Digital Health in Denmark: A Leader in Policy and Infrastructure

Copenhagen Business School, June 28, 2018
Workshop Digital Health in Context
Presenters: Advisory Panel:
Till Winkler (CBS) Jørgen P. Bansler (KU/DI)
Abhay Mishra (Iowa State) Henriette Langstrup (KU/PubHealth)
Yu Tong (Zhejiang University) Andrej Savin (CBS/Law)
Juhee Kwon (KAIST) Karsten Vrangbæk (KU/PubHealth)

2
Global health/care
challenges
• Demographic
shifts
• Chronic
diseases
• Multimor-
bidities
Digital
opportunities
• Social
• Mobile
• Analytics
• Cloud
• IoT
• Big data
• Genomics
Motivation
How can digital
technology
help achieve
the triple aim
of lower cost,
higher quality
and better
access to
healthcare
services?

3
We are interested, specifically, in how policy frameworks
(understood broadly) can affect (i.e., facilitate or inhibit)
the widespread implementation of digital technology in the
healthcare sector (specifically for providers and citizen).
Focus of this research project

4
Are we comparing Apples and Eggs?

5
Current Research Landscape and Gaps
Large cross-national surveys
- OECD surveys
- EU/JRC surveys
- Currie Seddon 2014
Country comparisons
- Jha et al. 2008
Gap / sweet spot
Number
of
country
cases
Depth in terms of relationship
between policy and technology
Single country cases
- Aanestad & Jensen 2011
- Kierkegaard 2013/15

6
Healthcare system context
(funding, payers, actors)
Comparative Framework
Provider-
based
systems
National strategy
Digital
health
innovation
+ –
Drivers Inhibitors
Policy frameworks
Health information infrastructure

7
08:45 Words of Welcome (Finn Valentin)
09:00 Scandinavian perspective (Till Winkler)
09:30 U.S. perspective (Abhay Mishra)
10:00 Chinese Perspective (Yu Tong)
10:30 Panel discussion 1: Comparing across
11:00 South Korean perspective (Juhee Kwon)
11:30 German perspective (Till Winkler)
12:00 Panel discussion part 2: Moving forward
12:30 Lunch and open end
AGENDA

Workshop Digital Health in Context, June 28, Copenhagen Business School
The Scandinavian Perspective
The Case of Denmark – A Closer Look at the Digital Health Leader

10
Scandinavian countries have
• Cultural and political proximity
• Nordic welfare state model
• Universal health care
• Government-funded
• some private elements
We focus on the case of Denmark
as one representative of Scandinavia
Hofstede cultural dimensions:

11
A. Healthcare System
Provider-
based
systems
National strategy
Digital
health
innovation
Policy frameworks
+ –
Drivers Inhibitors

12
Health Expenditures by GDP: 10.6%
- 84% of which are public expenditures,
15.8% are private
Financing model: (Beveridge-inspired model)
- National health tax of 8 percent of taxable income
- Distributed to regions and municipalities
Private health insurance
- 38% of Danes have complementary voluntary
insurance (“Danmark”)*
- 26% have supplementary insurance (fringe
benefits, provided by 7 for-profit insurers)
The Danish Health system – Overview
* Does not exist in Norway and Sweden

13
Regions
- Supervising and paying
independent GPs
(primary care)
- Hospital services
(secondary care)
Municipalities
(tertiary care)
- Prevention
- Health promotion
- Long-term care
Regions govern hospitals and general practitioners (GPs),
Municipalities run tertiary healthcare services
Source: Vrangbaek 2015

14
Facilitating factors
• Relatively small population size
• Culture of trust in the public good
• Regional reform of 2005 (relative centralization)
• Personal identification number (CPR) since 1968
Challenges / inhibitors
• EHRs at the region level (relative decentralization)
• Interoperability across sectors (e.g., primary to
secondary care, secondary care to long-term care)
Facilitating and inhibiting factors
for digital health in Denmark
+
–

15
Facilitating factors
• Relatively small population size
• Culture of trust in the public good
• Regional reform of 2005 (relative centralization)
• Personal identification number (CPR) since 1968
Challenges / inhibitors
• EHRs at the region level (relative decentralization)
• Interoperability across sectors (e.g., primary to
secondary care, secondary care to long-term care)
Facilitating and inhibiting factors
for digital health in Denmark
+
–
Source: Digital Health Strategy 2018
(study by Trygfonden and Mandag Morgen)

