Hospital Build Asia - Healthcare IT Outlook 2010

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  • Global: Pharmaceuticals/biotech comprises 70% of market with lowest growth rate LS/Health IT with highest growth rate (2010) APAC Medical Imaging at 36% of global market Pharma at 25% of global market. LS/HIT only 8% of global market 2009- apac is 23% 2010- 24% 2012 2010- pharma – 25% of global market 2012- 29% Devices- 24% of global market 26% Imaging- 32% 36% LS/HT is 8% of global market 9.4% Diagnostics 18% 19%
  • Global: Pharmaceuticals/biotech comprises 70% of market with lowest growth rate LS/Health IT with highest growth rate (2010) APAC Medical Imaging at 36% of global market Pharma at 25% of global market. LS/HIT only 8% of global market 2009- apac is 23% 2010- 24% 2012 2010- pharma – 25% of global market 2012- 29% Devices- 24% of global market 26% Imaging- 32% 36% LS/HT is 8% of global market 9.4% Diagnostics 18% 19%
  • Global: Pharmaceuticals/biotech comprises 70% of market with lowest growth rate LS/Health IT with highest growth rate (2010) APAC Medical Imaging at 36% of global market Pharma at 25% of global market. LS/HIT only 8% of global market 2009- apac is 23% 2010- 24% 2012 2010- pharma – 25% of global market 2012- 29% Devices- 24% of global market 26% Imaging- 32% 36% LS/HT is 8% of global market 9.4% Diagnostics 18% 19%
  • Drivers 1) Operational Efficiency, Reducing Costs- Widespread adoption of Clinical Applications, EMR. Leading markets include Singapore, Australia, Taiwan, S.korea 2) Consumer Demand- Are more savvy, increased internet penetration- china largest users Strong demand for healthcare services- IT has come into the core role of “essential” services and maximise Challenges Interoperability- Most of cUS$tomers have disparate IT platforms. Integration- Connectivity issues between departments especially the pathology dept to obtain real time results Skilled Resources- CME programs need to being designed especially for allied staff who may not be IT savvy Take-Aways Hong Kong has US$$ 400 Mil budget for EMR implementation and Malaysia has launched..XX The human factor, is a key impediment in HIT adoption- Change Management Programs are extremely essential Hongkong and Malaysia are the two countries to watch out in terms of the new health initiatives during 2010-2012
  • Micro renewables
  • 65% say the annual budgets for running their departments will increase or stay the same in 2009 31% say their budgets will decrease. Of 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. CFOs/VPs Finance whose organizations are decreasing IT operating budgets expect applications, software and outsourced IT services to see the biggest cuts, followed by staff layoffs. 64% are delaying or reducing new projects. Outsourced IT services are the most common area targeted for cuts, according to CFOs/VPs Finance and CIOs and many also are looking at staffing reductions and decreased training and professional development to manage the operating budget constraints.
  • Hospital Build Asia - Healthcare IT Outlook 2010

    1. 1. For more information contact: Simranjit Singh Director Healthcare Practice APAC E-mail: simranjit.s@frost.com Mobile: 65 91473750 APAC Healthcare Information Technology Outlook
    2. 2. Setting the Scene Outlook for Healthcare Industry from 2010-12 Source: Frost & Sullilvan ,2010 ) Global Healthcare Market : 2009 <ul><li>US and Europe were impacted in a major way by global crisis </li></ul><ul><li>Asia also slowed down but not as much as the West </li></ul><ul><li>Valuations were low and M&A was high, many smaller Biotech companies struggled </li></ul><ul><li>Major organizational restructuring occurred, along with portfolios being reassessed </li></ul>Global Healthcare Market : 2010-12 <ul><li>Recovery of the markets to a large extent with strong growth in Asia </li></ul><ul><li>Start of major patent expiries </li></ul><ul><li>M&A activity down in the West but could be important in Asia, restructuring will continue </li></ul><ul><li>Asia becoming increasingly important as a market and outsourcing hub </li></ul><ul><li>4Ps to drive market: Preventive, Personalized, Predictive & Personal Responsibility </li></ul>
