Exploring Healthcare Innovation in APAC and LATAM
No healthcare system in the world is perfect. What do you know about Asia and Latin America?
When I tell people that Faces of digital health explores the diversity of healthcare systems and technology adoption globally, they often ask me: “Which healthcare system would you say is the best in the world?” And I reply that that’s an impossible question.
It’s an appealing question though, and we commonly see rankings of healthcare systems based on different sets of criteria: price, affordability, accessibility, etc.
For the expatriate group, the number 1 healthcare system in 2022 was South Korea, followed by Taiwan. The Legatum Institute, a London-based think tank, put Singapore and Japan to the first two spots, followed by South Korea in 2023. Some rankings include European countries, others exclude them, and African or South American countries are never on these lists.
Why am I saying the question is impossible? Because how good we will perceive a system to be depends on cultural values and history. Those are the determinants of the structure of the system and its potential changes. (But if Taiwan or South Korea caught your attention, we’ve got you covered! In the past episodes, Professor Yu Chuan Jack Li is Editor-in-Chief for BMJ Health & Care Informatics journal, explained how Taiwan managed to transition from Stage 6 to Stage 7 as a nation in 2019 under the HIMSS Analytics Electronic Medical Record Adoption Model (EMRAM), and Mira Kang talked about the low costs of healthcare services in South Korea and why healthcare providers are hesitant around telemedicine.)
Healthcare system diversity
Let’s return to the question of why healthcare system assessment depends on national values. The US has a painstaking healthcare expenditure. Roughly 20% of the GDP goes to healthcare, or as you may have heard, it’s a $4.3 billion business. There is a considerable surge of interest to invest from venture capitalists and hospitals, which foster internal innovation and then support spinoff companies when ideas mature into products. This is quite a contrast to for example Norway, where a known term in the digital health space is “the pilot illness”. It refers to the problem of the ecosystem being very supportive towards pilot projects but making it very difficult to deploy healthcare solutions on a larger scale (Listen to Svein Willassen explain below).
In the US, if you are wealthy enough, you’ll be able to afford care. Unlike in most European countries, you can opt out of health insurance. And paradoxically, even if you do have health insurance in the US, that does not guarantee you won’t go bankrupt because of healthcare costs.
With a business mindset and a fee-for-service model, could you possibly imagine the US system changing to the UK’s NHS model, where healthcare is tax-funded, and clinicians are public servants?
Digitally slow Germany and fast Finland
In my discussions, the Germans have said that Germany has the best analog (!) healthcare system in the world. The quality is great, but the digital transformation is happening too slowly. Germany introduced a new digitalization strategy in 2023, to increase the adoption of e-prescriptions and electronic health records, which were in May 2023 used by 1% of the population.
Finland is on the other side of the spectrum. It has achieved great success in digital transformation, as demonstrated by its top ranking in the EU's Digital Economy and Society Index (DESI) which summarises indicators on Europe’s digital performance and tracks the progress of EU countries.
Since the 1960s, Finland has stored data in various registers with accompanying legislation and oversight by public authorities. This has enabled the provision of digital services and significantly improved the daily life of citizens says Päivi Sillanaukee, Special Envoy for Health and Wellbeing at the Ministry for Social Affairs and Health, who for years worked as the Ambassador for Health at the Ministry of Foreign Affairs. Trust in digitalization, which has been built in the past in Finland has led to increased demands for digitized health services and the establishment of a registration system for the secondary use of data.
How about Asia and Latin America?
In the recent series of discussions about APAC and Latin America, speakers painted a stark contrast between the two continents.
Talent and great connectivity in the APAC
The common thing mentioned for APAC is the stellar connectivity in Asia, even in remote areas. This prompted Beth Ann-Lopez to start Docosan in Vietnam - a company aimed to increase access to clinicians and at-home diagnostics. Many people pay for healthcare out of pocket, which impacts innovation. “A very small proportion of people have private health insurance. The vast majority of private health transactions are out of pocket. This creates interesting incentives in the private sector. Providers are willing to offer their prices because they know that most patients are price sensitive because they’re paying out of their own pockets. You don't have insurers as the major payers negotiating rates behind closed doors which would drive prices up for uninsured people,” says Beth Ann Lopez.
Vietnam, Thailand, and South Korea all pride themselves on a large proportion of the population aged between 15-64 years old. As mentioned by Beth Ann-Lopez, there’s a lot of highly educated talent in the region, making growing a company here a good opportunity.
Telemedicine hesitancy in South Korea
South Korea is highly technologically advanced, yet hesitates from a broader introduction of telemedicine. Mira Kang, Vice Chief Medical Information Officer at the Samsung Medical Center in South Korea explains that healthcare in South Korea is accessible - 2 to 4 miles (roughly 3-6.5 km) in big cities and within 12 miles (20 km) even in rural areas. Healthcare is affordable: the cost for primary care is only 10 dollars per visit and the co-payment of a patient is 30% which should be 3 dollars. In the case of a tertiary general hospital, the cost is 30 dollars per visit, and the co-payment is 60% which should be 18 dollars.
