Future of the healthcare industry
New consumer needs, advances in technology, ageing populations and the pandemic are changing the healthcare industry. Traditionally, healthcare was segmented, but that reality is increasingly giving way to interconnected healthcare systems led by partnerships. In this latest Business Insights article, Dr Eugene Hong, Executive Director, Group Head for the Healthcare and Pharmaceuticals Group, DBS, discusses the emerging ecosystem in an industry driven by technological changes.
In the past, traditional healthcare delivery involved clearly defined roles between regulators, pharmaceutical companies, financiers (such as banks and insurance companies) and the enablers such as doctors and healthcare practitioners. These industry boundaries, where each stakeholder had a distinct role to play, are blurring and have been dismantled in some cases. Says Dr Hong, “Things are changing very rapidly with new consumer needs, ageing populations and regulatory changes. Healthcare consumers want more transparency in the services they are receiving.”
With the Covid-19 pandemic evolving and a cause for concern globally, a new healthcare ecosystem has emerged. The industry has had to move quickly to bring innovations to market at speed; these include test kits, vaccination roll-outs and even a Covid-19 mortality risk calculator, to name a few.
What does this mean for industry participants?
Technology is a huge enabler of this change. “We’ve got digital technology and AI transforming healthcare business models,” says Dr Hong. “All your players are going to be playing more than one role.”
For the healthcare industry, the rise of such an ecosystem translates into concrete outcomes. Here we look at three key trends unfolding.
Partnerships are forming the new ecosystem
In 2019, Apple teamed up with health insurance giant Aetna to create an app called Attain that can run on the iPhone and Apple Watch1. Attain is meant to encourage people to develop healthy behaviours, such as exercising more regularly. The app can also remind users to take their medication on time or to get their annual flu shot. According to Dr Hong, such partnerships between a tech giant and an insurance company in the health space are a sign of the churn in the healthcare industry and will become increasingly common moving forward.
Closer to home, Singapore’s Health Promotion Board and Apple have announced their partnership on a two-year health initiative known as LumiHealth, a personalised programme to encourage healthy activity and behaviours using Apple Watch2. Much like the Attain app, LumiHealth aims to help Singaporeans adopt healthier lifestyles. Since the app’s launch in October 2020, there are more than 100,000 downloads3.
Increased demand for virtual and remote care
The Covid-19 pandemic ushered in the advent of telemedicine to unprecedented levels, and people are now finding great comfort in seeking medical advice online. Indeed, in certain situations, such as during lockdowns, this has become an absolute necessity; particularly in rural areas where access to medicine is limited. A case in point is Viettel Telehealth, a telemedicine programme by Vietnam’s biggest telco Viettel Telecom. The initiative is expected to particularly benefit people who live in rural Vietnam—some 70 per cent of the population. So far, Viettel has connected 600 remote medical examination and treatment points at medical facilities across the country, reaching 60 per cent of the target of the first phase4.
Singapore is one of the Asian countries with regulated telehealth guidelines—the city-state started a regulatory sandbox in 2018 to evaluate the risks. In February 2021, the Ministry of Health introduced a voluntary listing of direct telemedicine providers that have agreed to complete telemedicine e-training5.
Singapore also has the forthcoming Woodlands Health Campus, the first acute and community care hospital in Singapore. Dr Hong asserts that the concept behind the Woodlands hospital is that instead of building a huge hospital with more inpatient beds, the design thinking has shifted towards having care managed at home.
Such a hospital is purely because technology—such as wristbands—allows doctors to monitor the health of their patients remotely. This could include tracking vitals, medication times and remote rehabilitation sessions. The hospital will use robotics to manage logistics, housekeeping and tasks such as delivery of food.
“We are increasingly looking at out-of-hospital settings, and this is made possible by technology,” says Dr Hong.
Rise of genetic testing for personalised medicine
Breakthroughs in gene editing will likely see accelerated development of something known as “precision medicine”, which allows drugs to be customised specifically to a patient's genetic make-up. This form of medicine is still in its infancy. “Although it improves patient outcomes and reduces side effects, we must realise that some of these technologies will not come cheap until we have scale,” says Dr Hong.
Big pharma is buying into genetic testing through collaborations. In 2018, British drug maker GlaxoSmithKline Plc acquired a USD 300 million stake in genetic-testing company 23andMe Inc6. The drug company plans to tap into genetic data to better select patients for drug trials and create targeted therapies for patients.
Also bringing together tech and big pharma, in 2019 Novartis joined forces with Microsoft to apply AI across the Swiss pharmaceutical company’s value chain, from manufacturing to finance. Vas Narasimhan, the chief executive of Novartis, highlighted that AI holds promise in personalised medicine7, amongst other things. When the deal was announced, the companies said their initial focus would be on tackling personalised therapies for the eye disease macular degeneration; cell and gene therapy; and drug design8.
Such collaborations are the new faces of the industry; a result of a rapidly evolving healthcare ecosystem where each stakeholder will play more than one role, and technologies such as AI will drive targeted patient outcomes.
Unravelling and understanding the various opportunities in the new healthcare ecosystem calls for a trusted partner. With an extensive Asian network and insights on the region’s healthcare sector, DBS is well-placed to support the financing needs across the ecosystem from healthcare service providers to healthcare asset owners (REITs), medical devices, pharmaceuticals, Traditional Chinese Medicine (TCM) and healthcare distribution.