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APAC Healthcare Information Technology Outlook
For more information contact:Simranjit SinghDirector Healthcare Practice APACE-mail: [email protected]: 65 91473750
For more information contact:Simranjit SinghDirector Healthcare Practice APACE-mail: [email protected]: 65 91473750
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Setting the Scene Outlook for Healthcare Industry from 2010-12
Source: Frost & Sullilvan ,2010)
Global Healthcare Market : 2009
• US and Europe were impacted in a major way by global crisis
• Asia also slowed down but not as much as the West
• Valuations were low and M&A was high, many smaller Biotech companies struggled
• Major organizational restructuring occurred, along with portfolios being reassessed
Global Healthcare Market : 2010-12
• Recovery of the markets to a large extent with strong growth in Asia
• Start of major patent expiries
• M&A activity down in the West but could be important in Asia, restructuring will continue
• Asia becoming increasingly important as a market and outsourcing hub
• 4Ps to drive market: Preventive, Personalized, Predictive & Personal Responsibility
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Global vs. APAC: The New FrontierBy 2012 APAC expected to be close to 27% of global market
Source: Frost & Sullilvan ,2010)
247 277 311 348
815 880 906 934
0
200
400
600
800
1000
1200
1400
1600
1800
2009 2010 2011 2012
10621157
12181282
23.9%23.9%
27.2%27.2%
23.2%23.2%
26.4%26.4%
CAGR12.2%CAGR12.2%
CAGR6.47%CAGR6.47%
Global & APAC Healthcare Revenues US$ Bn, 2009-2012
• By 2015 APAC could represent ~40% of global market!
Source: Frost & Sullivan
Rest of the World
APAC
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Asia is however transitioningMoving toward a Multi–Polar World Order
Source: Frost & Sullilvan ,2010)
Asia Pacific Market : 2009
• Slowing down of GDP in mature markets – Japan and Australia took a big hit
• Global consolidation left a difficult mess for integration on a local level – job losses and portfolio realignment
• Price cutting and playing the margins game
• The slow down for Medical Tourism
• Asia started to set up infrastructure for offshoring and outsourcing for US/EU companies
Asia Pacific Market : 2012
• A shift in the center of the world economically and strategically to Asia
• Asia to move from export led development to consumption led growth
• APAC the fastest growing pharma market and API production hub
• Increased government attention to primary and community based healthcare.
• Focus on building infrastructure and education: government role will be higher
• Increased use of mobile technology in healthcare service delivery
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Key Healthcare Facts
China India Germany USDemography
Population 1.33 billion 1.16 billion 82.4 million 307.2 million
Population growth 0.7% 1.6% - 0.1% 1.0%
% aged 65+ 8.1% 5.3% 20.3% 12.8%
Health expenditure
Health expenditure US$ 198 B US$ 59.3 B US$ 381.5 B US$ 2,181.8 B
Per capita US$ 342 US$ 109 US$ 3328 US$ 6714
% of GDP 4.5 % 4.9 % 10.4% 15.3%
Medical Industry
# beds/1000 people 2.2 0.7 8.3 3.2
# Doctors/1000 people 1.4 0.6 3.4 2.6
# hospitals (>county) 18,396 13,896 2,200 5,794
Avg. length of stay (days) 10.9 5-7 9 7.1
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Basic Hospital Overview
County County HospitalsHospitals
Level IILevel II
Rural ClinicsRural Clinics
Mid-level general
hospitals
Small hospitals providing
primary care
Single doctor operations
Urban
Township Township
HospitalsHospitals Community HospitalsCommunity Hospitals
Community Health Centers / ClinicsCommunity Health Centers / Clinics
High-level general and
specialty hospitalsRural Level IIILevel III
Level ILevel I
LevelsIII, II & I
LevelsIII, II & I
Level III (A) – 500 beds plusLevel II (B) – 100 – 499 bedsLevel I – less than 100 beds
Level III (A) – 500 beds plusLevel II (B) – 100 – 499 bedsLevel I – less than 100 beds
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Medical Tourism - Most suitable location for setting up/expanding hospitals
Objective – Evaluating the most suitable location for setting up/expanding hospitals, catering to medical tourists. The countries with the lowest score are be deemed the most attractive location for a new private hospital.
