Healthcare in India faces several challenges, including lack of access, low insurance penetration, and a growing burden of chronic diseases. At the same time, traditional business models are struggling to show an attractive ROI, except for a few large vendors. The infusion of technology, along with extensive infrastructure and process efficiency improvements, could help improve the accessibility and affordability of health care, according to experts who spoke about emerging trends in that sector at the Wharton Economic Forum. India 2020, held in Mumbai this month.
Despite its shortcomings, the Indian healthcare sector has a lot to offer on several fronts. A government-led effort to get healthcare providers to adopt electronic medical records is enabling artificial intelligence (AI) to extract information from patient data to provide better treatment. The availability of telecommunications bandwidth enables the medical expertise to reach underserved rural markets through telemedicine and teleconsultation programs delivered via mobile phones.
The Indian government’s ‘Make in India’ initiative is boosting domestic production of medical devices and helping to lower the prices patients pay for products such as stents and implants, which were imported in the past. At the same time, the political environment and regulators in India must adapt to technological interventions, such as the growth of online pharmacies, with the necessary controls, the panelists said. Innovation in healthcare in India could serve as a global model for a shift from treating the sick to preventive care and wellness, given the size of underserved populations, they said.
Health care has the potential to drive economic growth and jobs, but it is also a critical sector in terms of “protecting the health and wealth of the nation,” said Sangita Reddy, deputy director of Apollo Hospitals, a chain of companies. of health care institutions. and President of the Federation of Chambers of Commerce and Industries of India.
Healthcare offers the opportunity to find ways to make health services “more understandable, affordable and accessible,” said Gaurav Agarwal, co-founder and chief technology officer of 1mg, an online pharmacy and digital healthcare platform. The three-year-old company, based in Gurugram in Northwest India’s Haryana state, has already received 85 million customer visits a year to its platform, enabling patients to not only buy medicine, but also make reservations for laboratory tests or medical consultations. .
Healthcare in India is becoming increasingly attractive to investors, with technological innovations helping to penetrate second- and third-tier markets, said Puncham Mukim, managing director of Everstone Capital Advisors in Mumbai. The company has investments in healthcare investment categories, including hospitals and medical device manufacturers, and has invested $ 400 million in recent years, he said.
Describing healthcare challenges in India, Reddy noted that across the entire supply chain, from primary care physicians to tertiary hospitals to government-run facilities, “everyone is working towards incremental access.” . At the same time, he said that the country has “high quality health care” and the private sector provides more than 76% of that care. She described that scenario as “islands of excellence in an ocean of insufficiency.”
“Care is shifting from hospital to clinic, clinic to home, and home to ubiquitous access to care 24 hours a day, 7 days a week, powered by the mobile phone.” -Sangita Reddy
A significant portion of the country’s population lacks health care, Reddy said. India has a doctor-to-patient ratio of 1: 10,189, about 10 times lower than the 1: 1000 recommended by the World Health Organization, according to a report from the Center for the Dynamics, Economics and Policy of Disease, Washington, DC- based research organization. The country’s doctor-patient ratio should increase as the number of doctors doubled; India needs three times as many nurses and five times as many paramedics as it does now, she said.
While these challenges are daunting, they present “an incredible opportunity to disrupt traditional models of healthcare,” Reddy continued. She called for a shift from what was traditionally “sick care” to wellness, saying it offers opportunities “to turn the health paradigm around and focus on prevention.” A two-pronged approach: “growing the [healthcare] infrastructure, improving methodology, efficiency and the way we do things; and reducing the burden of disease ”will address supply-side constraints, she said. “If we do these things together, we may not only help solve India’s health problems, but we will also show a model to the world.”
Agarwal noted that India has a chronic disease burden or a non-communicable disease burden of nearly 20% of the population, where nearly 200 million people are chronically ill. Of these, diabetes and hypertension alone affect about 100 million people, and that patient population is growing at a rate of 13% a year, she said. To make matters worse, the percentage of patients who adhere to prescribed treatments is abnormally low, she added.
According to an article from the Indian Institute of Medical Sciences, drug non-compliance by patients ranges from 24% for heart patients to 50% to 80% for hypertensive patients. The reasons include complex drug regimens, depleted drug supplies and drug side effects, she noted.