So naturally: Physicians prefer in-person consultations rather than telemedicine because they worry about regulatory challenges and lack of reimbursement policies. Pharmacists have a concern that patients will flock to large pharmacy chains in the remote healthcare system and many of the small pharmacies will go out of business.
Data privacy regulation in China
The Chinese healthcare market is experiencing significant momentum from government policies, industry advancements, and big tech involvement. However, entering the Chinese digital health market as a foreign entity can be challenging due to strict data privacy laws and regulatory authorities. Also, if you think you have a unique service, get ready to be copied.
It is crucial for companies to focus on localization and understand China's policy structures in order to succeed, says Ruby Wang, former Head of Health for the UK Government in China at the British Embassy in Beijing; Adviser on Health Policy for the United Nations Resident Coordinator’s Office in China, who today works as a doctor in the NHS and a consultant to companies interested in entering the Chinese market.
If you do succeed in building, especially AI in China, data privacy restrictions make it hard for foreign entities to bring AI products out of China once they have been developed using local data. However, there is optimism for progress in this area as the government defines what counts as health data and products, says Ruby Wang.
LATAM
On the other side of the world, speakers mentioned companies can find opportunities to work with hospitals in Peru, but they won’t be able to do much with poor connectivity in Venezuela. Brace yourself for regional fragmentation in Argentina and think about what can you build for Mexico, which has great potential in terms of healthcare needs and internet users.
Poor Connectivity in Venezuela
Let’s start with the bad news. With its longstanding crisis, Venezuela is likely not the market many companies will consider entering. Connectivity and internet price are huge barriers to success, says Luis Santiago - CEO of Pegasi MED, an oncology management software provider, who used to be the main EHR provider for Venezuela. “In 2021, we gave our cancer platform for free for the Venezuelans Anti-Cancer Society to use in their facilities. But they didn't have good internet access. Venezuela still depends on the national telecommunications company to provide internet because private internet is quite expensive, and can cost 400 to 1000 dollars per month. Charitable organizations don't have that kind of budget. And even if you pay for a private vendor, the internet is super lagging. What would take 30 seconds in Chile, can take 5 to 6 minutes in Venezuela.”
A Lively Ecosystem in Chile
A few years ago, PEGASI moved to Chile. In Chile, the legislation and rules around the types of services hospitals can procure are changing fast, says Luis Santiago. Pegasi is storing the data of Chileans in the cloud, which the Ministry of Health gave permission for in 2023. But this took a while to get - they waited for 2 years.
With the fast technological advancement, healthcare can sometimes get caught up in legislation challenges. For startups, many collaborations happened during the pandemic, but have hit regulatory walls after.
Most institutions in the public healthcare sector have implemented teleconsultation services from local providers in the region. Hospitals are also fortifying their IT departments by hiring more people.
Potential of Mexico
Mexico has approximately 120 million people, and is the second largest country in the LATAM region, after Brazil. The public healthcare system in Mexico is fragmented, leading many people to seek care privately and pay out-of-pocket.
Mexico has a predominantly public healthcare system, with workforce shortages - only 2.4 doctors per 1000 people, which is heavily below the OECD average.
In situations like these, the government is often focusing on closing the gap between people accessing basic care, rather than investing in tech infrastructure, says Rafael Lopez, CEO of Diagnostikare. The universal standards for healthcare records data exchange between public institutions still need to be defined, and many people utilize a certain level of private care, further fragmenting patient data storage.
The majority of health-related apps fall within the pharmaceuticals or pharmacy retail space, says Rafael Lopez. “Over half of internet users in Mexico, which account for over a hundred million people, claim to be familiar somehow with any sort of digital health services. Yet 15% have actually used these services. And although there is at least anything between 500 to 1000 digital health applications that you would consider as being available for the Mexican population, the majority of these applications fall within the pharmaceuticals or pharmacy retail pharmacy space or e-commerce platform.”
That’s why Diagnostikare started developing virtual primary care services. The company focuses on prevention and care through a personalized approach. Today their service is available to 200,000 people, with the company providing between 1000-3000 visits weekly, which are a mix of prevention, mental health services, and nutritionist pediatrics support. The next country they plan on expanding to is Argentina.
Market Fragmentation in Argentina
One of the strengths of Argentina's healthcare system is its long-standing tradition of providing free medical education in public universities. This has resulted in a high concentration of physicians in the country, making Argentina one of the leading nations in terms of healthcare professionals in Latin America. Like many countries, Argentina faces challenges in ensuring equitable access to healthcare services, particularly in remote and underserved areas.
Technology and telemedicine are seen as promising solutions to bridge this gap. However, due to regional fragmentation, and region-based rules, scaling across the country can prove to be challenging. “In our health system, we don't have such a thing as a federal health system. We have a decentralized health system and more than 20 provinces have the right to do their own regulations and their own executions. So basically you have to spend a lot of money for local implementations,” says Santiago Troncar, the founder of Future Docs Latin America,
The latter is not an isolated problem. Even Finland, which is mentioned here as one of the great examples of digital maturity, has challenges with scaling solutions. As mentioned by Päivi Sillanaukee, this is the one thing we could improve on in healthcare internationally: how can we take the best practices and solutions that work and scale them, instead of consistently bumping into reinventing the wheel?
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