Technology Integration and Industry Convergence: Bioinformatics, Patient-Empowered Point of Care, and Beyond

In this session from Medical Technologies 2014: A Frost & Sullivan Executive MindXchange, panelists discussed value-driven healthcare and how to use big data, providing insights on the challenges and opportunities posed by the evolution of healthcare, focusing on emerging markets, handling mass amounts of data, and funding innovative R&D.





MODERATED BY
Amir Jafri, Principal Partner, Executive Vice President, Netspective Communications

PANELISTS
-Joseph Boystak, Co-Chairman, Bessor-Brightwaters Pharma, Chief Executive Officer, Brightwaters Capital
-Robin Farmanfarmaian, Vice President, Strategic Relations, Singularity University
-Sanjay Shrivastava, Director, Global Marketing, Covidien
-Barbara Sosnowski, Vice President, External R&D Inflammation, ERDI Lead WRD External Partnerships, Pfizer
-Richie Etwaru, Group Vice President, Digital Innovation, Cegedim

TAKE-AWAY

The major challenge facing big data in the medical technology world revolves around the question of what to do with the data. The information is there, but it’s important to build a model that can verify and validate the data for actionable use in medicine.

BEST PRACTICES

Technology needs to create analytic systems that can properly interpret data given through information avenues, and companies must develop ways to apply it and use it.

ACTION ITEM(S) TO IMPLEMENT

Medical technology companies must focus on devices that enable patient engagement, rather than just those used for record-keeping. Success in the changing world of healthcare will require developing products that can disseminate information provided by patients and make the information actionable. The goal must be to engage patients to participate in their own care.

TAKE-AWAY

Like they are in other fields, strategies and business models in the medical world are moving toward a more data-centric focus, with the goal of conducting healthcare in a more efficient and precise manner. The medical device industry must examine what its role is in that major paradigm shift, the panelists said.

BEST PRACTICES

Companies should look to develop new technologies to compile and acquire actionable data in order to allow healthcare industries to do what they do in a more proficient and nimble manner.

Medical device companies should begin to look into emerging markets and areas that serve countries such as India and China. Focus on these markets, which have a potential to be as vast as the domestic market.

ACTION ITEM(S) TO IMPLEMENT

Companies should begin to actively engage with the worldwide medical community in emerging markets like India and China. Open dialogue with physicians in those countries can show how they are looking to do things and what technology they need so they can provide better care for their patients.

TAKE-AWAY

Of course, new products require new capital. That’s why there must be collaboration with investors and others to determine the exact cost of developing new products throughout the world.

Only about 10% of the 3 billion people who live in China and India can afford the healthcare that Americans can. That means there are opportunities to find innovative and cost-effective solutions and increase access for people around the world.

BEST PRACTICES

Accumulating data should be the first step in this process, according to the panelists. Look for solutions to treat, manage, and prevent diseases where there currently aren’t any solutions.

Opportunities for research exist in:

• The decentralization of medicine
• Value-based healthcare
• Remote monitoring and wireless applications
• Individualized health and therapeutics
• Actionable data
• The notion of competency and educational aspects
• Patient compliance and engagement

Companies should take the data, partner with different groups, and work toward analyzing and interpreting the data.

Money can be brought in through partnerships and investments, with patient advocacy as a driver. Companies should look for partners in non-medical sectors, such as telecommunications.

ACTION ITEM(S) TO IMPLEMENT

Companies can launch ventures to acquire funding for new medical technology devices to bring big data to the healthcare system. Those tools must have the ability to analyze information and make it useful for physicians and patients.

Corporate innovation exchange programs with Fortune 500 companies allow small businesses to learn from large corporations and vice versa.

FINAL THOUGHT

For big data and new technology to thrive in the evolving medical world, technology companies must find ways to make data actionable and prove the benefits for the cost and quality of care.

For more valuable information, download Frost & Sullivan's Executive MindXchange Chronicles: Medical Technologies 2014, a unique collection of all the key take-aways and best practices discussed at the event

New Growth Momentum for Private Hospitals in China?

By Ngan Yin Lai
Industry Analyst, Malaysia
Frost & Sullivan

The recent price deregulation for private hospitals in China is anticipated to stimulate new growth momentum for the sector. Post the deregulation, private hospitals have been allowed to set prices for medical services based on the principle of fair and free market competition. In addition, qualified private hospitals will be included in public health insurance schemes, similar to public hospitals. This write-up analyses the extent to which these new measures will facilitate the growth of private hospitals in China.