16
Regions
Municipalities
Main Actors for eHealth in DK
Source: Vrangbaek 2015
Ministry of Health
- National Board on e-Health:
advises the minister of health
- National eHealth Authority:
responsible or developing
common frameworks and
standards within eHealth
Regions
Regional e-Health Organization
(RSI): coordinate implementation of
eHealth initiatives for the 5 regions
Municipalities
Local decision making as part of
municipal budgets and portfolios
MedCom
- Established 1994 as publicly funded,
non-profit organization to facilitate
cooperation
- Financed and owned by Ministry of
health, regions and municipalities

17
▲ 1977 Central national patient journal (= national health records)
▲ 1990 First efforts towards EDI standards for discharge
summaries, lab reports and prescriptions
▲ 1992 More than 60% of GPs have implemented EMRs
▲ 2003 E-prescription server and sundhed.dk started
▲ 2005 EDI becomes XML (gradually)
▲ 2006 National Board of eHealth (first Digital Health in Denmark)
▲ 2011 Close to 100% of EMR coverage
▲ 2014 Shared Medication Record (Faelles Medicinkort)
implemented
Milestones of Digital Health in Denmark
Source: Medcom 2014

18
B. Digital Health Strategy and Policy
Provider-
based
systems
National strategy
Digital
health
innovation
Policy frameworks

19
• 1996-97 Action plan for Electronic Health Records (EHR)
• 1999: National Strategy for Information Technology in Hospitals
• National Strategy for IT in the Danish Hospital System 2000-
2002
• National IT Strategy 2003-2007 for the Danish Health Care
Service
• National Strategy for Digitalisation of the Danish Healthcare
Service 2008-2012 – to promote public health as well as
prevention and treatment
• MAKING eHEALTH WORK – National Strategy for
Digitalisation of the Danish Healthcare Sector 2013-2017
• A Coherent and Trustworthy Health Network for All – Digital
Health Strategy 2018-2022
National Strategies for e-Health

20
• 1996-97 Action plan for Electronic Health Records (EHR)
• 1999: National Strategy for Information Technology in Hospitals
• National Strategy for IT in the Danish Hospital System 2000-
2002
• National IT Strategy 2003-2007 for the Danish Health Care
Service
• National Strategy for Digitalisation of the Danish Healthcare
Service 2008-2012 – to promote public health as well as
prevention and treatment
• MAKING eHEALTH WORK – National Strategy for
Digitalisation of the Danish Healthcare Sector 2013-2017
• A Coherent and Trustworthy Health Network for All – Digital
Health Strategy 2018-2022
National Strategies for e-Health
Source: Bruun-Rasmussen 2008 “Ten years experience with
National IT strategies for the Danish Health Care service”

21
• EU General Data Protection Rule (EU 2016/679): EU
regulation on data protection and privacy
• Act on Processing of Personal Data (APPD, 429/2000):
General national law regulating the collecting and processing of
personal data.
• Health Act (HA, 913/2010): Sectoral law governing the
processing and the disclosure of patient data for treatment and
other purposes, with special sections e.g., on patient rights
• Authorization of Health Care Professionals and on Health
Care Services (877/2011): Rules on patient rights and consent
Relevant Statutory Laws
(Attempt of an Overview)

22
• “Keeping and updating health records is a mandatory
obligation for all licensed health care professionals in Denmark,
and patient consent is irrelevant in this respect”
• “Need to know principle” distinguishing access rights through
health care professionals (HCPs) involved in treatment, HCPs
not directly involved in treatment, and other persons
• Assumption of implied acceptance of HCPs access to heath
records whenever necessary for treatment and care
• Legally acknowledged patients’ right to access health data
through ehealth architectures (sundhed.dk, etc.)
• Data use for secondary purposes (e.g., research and quality
control) in accordance with the health regulation and the APPD
(no patient consent required, no approval from ethics committee)
Principles and Peculiarities
Source: Milieu Ltd and Time.lex 2013 “Overview of the national laws on electronic
health records in the EU Member States National Report for Denmark”
+

23
C. Provider-based Systems
Provider-
based
systems
National strategy
Digital
health
innovation
Policy frameworks

24
Denmark‘s regions consolidated their Hospitals‘
Electronic health record (EHR) systems
Source: Kierkegaard 2015

25
Sundhedsplatformen
• 17 hospitals
• 8.000 beds
• 53.000 employees
• 12.000 concurrent users
• 270 staff on project
• 2.8 bn DKK (380 mn EUR)
project volume
Ongoing unification of EHR systems in
Regions Zealand and the Capital Region
2016
Tender process
2012 2013 2014 2015
Analysis / design
Implementation in the two regions
2017
Go-live
Analysis, Validation
& Design
Configuration, Testing &
End-User training
Local roll-out in the Capital Region
and Region Zealand