    3. 3. Global vs. APAC: The New Frontier By 2012 APAC expected to be close to 27% of global market Source: Frost & Sullilvan ,2010 ) 23.9% 27.2% 23.2% 26.4% CAGR 12.2% CAGR 6.47% <ul><li>By 2015 APAC could represent ~40% of global market! </li></ul>Source: Frost & Sullivan Rest of the World APAC Global & APAC Healthcare Revenues US$ Bn, 2009-2012
    4. 4. Asia is however transitioning Moving toward a Multi–Polar World Order Source: Frost & Sullilvan ,2010 ) Asia Pacific Market : 2009 <ul><li>Slowing down of GDP in mature markets – Japan and Australia took a big hit </li></ul><ul><li>Global consolidation left a difficult mess for integration on a local level – job losses and portfolio realignment </li></ul><ul><li>Price cutting and playing the margins game </li></ul><ul><li>The slow down for Medical Tourism </li></ul><ul><li>Asia started to set up infrastructure for offshoring and outsourcing for US/EU companies </li></ul>Asia Pacific Market : 2012 <ul><li>A shift in the center of the world economically and strategically to Asia </li></ul><ul><li>Asia to move from export led development to consumption led growth </li></ul><ul><li>APAC the fastest growing pharma market and API production hub </li></ul><ul><li>Increased government attention to primary and community based healthcare . </li></ul><ul><li>Focus on building infrastructure and education: government role will be higher </li></ul><ul><li>Increased use of mobile technology in healthcare service delivery </li></ul>
    5. 5. Key Healthcare Facts 1.0% - 0.1% 1.6% 0.7% Population growth 9 2,200 3.4 8.3 10.4% US$ 3328 US$ 381.5 B 20.3% 82.4 million Germany 5,794 13,896 18,396 # hospitals (>county) 7.1 5-7 10.9 Avg. length of stay (days) Medical Industry Health expenditure 2.6 0.6 1.4 # Doctors/1000 people 3.2 0.7 2.2 # beds/1000 people US$ 2,181.8 B US$ 59.3 B US$ 198 B Health expenditure US$ 6714 US$ 109 US$ 342 Per capita 15.3% 4.9 % 4.5 % % of GDP 12.8% 5.3% 8.1% % aged 65+ 307.2 million 1.16 billion 1.33 billion Demography Population US India China
    6. 6. Basic Hospital Overview County Hospitals Level II Rural Clinics Mid-level general hospitals Small hospitals providing primary care Single doctor operations Urban Township Hospitals Community Hospitals Community Health Centers / Clinics High-level general and specialty hospitals Rural Level III Level I Levels III, II & I Level III (A) – 500 beds plus Level II (B) – 100 – 499 beds Level I – less than 100 beds
    7. 7. 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
    8. 8. Note: 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 Market Drivers Market Restraints <ul><li>Operational efficiency </li></ul><ul><li>Strong and sustained demand for healthcare services </li></ul><ul><li>Demand for higher quality of healthcare and access to information </li></ul><ul><li>Interoperability of discrete medical equipment </li></ul><ul><li>Bandwidth </li></ul><ul><li>Lack of skilled resources for implementation </li></ul>CAGR 7% CAGR 11.3% APAC Share 50.6 54.6 58.4 62.5 14.5% 15.7% Lifesciences & Healthcare IT, US$ Bn, 2009-2012
    9. 9. Clinical Information Systems Hospital Administrative Systems ERP, SCM Systems Health Interoperability Solutions EMR/PHR Top Growth Opportunities : APAC Life sciences and Health IT Market <ul><li>APAC market 2010 : ~US$ 220 mn; CAGR ~9.5% </li></ul><ul><li>Rise in international patients will drive use of CPOE, PAS, BI, etc </li></ul><ul><ul><ul><ul><li>APAC market 2010 : ~US$ 1 bn+; CAGR ~5% </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Demand from new hospitals, clinics, specialty centers </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Pharma companies, demand arises from integrating drug distribution & clinical trials </li></ul></ul></ul></ul><ul><li>APAC market 2010 : ~US$ 310 mn; CAGR ~3.5% </li></ul><ul><ul><ul><ul><li>Government eHealth programs such as Healthelink in Australia, Intelligent Nation 2015 (iN2015), by the Ministry of Health in Singapore </li></ul></ul></ul></ul><ul><li>APAC market 2010 : ~ US$ 670 mn; CAGR ~9%. </li></ul><ul><li>Investment will be made into sophisticated clinical systems based on specialties </li></ul><ul><ul><ul><ul><li>APAC market 2010 : ~US$ 440 mn; CAGR ~7% </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Large scale national initiatives announced by Singapore, Australia, Hong Kong and Japan </li></ul></ul></ul></ul>ERP : Enterprise Resource Planning SCM : Supply Chain Management Source: Frost & Sullivan. <ul><li>0 </li></ul><ul><li>0 </li></ul><ul><li>0 </li></ul>