The Current State of China's Private Hospitals

Since 2008, China's private hospital sector has been experiencing strong growth. The number of private hospitals has increased from 5,403 in 2008 to 11,432 in 2014 (as of February), accounting for 46% of the total hospitals in the country. Outpatient volumes grew at a compound annual growth rate (CAGR) of 15%, and inpatient volumes grew at 20%, from 2008 to 2013. Although private hospitals experienced double-digit growth in patient volumes, the sector contributed only 10% of total patient volumes in 2013. Further, most private hospitals are small in size (98% of the hospitals have a bed size that is less than 500). In 2012, the number of beds for private hospitals was 582,177 (15% of the total hospital beds), and this number reached 677,000 (estimate) in 2013.

Chart 1: Hospital Outpatient Volume, China, 2008 & 2013 and Hospital Inpatient Volume, China, 2008 & 2013

Under the 12th Healthcare Reform Plan, the government aims to increase the role of private hospitals in the provision of healthcare service - private hospitals will account for 20% of total hospital beds and patient volumes by 2015.

Based on a 7.6% CAGR, the number of hospital beds will reach 5,184,000 by 2015. Based on a 7.7% CAGR for total outpatient volume and a 11.7% CAGR for total inpatient volume, total outpatient and inpatient volumes will reach 3,223 million and 178.96 million, respectively, by 2015. In 2 years, private hospitals will need to increase the number of beds to 359,800, and aim for 355 million outpatient volumes and 18.3 million inpatient volumes, to achieve the target.

The Path to Privatization Opens Up Investment Opportunities

Initiatives to open up the hospital sector for private capital were introduced in 1997. The Chinese Ministry of Health (MOH) stated that the government intended to relax rules for private investment in healthcare. 3 years later, the government permitted joint ventures between Chinese businesses and foreign investors in healthcare facilities; however, foreign equity was limited to 70%.

The healthcare reform agenda 2009-2020 reveals the firm stance of the government to encourage private investment in healthcare. Reforms have been put in place in the past few years - (i) allowing 100% foreign equity by removing the foreign investment in healthcare services under the restricted category of the Catalogue of Industries for Foreign Investment, effective 2012 and (ii) business tax exemptions.

The most recent measure to draw private capital into the hospital sector is to allow private hospitals to set their own prices for medical services and to enroll qualified private hospitals into public health insurance schemes.

This will make investing in the hospital sector more attractive as it will enable private hospitals to earn higher margins for the specialized services they offer. Many private hospitals are specialty hospitals, as the entry barrier is lower than that of general hospitals. Tapping on their strength to provide high-quality medical services and advanced technologies, private specialty hospitals cater to the healthcare needs of the burgeoning upper middle class who can afford the high prices. More than 75% of the urban population will reach an income level of $9,000 - $34,000 by 2022*. This huge potential purchasing power will create high demand for the specialized care offered by private hospitals.

The measure for enrolling private hospitals into public health insurance schemes will work as a double-edge sword for private hospitals. Being entitled to the coverage of public health insurance will encourage the general public to utilize healthcare services at public hospitals. On the other hand, private hospitals will need to conform to the prices for medical services, drugs, and medical examinations that are set by the National Development and Reform Commission once they are entitled to the reimbursement of public health insurance schemes. This will lower the profit margins of private hospitals.

The public health insurance authority will have to relax some of the requirements for private hospitals to qualify for reimbursement. For private hospitals to be included in public health insurance schemes, a minimum of 50% of their services must comprise basic medical care, as listed in the reimbursement schemes. Many private hospitals will not be able to meet the requirement because they are specialty hospitals and many of the services offered are not covered by the reimbursement schemes.

Challenges for Investing in Private Healthcare

While the prospect of investing in the hospital sector is encouraging, private capital investments in the sector will face 2 major challenges. Private hospitals have not been able to recruit experienced and skilled doctors. Most doctors prefer to work at public hospitals that provide better benefits, career advancements, and reputation. The absence of a policy that allows doctors to practice at multiple locations prevents doctors at public hospitals from working part-time at private hospitals.

The scarcity of land in big cities is another major challenge for private investors. The current land use policy provides land at low cost to public hospitals only. Private hospitals will have to absorb huge (and rising) costs for land lease, which will lead to escalating operating costs.