26
Use of Electronic Medical Records Systems
Source: MedCom
…by GPs …by specialists

27
D. Health Information Infrastructure
Provider-
based
systems
National strategy
Digital
health
innovation
Policy frameworks

28
Patient Portal (sundhed.dk)
Source: MedCom 2003 Sundhed leaflet

29
The Danish Health Data Network
Source: Henriksen 2017, Healthcare Denmark

30
National Service Platform (NSP)
including more recent services
Source: Henriksen 2017, Healthcare Denmark

31
Messages exchanged (1993 to 2013/2010)

32
D. Digital Health Innovation
Provider-
based
systems
National strategy
Digital
health
innovation
Policy frameworks

33
Denmark is an innovation-driven economy
Source: OECD International Survey on Science Technology and Innovation Policies (STIP)
innovationpolicyplatform.org

34
Healthtech clusters
• Copenhagen Health Cluster
• Medicon Valley Alliance
Health statups:1
• 93 profiles in Medical Devices
• 112 profiles in Connected
Health
• 104 profiles in Service &
Operational Solutions
• 75 profiles in Sustainable
hospitals
The Danish Health Innovation Ecosystem
1 Numbers are only indicative, source: Healthcare in Denmark

35
• Mental illness app
• Patient involvement
• Addresses individuals,
carers and clinicians
• Co-founded by researcher
from IT University of
Copenhagen (and others)
Case example: Monsenso

36
Focus areas:
1. Technology-based
counseling and treatment
2. Development, test and trial
3. Implementation
(department level)
4. Large-scale implementation
(hospital level)
5. Research on telepsychiatry
and E-mental Health
Case Example: The Centre for Telepsychiatry
in the Region of Southern Denmark

37
• Assistive Device for the
elderly
• Company founded out of
University of Aalborg
• Piloted in Aalborg, Aarhus,
and Brønderslev
Case Example: Melvin the robot for the elderly

38
• “We print bones”
• Apply printing technology to
3D print fitted implants
• Compounds convert to natural
tissue upon implantation
• Company co-founded by
researchers from University of
Southern Denmark and
Aarhus University
• Forbes below 30 award
Case example: Particle 3D

39
Consistent
government strategy
Pragmatic approaches
to policy
Early and coordinated
investments in
national technology
infrastructures
Vibrant innovation
ecosystem with ample
public/private
collaboration
Facilitating cultural
and socioeconomic
factors
Intermediate summary:
Success factors for Digital Health in Denmark

The U.S. Health System and Digital
Health: Policy Imperatives
Abhay Nath Mishra
Debbie and Jerry Ivy College of Business
Iowa State University
June 28, 2018
41

The U.S. Health System: Expenditure and
Outcomes
• Total expenditure in 2017: ~$3.5 Trillion; 18% of the GDP; 13.1 million
employees
• Expected to rise to $5.7 Trillion by 2026; 19.7% of the GDP
• Per capita expenditure in 2017: $10,348
• Outcomes
◦ Last in quality of care among similar countries (The Commonwealth
Fund)
◦ 37th in overall performance, 72nd in overall level of health among 191
nations (WHO)
◦ 50th in life expectancy, 48th in infant mortality rate
◦ 101,000 fewer deaths if the U.S. system were as good as France or Japan
◦ Significant variation in outcome and equity issues
42

The U.S. Health System: Access
• Wide disparity in access and quality, contingent on income level,
location, race/ethnicity, gender, age, sexual orientation, disability
status, etc.
• Access particularly limited to specialists, mental health care
providers,
• Number of uninsured people pre-ACA: 45 million
• Number of uninsured people post-ACA: 27.6 million (in 2016); ~8.5%
• High cost of insurance
• Lack of knowledge
43

The U.S. Health System: Financing
• Mix of public and private insurance
• In 2014, public spending accounted for 49% of total health care spending
• Medicare, Medicaid, VA, CHIP, Indian Health Services
• Financed through payroll taxes, premiums, federal general revenues and state taxes
• In 2014, private health insurance spending accounted for 39% of total
health care spending
• Out of pocket and private payments, accounted for 12% of total health
care spending
44

The U.S. Health System: Complexity and
Fragmentation
• Health Care Sector is:
1. Heavily regulated at the federal, state and local levels
2. Fragmented, with a litany of entities, programs and benefits
◦ The federal government programs, 50 Medicaid programs, hundreds of thousands of
employer-sponsored private insurance plans
◦ Each provides different levels of benefits, is administered differently, has its own set of rules
and administrative complexities
3. Care can be provided at a wide variety of care facilities, which may not share
information with each other and there may be limited/no care coordination
• EGADS!!!
45