Countries are ranked according to the following scale:
1 – most favourable ; 2 – favourable ; 3 – neutral ; 4 – unfavourable ; 5 – most unfavourable
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Note: All figures are rounded; the base year is 2009. Source: Frost and SullivanNote: All figures are rounded; the base year is 2009. Source: Frost and Sullivan
*Healthcare IT includes: Software, Hardware, IT services and Lifesciences IT
Asia Pacific Life sciences and Health IT Market*Interoperability challenges hinder adoption
7.1 7.9 8.8 9.8
43.5 46.7 49.6 52.7
0
10
20
30
40
50
60
70
80
2009 2010 2011 2012
Rest of the World
APAC
14.5%14.5%
15.7%15.7%
Market Drivers
Market Restraints
Operational efficiency
Strong and sustained demand for healthcare services
Demand for higher quality of healthcare and access to information
Interoperability of discrete medical equipment
Bandwidth
Lack of skilled resources for implementation
Lifesciences & Healthcare IT, US$ Bn, 2009-2012
CAGR7%
CAGR7%
CAGR11.3%CAGR11.3%
APAC Share
50.654.6
58.4 62.5
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0
0
0
ClinicalInformation
Systems
ClinicalInformation
Systems
Hospital Administrative
Systems
Hospital Administrative
Systems
ERP,SCM
Systems
ERP,SCM
Systems
HealthInteroperability
Solutions
HealthInteroperability
Solutions
EMR/PHREMR/PHR
Top Growth Opportunities : APAC Life sciences and Health IT Market
APAC market 2010 : ~US$ 220 mn; CAGR ~9.5% Rise in international patients will drive use of CPOE, PAS, BI, etc
APAC market 2010 : ~US$ 1 bn+; CAGR ~5%
Demand from new hospitals, clinics, specialty centers
Pharma companies, demand arises from integrating drug distribution & clinical trials
APAC market 2010 : ~US$ 310 mn; CAGR ~3.5%
Government eHealth programs such as Healthelink in Australia, Intelligent Nation 2015 (iN2015), by the Ministry of Health in Singapore
APAC market 2010 : ~ US$ 670 mn; CAGR ~9%. Investment will be made into sophisticated clinical systems based on
specialties
APAC market 2010 : ~US$ 440 mn; CAGR ~7%
Large scale national initiatives announced by Singapore, Australia, Hong Kong and Japan
ERP : Enterprise Resource PlanningSCM : Supply Chain Management
Source: Frost & Sullivan.
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Frost & Sullivan Healthcare CIO Survey
Conducted in February – March 2009
•Countries: Malaysia, India, China, and Thailand
•Respondents: CIOs, CFOs/VP Finance of 40 Leading Hospitals
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Tighter Access To Capital Is Affecting HIT Projects
• 74% CFOs/VPs Finance are delaying or lengthening development of new facilities, facility renovations and health IT initiatives.
• 33% reported cutting department budgets,
• Those who reported an increase in their IT capital budgets (11%) are finding ways to reduce costs by aggressively negotiating with payers or creating OPEX financing models with vendors
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2009 Trends in HIT Spending: APAC vs US
• Most APAC tertiary care hospitals have seen a surprising increase of up to 10% in the IT budget for 2009.
• Contrary to APAC, US hospitals declared up to 50% budget decrease in IT spending.
• China remains the only country where hospitals have not cut budgets with majority having an increase of 20%.
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2009 Operating Budgets Targets: APAC vs US
• Budget cuts in APAC region will be directed at hardware (70%). The situation is reversed in US where hardware constituted only 32 % with applications scoring more than 60%
• 65% of CFOs & CIOs advised that the annual budgets for running their departments will increase or stay the same in 2009 .
• Among the CIOs who are cutting their 2009 operating budgets, 59% plan to reduce IT services, 30% will cut staff, and 27% will decrease new applications and other software.