The latest wave of measures signifies a step forward in encouraging private investments in the hospital sector. Private companies interested in investing in the hospital sector should carefully study the intricacies of the market - policies play out differently across provinces in China due to differences in provincial politics and implementation. Investors should come up with strategies that fully utilize their strengths and core values.

Note: * McKinsey Quarterly (June 2013). Mapping China's Middle Class

Emerging Markets: Narayana Health’s Growth and Technological Innovation

An interview with
Dr. Ashutosh Raghuvanshi
Vice Chairman, Managing Director &
Group Chief Executive Officer
Narayana Health

By Sam Narisi




Over the past several years, India’s Narayana Health has experienced tremendous growth. After beginning in 2001 as a 225-bed hospital in Bangalore, Narayana became a two-hospital system in 2007 and since that time has grown to include 27 facilities in 16 different cities.

Even more growth is on the horizon, as Narayana aims to continue feeling India’s need for affordable high-quality healthcare. “There is a big gap between the supply and demand for high-quality care in India,” said Dr. Ashutosh Raghuvanshi, Narayana’s Vice Chairman, Managing Director & Group Chief Executive Officer.

Technology has played a big role in Narayana’s growth, helping the organization both reduce costs and expand its patient reach. Moving IT systems to the cloud has made an especially big impact, according to Raghuvanshi. Using cloud-based IT services allows Narayana to pay based how much is used, which has allowed for significant cost reductions.

Remote consultations

In addition, the move to the cloud has allowed Narayana to integrate and consolidate patient data from across the entire system. That’s made it possible to treat patients remotely, and with fewer specialists on staff. For instance, a patient can have imaging done in one hospital, and the results can be viewed by a specialist in a different facility. “We don’t have to have a specialist in every location,” Raghuvanshi said. “We can treat many patients effectively without have a large number of these specialists.”

Narayana is also offering more telehealth services, which is critical in giving access to high-quality, low-cost care to as many people as possible despite economic and geographic boundaries. In addition to its hospitals, the organization now runs a number of e-health clinics patients can also visit.

Those clinics are staffed by a paramedical workforce, so Narayana doesn’t necessary need physicians on site. Patients can have some diagnostics done at one of those locations and then visit a main hospital if necessary.

Again, this allows Narayana to treat more patients with a limited staff of specialists. Despite employing the largest number of doctors in India, the organization still faces an overall shortage of medical professionals in the country. In addition to expanding the reach through technology, Narayana has also invested in a teaching hospital to develop more skilled clinicians.

Narayana also uses those e-health clinics to track disease patterns and help improve overall population health. With all patient data collected in electronic health records, the organization is able to analyze that information to discover trends and detect outbreaks and other incidents.

Technology is key

Moving forward, Narayana will continue adopting new technology to help fulfill its missing of providing affordable high-quality care. “Technology is the only tool that can help keep the costs in the range that people in these areas can afford,” Raghuvanshi said.

This includes expansion into biotechnology, as well as greater use of clinical decision support, particularly for the hospitals’ nursing staff. By using those tools, Raghuvanshi said, nurses will be aware of available treatment options without having to do too much analysis on their own. That will help to standardize treatments, as well as increase accountability and the quality of care.

While there are some challenges that come from operating a healthcare organization in a country like India, Raghuvanshi said, those conditions also lead to some great opportunities, especially when it comes to technological advancement and innovation.

The environment in India and other emerging markets is typically less restrictive compared to other places. “The regulations and restrictive environment that exist in other places is not there,” Raghuvanshi said. “That is an advantage to help us innovate on the technology front.”

Also, in the US for example, the system is very payer-focused. So a lot of energy is spent developing technology that can help with better billing for hospitals, rather than with creating newer and better systems to improve the quality of care.

“Changing those legacies can be very difficult,” Raghuvanshi said. “We’re starting from a clean slate, and we are more focused on evidence-based care and emerging technology”

Healthcare IT in Latin America: A Conversation with Industry Leaders

Interviewed by Federico Baguear, Industry Analyst, Healthcare – Latin America


Introduction

An analysis of the Latin American Hospital Information System (HIS) market is showing some interesting and promising results. In 2012, the Latin American market reached $550 million and is expected to reach $1100 million in 2018 with a compound annual rate of 14.9%, as the region is now in a growth phase for health IT.

Federico Baguear, industry analyst with Frost & Sullivan, interviewed CSC, everis and NoemaLife as part of the healthcare IT market trends analysis in Latin America.