Digital Health
• What are the various ways in which the powers of the information and
communication technologies can be used to enable interaction, health
delivery, commerce and knowledge sharing, and yet safeguard patient data?
• Improve health status: support healthy lifestyles
• Reduce health care costs: enhance efficiencies in the system
• Empower people: enable better-informed health decisions
• Enhanced clinical care and public health service: enable knowledge sharing and
communication between providers and policymakers
• Reduce health disparities: serve underserved population
• Protect patient privacy
46

Federal Laws Impacting Digital Health
• HIPAA 1996, expanded in 2002, further enhanced in HITECH Act
• HITECH Act 2009 (under the American Recovery and Reinvestment Act)
• Medicare or Medicaid Incentives for hospitals and care providers to adopt electronic
health records and use them “meaningfully”
• Penalties for non-compliant hospitals and care providers
• Development of HIEs and RHIOs
• Patient Protection and Affordable Care Act 2010 (Obamacare)
• Health insurance exchanges (state-operated, federal and mixed)
• GOP Tax Bill 2017
• Repeal of the individual mandate provision under PPACA
47

Net Impact of Federal Laws on Digitalization
• Enforcement teeth in HIPAA, cash and criminal penalties for violation
• Adoption of certified EHRs in hospitals in 2016: 96%; >80% in every state
• In small, rural, and critical access hospitals: 80%
• Adoption of certified EHRs among office-based physicians in 2016: 80%
• 12 state-based health insurance marketplaces, 5 state-based
marketplaces – federal platform, 6 state-partnership marketplaces, 28
federally-facilitated marketplaces
48

Net Impact of Federal Laws on Health
Outcomes
• Four systematic reviews in the last decade:
• Chaudhry et al. (2006), Goldzweig et al. (2009), Buntin et al. (2011), Jones
et al. (2014)
• Yet, an 2011 IOM report suggests that available evidence for the impact
of HIT is still mixed
• Overall, the impact of IT is an empirical issue (Hydari et al. 2014)
• The context of HIT implementation important to disentangle the effects
(Banger and Graber 2015)
49

50
Provider-based
systems
Digital
health
innovation
Drivers Inhibitors
Policy frameworks
+ –
National strategy

Three Potential Areas of Digital Health
Innovation in the U.S.A.
• Genomics, regulations and digital health
• Patient empowerment, regulations and digital health
• Family and social engagement for chronic health care,
regulations and digital health
51

Genomics, Regulations and Digital Health
• Pharmacogenomics
• Study of genetic makeup
and individual response to
drugs
• Personal genomics
• Personal, tailor-made drugs
for each individual
52

Genomics, Regulations and Digital Health:
Needs
• Consistent standards for genetic testing and regulated testing of
genetic material
• Rigorous protection around discrimination based on genetic
information
• Safeguard to individual genetic information (HIPAA?)
• Regulations around genetic and medical information integration
using EHRs
53

Patient Empowerment Regulations and
Digital Health
• Federal and/or state regulations and ICT solutions for enhanced
consumer decision making
• What’s covered, by how much and under which circumstances.
NO SURPRISES Federal and/or state regulations and ICT solutions for
ex post!!
• Federal and/or state regulations and ICT solutions for complete
cost transparency from the consumer’s perspective
• Federal and/or state regulations and ICT solutions for
comparability of hospitals and physicians
54

Patient Empowerment Regulations and
Digital Health: Examples
55

Family and Social Engagement for Chronic
Care: Regulations and Digital Health
• Social engagement critical for chronic care, yet mixed impact of
social media on health knowledge (buyer beware) and outcomes
• Patient follow through and adherence to the treatment regimen
is a BIG concern
• Interventions at the patient level had mixed success
• How to involve the family and extended social network?
56

Family and Social Engagement for Chronic
Care: Regulations and Digital Health
57

Conclusion
• Structural challenges unlikely to be tackled, but policymakers
may introduce piecemeal legislation on specific issues, such as
genomics and transparency
• Entrepreneurial opportunities to solve focused pain points (e.g.,
EHR-genomics integration, app for connecting family and friends
with chronic patients)
• U.S. Policymakers and the tech community can learn from and
inform those in other countries
58

Healthcare in China
Yu Tong
Zhejiang University, China

Provider-based
systems
National strategy
Digital
health
innovation
+ –
Drivers Inhibitors
Policy frameworks