At the Technological Altar
Agarwal saw the technology as the need to address some of the shortcomings and listed a few. “Unlike the West, which has become this huge healthcare-driven healthcare ecosystem, India has a consumer-driven healthcare ecosystem,” he said. “When you go to a hospital, you see patients walking around with their files. Insurance penetration in India is 15%. There is no outpatient insurance, which means that when you see a doctor for your daily needs, there is no insurance of any kind available. So from a cost improvement standpoint, both the payer and the patient are incredibly motivated to figure out how to lower their monthly healthcare costs. ”
At the same time, the patient in India owns the health data – which Agarwal found “extremely fascinating” – it turned out to be the seed of the idea behind the establishment of his 1 Mg online pharmacy. “In the United States, my medical records were digital, but no one had access to that data,” he said, recalling his decade-long stint as an engineer in the San Francisco Bay Area. “But in India, we own our data and we think it’s actually pretty cool that people have access to that data.” Such a data-rich country could provide an opportunity to do groundbreaking work on disease progression models and the like, and share it with the rest of the world, he added. “Health care is geared towards the consumer. India will drive that revolution. ”
In September 2018, India launched its National Health Protection Mission called “Ayushman Bharat Yojana” with the aim of providing 100 million poor and vulnerable families (around 500 million beneficiaries) with health insurance of up to Rs. 500,000 each (approximately $ 7,150) for second and third line hospitalization. “From a large swathe of population that was hitherto untreated and undiagnosed, Ayushman Bharat [provides] large swathes of the population the opportunity to get diagnosed,” said Mukim.
However, Mukim noted that there is insufficient capacity in primary and secondary healthcare even in Tier 1 markets, or those with populations of 1,000,000 or more, which are typically major metropolitan cities like Mumbai or Chennai (Tier 2 and Level 3 are governed by smaller and smaller populations). Most of the existing healthcare facilities are in those markets and are also attracting the majority of new capacity investments, she added. However, some pockets realize the need. Hyderabad and Chennai, for example, are no longer “low,” he noted.
A major obstacle to expanding access to healthcare is the mismatch between the capital cost of building hospitals and their ability to generate sufficient returns for investors, Mukim said. Also, approvals and permits to build hospitals take “a long time,” she added. The cost of setting up a hospital doesn’t differ much between markets, whether it’s level 1, 2 or 3, she noted. But patients’ ability to pay is declining from urban to semi-urban and rural markets “because everything is out of pocket” due to lack of insurance, she noted. “There needs to be some help on that [front] to lower the cost of configuring the capacity.”
Tech To Do List
According to Reddy, the first level of technology-driven productivity gains would come from efficiencies. Inventory management would be an important area of focus, as hospitals need to store tens of thousands of different items, she said. The second level is streamlining processes to improve accessibility for patients, she said. “Can they have the predictability of a date? Can you do some basic planning for doctors? Can you minimize the waiting time on arrival? “The application of his company, AskApollo, facilitates around 7,000 daily appointments and guarantees a waiting time for a doctor of up to 20 minutes, except in cases of emergency.
“Approximately 20% of the consultations on 1 Mg are made by an AI doctor. They are as accurate as a panel of six doctors. “- Gaurav Agarwal
The app helps bring a “layer of efficiency across the spectrum,” for example, where housekeeping staff can change rooms more quickly and the admissions desk knows which rooms are available at the touch of a button, Reddy said. Electronic medical records help physicians manage and transfer data about patients. The next layer is establishing care protocols for hospital processes, he said. With such protocols, “for example, the newest Apollo doctor can work with the efficiency of someone with 20 years of experience,” he explained.
Subsequently, electronic medical records (EMRs) can improve service quality, among other things, Reddy noted. “Once you digitize [hospital processes], you can take the collected data, view the results, and create AI models that can be applied across the ecosystem,” he said.
The three Bs of Healthcare
Reddy identified “three Bs” that are changing healthcare. The first is “biology,” where technology can help reduce the cost of genetic testing and enable new business models around targeted treatments, precision medicine and preventive care, he said. Your second ‘B’ refers to ‘bytes’ or the steady decline in computing costs, driven by Moore’s Law (the number of transistors in a microchip doubles every two years, while computing costs drop half during that period). The third front is “bandwidth” in digital communications, which together with India’s increasing teledensity could increase access to healthcare in rural India. It could facilitate tele-supervised surgery, tele-education, telemedicine, and video consultations with physicians. The technology has also contributed to efficiency in areas such as computed tomography (CT), such as better images and faster diagnosis, she said.
Thanks to technology, other changes are also taking place. “I see care moving from hospital to clinic, clinic to home, and from home 24 hours a day, 7 days a week, ubiquitous access to care, powered by the cell phone,” he said. Reddy.
Agarwal had his own story of technological warfare in which he helped 1 Mg overcome the first setback. As an online pharmacy, the company operated in a two-sided market with patients ordering drugs on one side and pharmacies dispensing drugs on the other. Aside from the major retail chains, pharmacies had digitized their operations, which meant they had little data.
Agarwal had his own story of technological warfare in which he helped 1 Mg overcome the first setback. As an online pharmacy, the company operated in a two-sided market with patients ordering drugs on one side and pharmacies dispensing drugs on the other. Aside from major retail chains, pharmacies had digitized their operations, meaning they had little data on the drugs they were transporting. India is a brand-name generic drug market with 80-100 brands “for every drug discovered,” which translated into 1Mg monthly demand on the platform for up to 25,000 unique drugs per month, Agarwal said. “An average pharmacy only has 3,000 of those [25,000 drugs] in stock, and they didn’t know what 3,000 they had in stock,” he added. “They knew the top 100, but they didn’t know anything after that.”