Guillermo Ramas is industry general manager for Southern Europe & Latin America within the Healthcare division of CSC. Ramas has been part of the management in companies such as Lawson, Agresso Spain, Agfa Healthcare IT and Shared Medical Systems. In 2008, he became iSoft's healthcare director for South Europe and Latin America, a position he still holds in CSC Healthcare after the fusion of the companies in August 2011.

Mario Chao is healthcare partner and global director with everis, based in Mexico D.F. He has more than 20 years of consulting experience and 10 years in healthcare and government.

Cristián Power has been general manager with NoemaLife Chile and Peru since 2011. He has 15 years of experience in IT. After obtaining a MSc in Image Processing at the University of Paris, Power returned to Chile to develop several projects related to RIS, PACS, LIS and EMR.


This Movers & Shakers interview focuses on five points centric to the current situation in Latin America: healthcare IT growth, challenges presented in system adoption, the public sector role, market needs, and strategies each company is applying to access the market.

Frost & Sullivan is honored to feature Ramas, Chao, and Power as part of its Movers & Shakers series, and thanks them for sharing their views and perspectives on the Latin American HC IT market.

Federico Baguear: There is a global trend toward the use of healthcare IT (HC IT) systems to improve healthcare administration and patient treatment. Which trends are you seeing in Latin America? What are the main benefits of HC IT solution adoption?

Guillermo Ramas: There is a big interest in using technology information systems in healthcare in Latin America. Mexico is seen as a reference standard in the region because it represents one of the most advanced countries in terms of specific regulations and regional projects. Other countries like Ecuador, Panama and Honduras are facing ambitious technology projects in which one of the main objectives is to implement electronic medical records (EMR).

The use of information and communication technologies (ICT) systems offers numerous benefits to the healthcare system. Organizations and healthcare delivery institutions increase management effectiveness and efficiency in both financial and clinical areas. This allows healthcare professionals to focus on providing better-quality patient care. EMR enables professionals to have information whenever it is needed, leading to major process control and better diagnosis.

In the long term, these solutions allow optimization of resources by increasing productivity, thereby helping healthcare institutions to be more competitive and provide better services to their patients.

Mario Chao: The informatization of the healthcare sector warrants process efficiency and decision support by providing access to the right information at the right time.

The use of EMR provides an opportunity to improve healthcare, more comprehensive control of population health, better patient safety, reduced waiting times for information, and increased precision of diagnosis. This comes about through multidisciplinary information-sharing at the same time, and ability to precisely control and manage expenses and costs. That is the reason EMR is the cornerstone of healthcare industry transformation. The EMR provides the basic platform that allows building an ecosystem based on registers and events because it records all the transactional health movements.

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Collaborating to Meet Global Regulatory Challenges

An interview with
Elisabeth George
Vice President of Global Government Affairs, Regulations and Standards
Philips Healthcare

Interviewed by Sam Narisi

Medical technology companies often struggle to balance the need to bring new products and innovations to market quickly with the ever changing   regulations and standards. That is an especially big challenge for companies working globally due to the difference in the laws of different countries.

In her role at Philips Healthcare, Elisabeth George is responsible for both helping shape healthcare regulations around the world, as well as making sure her company can strategically adapt to the shifting rules. Frost & Sullivan recent spoke with Elisabeth about some of the strategies companies can use to navigate the complex global regulatory environment.

Describe your role with Philips Healthcare.

I’m responsible, from a global perspective, for interface with government affairs, regulations and standards. I’m working from a strategic perspective toward future regulations and standards. When a regulator starts developing a guidance document or a new regulation, I’m a focal point for our company. I work with our different businesses within our company as well as interact with the different stakeholders  to evaluate those proposals and represent the company back to the regulatory authority, explaining either why I disagree or agree with what they’ve defined.

Then once a new regulation or guidance document comes out, my team puts together the training and deploys it across the company. We also participate around the world  in a number of standards organizations as well as industry organizations including as a board member or a chairperson of committees.

What are some of the trends you see developing in the regulatory landscape?

There a couple of things. First off, every country that has a regulation seems to be changing them, and every country that doesn’t have a regulation seems to be defining and implementing one. So that’s a big challenge. Another change that is somewhat on the positive side is that a number of the larger regulatory regions –  US, Japan, China, Russia, Brazil, and Europe – are all working together toward some aspect of convergence on regulations through IMDRF (the International Medical Device Regulators Forum). They are realizing that the world is getting smaller and if they all have different ways of doing things it impacts time to market, availability to patients, and potentially patient care.