    10. 10. Frost & Sullivan Healthcare CIO Survey <ul><li>Conducted in February – March 2009 </li></ul><ul><li>Countries: Malaysia, India, China, and Thailand </li></ul><ul><li>Respondents: CIOs, CFOs/VP Finance of 40 Leading Hospitals </li></ul>
    11. 11. Tighter Access To Capital Is Affecting HIT Projects <ul><li>74% CFOs/VPs Finance are delaying or lengthening development of new facilities, facility renovations and health IT initiatives. </li></ul><ul><li>33% reported cutting department budgets, </li></ul><ul><li>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 </li></ul>
    12. 12. 2009 Trends in HIT Spending: APAC vs US <ul><li>Most APAC tertiary care hospitals have seen a surprising increase of up to 10% in the IT budget for 2009. </li></ul><ul><li>Contrary to APAC, US hospitals declared up to 50% budget decrease in IT spending. </li></ul><ul><li>China remains the only country where hospitals have not cut budgets with majority having an increase of 20%. </li></ul>
    13. 13. 2009 Operating Budgets Targets: APAC vs US <ul><li>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% </li></ul><ul><li>65% of CFOs & CIOs advised that the annual budgets for running their departments will increase or stay the same in 2009 . </li></ul><ul><li>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. </li></ul>
    14. 14. Human Factor Play Major Role in HIT Adoption
    15. 15. Interoperability and Patient Safety are to Drive HIT Investments in the next 5 years
    16. 16. 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.
    17. 17. 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.
    18. 18. 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
    19. 19. Trends and Challenges in the Next 12 Months <ul><li>Lack of qualified manpower to manage the IT systems / department in hospitals </li></ul><ul><li>Many hospitals do not associate adoption of HIT directly with improved revenues. </li></ul><ul><li>EHR and Wireless technologies were among the top 2 areas indicated by hospitals for future investments in the next 12 months. </li></ul><ul><li>End user compliance is the main challenge identified by Healthcare CIOs </li></ul>
    20. 20. <ul><li>Centrally Delivered: Through retail outlets </li></ul><ul><li>Wal-Mart, Costco, Sam’s Club, Walgreens </li></ul><ul><ul><li>Genetic Screening </li></ul></ul><ul><ul><li>Pharmacy Distribution </li></ul></ul><ul><ul><li>“ Doc-in-the-Box”, staffed with nurse practitioners </li></ul></ul><ul><li>Specialized  Delivery </li></ul><ul><ul><li>Comprehensive cancer/cardiovascular  centers </li></ul></ul><ul><ul><li>“ Heart Transplants ‘R’ Us” (surgery centers) </li></ul></ul><ul><ul><li>Complex diseases </li></ul></ul><ul><li>Home Diagnostics/Monitoring  systems:   </li></ul><ul><ul><li>Drop blood onto your Blackberry or iPod, telecommunicated to central labs, real-time  Dx/Px </li></ul></ul><ul><ul><li>Home monitoring </li></ul></ul><ul><ul><li>Self-monitoring through e-health platforms on patientslikeme.com, tudiabetes.com, healthline.com </li></ul></ul>
    21. 21. Digitized Health <ul><li>Smart cards with electronic health records and sequenced DNA </li></ul><ul><li>Consumer driven personal health planning </li></ul><ul><ul><li>PHR   </li></ul></ul><ul><ul><ul><li>Microsoft-HealthVault™ </li></ul></ul></ul><ul><ul><ul><li>Google  Health </li></ul></ul></ul><ul><ul><ul><li>WebMD </li></ul></ul></ul><ul><ul><ul><li>Revolution  Health </li></ul></ul></ul><ul><ul><ul><li>WalMart, Dell, eClinicalWorks </li></ul></ul></ul><ul><li>Note: Costs of genome sequencing is now US $1,000 & a new App is being launched to view it on the iPhone </li></ul>
    22. 22. 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
    23. 23. We Accelerate Growth Thank You

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