An artificial intelligence-based predictive inventory model that developed 1 Mg found a way out of its frustrating experience of trying to match consumer demand with pharmacy supplies. The model worked on two simple assumptions, but it worked well for 1 Mg. He guessed that if a pharmacy did actually dispense a particular drug in one week, it would probably do so in the next. Likewise, he assumed that if a pharmacy did not deliver a particular drug in one week, it was unlikely to sell it the next week. “That was the first use of artificial intelligence and machine learning in our system, where we actually achieved fulfillment rates of 75% to 85%, based on zero inventory accuracy from our suppliers,” said Agarwal.
When 1 Mg later added diagnostic testing services to its offering, it once again took advantage of technology in the form of a mobile app that allowed patients to make reservations online. Phlebotomists who use it to collect blood samples follow a specific protocol and use barcode labels with patient identification information that they stick on the collection bottles. Telemedicine is another 1mg technology-driven quest, and it’s producing nearly 5,000 a day, Agarwal said.
The company also built an artificial intelligence model for medical practices. The AI doctor presents a diagnosis and treatment plan that does not share 1mg with the patient. Instead, he shares it with a real doctor, who then validates or invalidates it. “About 20% of the 1 Mg consultations are made by an AI doctor,” says Agarwal. “They are as accurate as a panel of six physicians with varying levels of experience in [a particular field].”
The unique characteristics of Indian healthcare require customization. For example, handwritten prescriptions are common, and 1 Mg uses an artificial intelligence machine to decipher about half of that data, leaving it ready for further analysis. “Much of the healthcare technology in India was actually only in the west,” Agarwal said. “The challenge is that the ecosystem in India is very different. Now we are starting to see healthcare technology that is very focused on India.
“The [Government of India] ‘Make in India’ campaign has really worked for medical devices.” -Puncham Mukim
Despite the technological innovations of online pharmacies like 1Mg, they have been frowned upon by regulators and Indian courts, spurred on by public interest litigants. The latest hurdle came last November from the Indian drug controller, which issued an order to stop selling drugs online until regulations were put in place. “Every three days, complaints are filed against online retailers who say they sell drugs without a prescription and should be discontinued,” says Mukim. The reality is very different, he argued. “If you go into a traditional pharmacy in India, you could probably get an OTC drug 50% of the time. [However], if you try to shop at the larger online pharmacies, there is a 0.01% chance that you can get drugs without a prescription People who break the rules create a nuisance for those who follow the rules, and the cost of following the rules is very high There must be a policy framework [to regulate online pharmacies]; we have been waiting a long time ” .
Mukim fought for India’s emerging online pharmaceutical retail business, saying that he has achieved market penetration in three to four years that traditional pharmacies have not. “[Online pharmacies] have gone deep into the Tier 2 and Tier 3 markets,” he said. “The availability of medicines has been a big problem in rural areas of India and they have solved that problem.”
In other parts of the healthcare sector, regulators appear to be right. Three years ago, India’s drug regulator carried out price controls on coronary stents, slashing prices by around 85% (it has cushioned marginal increases since then). “The cost of manufacturing a drug-eluting stent is Rs 6,000 to 7,000 ($ 85 to $ 100), but it was sold for Rs 150,000 ($ 2,140) in India,” Mukim said. In commercial channels and “clinics that have been hand in hand with them to increase the cost for patients.” The maximum stent price has given a huge boost to domestic stent manufacturers, and they are now supplying their products to various multinational companies as well. he added.
Mukim noted that India’s lower prices for healthcare compared to developed countries have made it attractive to international patients, especially those from the Middle East and Southeast Asia.
Investors like Mukim appreciate the disruptive effect of price caps on stents and are seeing the first signs that that mindset is spreading elsewhere in healthcare. Domestic stent manufacturers have begun supplying Tier 2 and Tier 3 markets that have hitherto been overlooked, he noted. More catheterization capacity is being added to the industry as lower prices have fueled a business boom for diagnostic services, he added. In addition, increasingly advanced technology in drug-eluting implants and stents is beginning to arrive in India, and foreign manufacturers of such devices are looking to establish capacity in India, he added. “The [Government of India] ‘Make in India’ campaign has really worked for medical devices.” He submitted a request to regulators to adjust the structure of import duties for high-quality medical equipment in particular.
Normative and policy guidance
Data privacy is the next frontier for Indian healthcare providers to prepare for. Data privacy in healthcare is covered by the General Data Protection Regulation (GDPR) in the European Union, which came into effect in May 2018, and under so-called HIPAA rules in the US Agarwal said that India needs data privacy rules, “but not at the level of, say, HIPAA or GDPR.” He suggested “something much more reasonable and that takes into account the growing needs of the country.”
Reddy said, “An appropriate level of data privacy [regulation] is not only good for healthcare companies, it is also good for the country and is essential.” Ideally, data privacy regulations should also recognize the benefits that analytics can bring. Reddy called for a focus on “data capture standardization,” to avoid information being siled between different organizations. “That lack of standards will prevent us from collecting our data and building new predictive models,” he said.