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How Can Healthcare Companies Harness The Burgeoning Digital Health Ecosystem In Asia?

According to a new report from global management consulting firm McKinsey & Company, Asia is exploding as a consumer-friendly digital health ecosystem that enables innovative products and services. The final recommendation is guiding incumbent and new healthcare players on how they are supposed to engage in the orchestration or participation of those health eco-systems.

Asian digital health ecosystems combine three critical elements to provide care: a network of healthcare service providers across settings and locations; a smart system that leverages behavioral, social, and health data; and a connectivity framework that allows data and insights to flow between stakeholders within the ecosystem.

How Can Healthcare Companies Harness The Burgeoning Digital Health Ecosystem In Asia?

The physical and digital health ecosystems are intertwined, thus making them hybrid ecosystems. There is no single entity in charge of these ecosystems, as they contain a single operator that anchors various business models around a central orchestrator.

How Can Healthcare Companies Harness The Burgeoning Digital Health Ecosystem In Asia?

These digital health ecosystems can be summarized into four archetypes according to the McKinsey report:

  • Primary care should be more accessible: Companies like Ping An Good Doctor, AliHealth, Practo, and Halodoc offer telemedicine and e-pharmacy services.
  • The Singapore Health Promotion Board’s Healthy 365 program, AIA’s Vitality program, and Prudential’s Pulse program use digital technologies to encourage consumers to monitor their health.
  • Building “digital front doors”, like the HealthHub app in Singapore and the internet hospitals in China, to speed up access to acute care.
  • Monitoring and managing chronic diseases: Offered by China’s Medlinker and ClouDr platforms.

Among the lessons McKinsey emphasized for orchestrators as they seek to capitalize on the evolving digital healthcare landscape in the region:

  1. In order to build a successful ecosystem, stakeholders within health systems must align their interests and connect with one another; identifying the pain points of each party is crucial.
  2. In order to achieve the best outcomes, a digital ecosystem requires the integration of both online and offline resources. So, a digital ecosystem is not a purely online approach.
  3. Creating a sustainable business model requires the definition of at least three functions – generating flows, converting transactions, and generating profits.

The following questions need to be asked by orchestrators so they can realize the value of a digital health ecosystem, according to McKinsey:

  • In what way does a company gain an advantage?
  • What capabilities should be developed and what strategic partnerships should be formed?
  • What capabilities should be developed and what strategic partnerships should be formed?
  • How long do you plan to invest and how risky do you want to become?
  • Interaction between stakeholders and government priorities in healthcare?

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GROWING TREND

Developing digital health markets in Asia are expected to reach $100 billion by 2025, according to McKinsey research. Five factors account for its growth, according to the report:

  1. In Asia, there will be around 456 million seniors, accounting for around a tenth of the population, within the next four years, who will boost health service demand.
  2. Some Asian countries will be adversely affected by a projected shortage of nine million nurses worldwide. In Asia, doctors attend to about 1,000 fewer people than average compared to countries in the OECD.
  3. Health and wellness are becoming more of a priority for consumers, as evidenced by higher healthcare spending. Research by McKinsey shows that half of the Chinese consumers are spending more on health and nearly a quarter on nutrition over the last year.
  4. As the world’s dominant healthcare payers, Asian governments spent 64% of all health expenditures just last year. While they spend about 4.5% of GDP on healthcare, the burden is growing.
  5. Approximately half of all internet users in the world reside in Asia due to technological innovation. A total of $14 billion is invested overseas in digital health venture capital or private equity in Asia.
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