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Human Factor Play Major Role in HIT Adoption
Challenges Faced By Healthcare Organisations
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%Respondents
Choice
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Interoperability and Patient Safety are to Drive HIT Investments in the next 5 years
0 1 2 3 4 5 6
Help to reach more patients/Grow Business
Improve interaction with the patients (e.g. …
Facilitate access by patients to test results
Changes in government/regional legal authority …
Support for expansion/reorganization/merger
Enhance overall organisational performance
Improve cost control/reduce costs/increase …
Reduce medical errors/Improve Patient safety
Improve Quality of care
Improve availability and accessibility of patient …
Improve security and privacy provisions
Improve links with the suppliers for more …
Promote your hospital name by taking leadership …
Other(s)
Factors to likely influence IT Investment
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Priorities for HIT Shift from Administrative To Clinical Systems
Top priorities areas for IT Investment are Clinical Information Systems & Hospital information Systems
As many hospitals have implemented the basic administrative HIS functions, they are now moving towards applications that improve clinical outcomes and patient safety.
0 1 2 3 4 5 6 7 8 9 10
Patient Administration & ADT Information SystemClinical Information Systems
Medico Technical /Ancillary Information SystemsHospital Information System
Laboratory Information SystemRadiology Information SystemFinancial Information System
Billing SystemPharmacy Information System
Homecare SystemInventory System
HR SystemBlood Bank System
CRM SystemSupply Chain System
Facility Management SystemOffice Automation
Others (Claims Processing, EMR)
Ranking
Top Priorities for IT Investment - Applications
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Mobility is The Next Generation HIT Infrastructure
Mobile device and wireless technologies are the top priorities of IT investments most hospitals.
Some of the hospitals are also investing in advanced technologies such as Telemedicine and Voice Recognition applications.
0 5 10
Mobile Devices: PDA, Tablet PC, …
Wireless Technologies
Broadband
Client Server
Voice Recognition
Telemedicine
Others:
Top Priorities for IT Investment - Technologies
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Cost Is Not The A Driver In Selecting Vendor
The prevailing trends in vendor selection is based upon vendor’s track record / past experience and application features along with relationship with the hospitals
Main Criteria in Selecting Vendor – Private Sector
123456789
Deployment speed
Ease of integration
Track record
Costs
Use of non-proprietary/open standards
Reputation for security and integrity inoperations
Brand or name
Relationship with the vendor
Other – Please specify
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Trends and Challenges in the Next 12 Months
1. Lack of qualified manpower to manage the IT systems / department in hospitals
2. Many hospitals do not associate adoption of HIT directly with improved revenues.
3. EHR and Wireless technologies were among the top 2 areas indicated by hospitals for future investments in the next 12 months.
4. End user compliance is the main challenge identified by Healthcare CIOs
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Centrally Delivered: Through retail outlets
Wal-Mart, Costco, Sam’s Club, Walgreens
– Genetic Screening
– Pharmacy Distribution
– “Doc-in-the-Box”, staffed with nurse practitioners
Specialized Delivery
– Comprehensive cancer/cardiovascular centers
– “Heart Transplants ‘R’ Us” (surgery centers)
– Complex diseases
Home Diagnostics/Monitoring systems:
– Drop blood onto your Blackberry or iPod, telecommunicated to central labs, real-time Dx/Px
– Home monitoring
– Self-monitoring through e-health platforms on patientslikeme.com, tudiabetes.com, healthline.com
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Digitized Health
Smart cards with electronic health records and sequenced DNA
Consumer driven personal health planning
– PHR
o Microsoft-HealthVault™
o Google Health
o WebMD
o Revolution Health
o WalMart, Dell, eClinicalWorks
Note: Costs of genome sequencing is now US $1,000 & a new App is being launched to view it on the iPhone
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Conclusion
Health IT is no longer a “nice to have.”. It is a strategic priority for hospitals to deliver safer, higher quality and more cost-effective care, thus enabling hospitals to stay competitive. Some hospitals executives surveyed see this as the time to invest in IT initiatives that will deliver direct and quantifiable savings to their organizations.
...hard times are opportune to invest in the future
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