Another new area is anything having to do with the use of IT, including medical apps on phones and the use of software in the clinical environment. Everything that used to be mechanical is becoming much more electronic and software-based. There’s also the whole Big Data aspect, where there’s a desire to collect information and for people to use that information in all sorts of decisions including financial, clinical and environmental. There are questions around who owns the data and how they’re allowed to use it, as well as concerns regarding privacy and the accuracy of the data. With all of health IT, there is also the challenge of cyber security.

One big challenge in medicine is that the regulations typically don’t evolve as fast as the technology changes. What are some things companies can do about that?

That’s a problem everywhere in the world. Some of the emerging countries that are just starting to implement regulations have very slow burdensome processes that require very significant testing, even for products that have been used in the US for several years. So that’s a challenge, and I think one of the ways to work on that is to spend a lot of time with the regulators to help them understand what regulations are in place elsewhere. Try to get those regulators talking to regulators from the other countries. Offer to educate them, and if possible, instead of sending the product to them to test it, offer to have regulators come and see the product in use in a hospital or bring them into the factories.

When dealing with regulations in the US, again the way to help overcome these challenges is to work with the regulators. The FDA has people involved in the standards process so they can partner with industry on standards development. It’s important not to be afraid of regulators and to work with them either directly or indirectly by joining an industry group.  The FDA has an Experiential Learning Program (ELP) that industry should reach out to the FDA to engage them in learning about new technology.

Companies can also reach out to consultants, and make use of opportunities like Frost & Sullivan events to network and find out what other people are doing. Don’t assume that there’s only one way. It’s a moving target, so never assume that if you analyzed something yesterday that it will have exactly the same answer today. There are a lot of inputs that regulators are getting every day, from competitors of your company, from post-market complaints and failures, and from patients. Regulators realize they have to change, and agencies are willing to have open door discussions, and they’re willing to take risks with us as well.  Companies must use the Benefit Risk thought process when making decisions.

Given how constantly things are changing, what advice do you have for staying current, especially when dealing with regulations globally?

One way is what I call “feet on the street,” which is having people physically in the region that communicate with regulators and stay on top of local regulations. There are also different organizations that publish updates to regulations and offer pointers. Again, it helps also to be a part of a local industry organization, such as AdvaMed  or MITA in the US. Even if you can’t actively participate in all of the committees they have, you can be on their email list so you get updates to see what’s changing. It’s also important is spend time surfing the web for information. And again, whenever you can, network.

None of these are perfect, and to be honest we do all of them and don’t always find out about every change. But when we’re caught off guard, we try to find out why we were caught off guard. The good news is most of time it’s one of those weird regulations or requirements that’s maybe only applicable to one small slice of our product line. We’re not usually caught off guard when it’s a major change.

What are some of the differences in introducing products in emerging markets such as India or Latin America, for example, compared to the US or Europe?

If I look at India specifically, fortunately for us, most of our products are not on their medical list that requires those products to go through an extra-burdensome process. What they require is that the country of origin regulatory submission has been done. They do happen to have more  burdensome radiation requirements, so for our imaging products, we took some of our radiation specialists there and scheduled meetings with the people who work on those regulations. We went through some general training and shared the practices we go through to ensure safety and effective performance and all of that. That allowed us to integrate what the regulators needed into our design process so it added next to no effort on our part. We also helped introduce them to people in the radiation area of the FDA, so they understood what they were doing in the US. Those relationships are very valuable.

Another example I’ll use is Brazil. A number of years ago, Brazil had no regulations. One thing we did early on before they started to develop regulations was to visit them with the US State Department and try to educate them on the many different regulatory schemes that were already out there. I was part of that group, but it wasn’t just me. It was part of an industry group effort. Let’s say you don’t know what’s going on in that country and you’re not really sure how to find out. You can find the medical device industry group in that area, and the other medical device manufacturers in that area. Even if they’re only doing band-aids and you’re doing an MRI machine, at least you can talk to them and find out about the oversight process, what’s expected, and who you can talk to.

Especially if you’re a small company and you don’t know what to do, find some local networking opportunities. Regulatory people aren’t like the R&D people and design engineers who don’t want to share general perspectives information with competitors because it may be proprietary. I’m not going to share the dirty details of my regulatory submission with other companies, but I can tell them who they may be able to call for help, or I can  reach out and ask a question to one of my contacts.