajeev

Healthcare Management and IT Consulting
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Top #DigitalHealth Trends to expect in 2016 by @AmandaShaffer14 @pankajguptadr

Author: Amanda Flowers & Dr. Pankaj Gupta


The article was first published in Healthcare-IT Business Strategy. The article is republished here with the authors’ permission
17 March.2016, India

The Technology has transformed healthcare around the world at a faster rate in the last few years than at any other time in history. There are many exciting innovations poised to help improve patient outcomes and the landscape of healthcare as a whole over the next few years. For 2016, we can expect to see the following IT driven changes in India:
Expanding Telemedicine Services

The telemedicine market in India is expected to reach a valuation of about $18.7 million by 2017, according to Deloitte. Since telemedicine makes it possible to provide needed medical services from a distance, this may be particularly helpful for individuals in rural communities that do not have access to the larger hospitals and centralized facilities. Medical professionals can provide advice to patients and can even consult with patients about specific issues using video chat options.
Greater Integration of SMAC

SMAC, standing for Social, Mobile, Analytics, and Cloud technologies have transformed every business in India and around the world and healthcare is no exception. As medical facilities get on board with using social options, patients will be able to interact with their doctors and obtain information about their health and well being in new and convenient ways. Analytics in healthcare will allow information to be analyzed and cross referenced, assisting with research and outcome improvement.


Mobile integration puts health information at the patient’s fingertips in a way that was not possible in the past. This may help improve outcomes and communications between medical providers and patients in countless ways as the shift to mobile is embraced. The movement from client server to cloud is shifting the industry IT vendor landscape, with many smaller and newer vendors beginning to replace large vendors that have traditionally assisted with IT needs.
Increased Use of Medical Wearable Devices

The use of health and fitness wearables has increased substantially over the past few years and is expected to continue to increase at an ever-faster rate until about 2020. Start-up companies are experimenting with creating wearables featuring health IT features. We may see prototypes emerge this year that allow patients to instantly send remote information about biometric data that is obtained using sensors in various medical wearables. This could allow physicians to spot medical issues much faster.

Improved Mobile Access to Health Insurance

Private health insurance covers about three percent of India’s population. The government health plan covers about eight to nine percent of India’s population, while the rest is paid out of pocket. In 2015 the Parliament passed the Insurance Bill where the FDI in Insurance was raised to 49 percent and health insurance has been declared as a separate business. Also 100 percent FDI was allowed in medical devices. These two policy changes will bring a boom to the mHealth and health insurance market in 2016-2017.We predict Insurance support for mHealth solutions including outpatient visits and chronic disease management or non-communicable diseases [NCD] as it is called in India.

Many companies now also allow individuals to apply for health insurance using mobile apps. In 2016, we can expect to see even greater competition in the industry with more mobile access and improvements in automating the claims process.
More Complete Patient Histories with EHRs

EHR and MDDS for health domain standards were notified in September 2013 and approved in December 2013, respectively. As medical facilities adjust to using systems to keep electronic records, we can expect to see more complete patient histories begin to affect outcomes and standards of care. This is especially true across borders, as many developed nations are now employing the same standards for coding and keeping EHRs. We may see 2016 bring forth improved software that simplifies electronic record keeping, transitions of care, coding, and billing.

Widespread Adoption of Surgical Robots

India has been behind the ball in adopting surgical robots for some time now, but we may see many more robots flood the hospitals this year. Intuitive Surgical, the creator of the U.S. based da Vinci surgical systems, considers India an important market. The Vattikuti Foundation plans to increase the number of surgeons trained to perform robotic surgeries from about 147 currently to 300 by 2020.

IoT Revolutionizing Patient Care

The Internet of Things is an extremely beneficial addition to the medical industry. We expect IoT platforms to emerge that will enable integration of all healthcare applications, devices, and things. Health monitoring devices can track vital patient information such as blood pressure, heart rate, and blood sugar levels every single day and communicate this information to medical professionals. Pacemakers and other medical devices can also be connected so that information is transmitted daily and not just during doctor visits. Medical professionals can directly communicate when information is worrisome and can save time from running unnecessary tests when health signs are good.
CRM Improving Patient Relations

Customer relationship management has always been important, but is now easier than ever because of SMAC technologies and EHRs. Doctors can communicate more freely with patients and can track all interactions for future review. These options will help make doctor/patient relations more personalized. A personalized approach will improve patient satisfaction and may also help to improve outcomes.
Authors

Article By: Dr. Pankaj Gupta

Digital Health Influencer & SMAC / IoT Speaker | Healthcare Business Executive, Chief Medical Informatics Officer at ProMed Network AG | Managing Partner at TAURUS GLOCAL CONSULTING | Director at Taurus Globalsourcing Inc.
Amanda Flowers

a graduate in Psychology, with minor in English Literature and Public Health. She draws on her knowledge of these subjects to create online content that addresses human needs in a simple way. Flowers is currently a freelance health blogger and working for Blue Cross Blue Shield of NC

#Infographic : Healthcare breaches by the numbers

Recently a report stated $15, as the cost of each healthcare record stolen. The #Infographic was developed based on the article,

Healthcare Breaches by the Numbers by Bernie Monegain @bernie_HITN in Healthcare IT News

Author

Team HCITExperts

Your partner in Digital Health Transformation using innovative and insightful ideas

#Infographic : 7 Types of Cyber Threats

  • 61% of business leaders see cyber as a serious business threat, 
  • 140 countries business leaders say cyber threats us highest concern
  • $445B estimated annual toll of cybercrime on global economy
  • 67% of enterprise organisations believe that the threat landscape is worse today than it was 2 years ago – ESG: Threat Intelligence as part of Cyber Situational Awareness
Cyber Threats have been increasing over the past years. It is important to therefore understand what are the types of Cyber Threats that one must guard against, personally and as an organisation.
We prepared this Infographic from an article that appeared in Healthcare IT News, by @SullyHIT titled ‘7 cyber threats worst than PHI a summary of Richard Clark’s talk’




Author

Team HCITExperts

Your partner in Digital Health Transformation using innovative and insightful ideas