1. Healthcare System
– Healthcare System Timeline
– Healthcare System Governance
– The Healthcare Structure
– Challenges
2. Digital Health Strategy and Policy
– Healthcare policies
3. Provider-based System
– Healthcare Informatics in China
4. Health Information Infrastructure
– Medical Information Exchange Planning
5. Digital Health Innovation
– Digital Healthcare Examples
– Current Health IT Development
– Internet Hospital
Outline

1. Healthcare system
Provider-based
systems
National strategy
Digital
health
innovation
Policy frameworks
+ –
Drivers Inhibitors

The Urban
Employees Basic
Medical Insurance
(UEBMI)
New Rural Co-
operative Medical
Insurance Scheme
(NRCMS)
Urban Residents
Basic Medical
Insurance (URBMI)
The Health Care
System Reform
(HCSR)
The 13th Five-Year
Plan (2016-2020)
to enhance the
HCSR
Opinions on Promoting
the "Internet +
healthcare" development
by General Office of the
State Council
Healthcare System Timeline
1980 20072003 20162009
•For all urban workers
•In 2008, UEBMI covered 67% of the target population in some form.
UEBMI
•NRCMS is designed for rural people and URBMI is for the urban migrant workers as well as
non-employed further expanded insurance coverage.
NRCMS and URBMI
•Establish and improve the basic health care system covering urban and rural residents, and
provide the people with secure, efficient, convenient and affordable health care services.
HCSR
•Build a complete public hygiene and medical service system, guarantee medicine supply and
decrease personal expenses on medical care
The 13th Five-Year Plan to enhance the HCSR
•Consummate “Internet + healthcare” service system and its supporting system
Opinions on Promoting the "Internet + healthcare"
development from the State Council
2018

Publicly
financed
insurance
Urban employment-
based basic medical
insurance
Financed mainly from
employee and employer
payroll taxes with minimal
government funding
Urban resident basic
medical insurance
Voluntary at the
household level, financed
mainly by government,
with minimal individual
premium contributions
The “new cooperative
medical scheme” for
rural residents
Same as the “Urban
resident basic medical
insurance”
Private health
insurance
Also called
Commercial Health
Insurance
Purchased to cover
deductibles, copayments,
and other cost-sharing, as
well as coverage gaps
Insurance Structure
“… coverage by publicly
financed health
insurance is near
universal—exceeding
96.5 percent of the
population since 2016.”
“Purchased primarily by
higher-income individuals
and by employers for their
workers, private insurance
often enables
people to receive a better
quality of care...”
“As of July 2017, 1.34 billion
Chinese people are enrolled in
various public medical insurance
systems, accounting for up to 98.8
percent of the population.”

Healthcare System Governance
Organization Responsibilities
China People’ Congress Health legislation
The State Council and The Central
Committee of the Communist Party
Major policies and reforms
The Ministry of Finance
Health subsidies, health insurance
contributions, and health system
infrastructure
The Ministry of Human Resources and
Social Security
Urban employment-based basic
insurance and urban resident basic
insurance
The National and local Health and
Family Planning Commission
Health quality and safety, cost control,
provider fee schedules, health
information technology, and clinical
guidelines.
Source: Hai Fang, Peking University, 2015

 Public hospitals: three levels
– Level 1 hospitals: providing primary care in one community
– Level 2 hospitals: furnished with better equipment and can provide healthcare services across several
communities
– Level 3 (particularly 3-A) hospitals: highly reputable hospitals located in large cities and enjoy high-
quality healthcare resources, such as funding, equipment, and physicians.
 Private hospitals
– Number is increasing in recent years
– Typically small and account for less than 10% of the total hospital revenue (Research and Markets
2017)
– None of the top 100 hospitals in China is private hospitals (Ailibi 2018).
The Healthcare Structure

2. Digital Health Strategy and Policy
Provider-based
systems
National strategy
Digital
health
innovation
Policy frameworks
+ –
Drivers Inhibitors

Digital Health Policy
Promotion
Regulation
 The 13th Five-year Plan
 “Health China 2030”Plan
 Regulation on Internet Treatment (Pilot) (Consultation Paper)
 State Council: opinions of promoting “Internet+Healthcare”
Promoting the development of “Internet+Health”，hierarchical diagnosis and
treatment, family physician, telemedicine
Internet diagnosis should be included in the governance governed system

 Health, healthcare, Internet, and Informatization are the priorities of the 13th FYP. For
example:
– Deepen the reform of medical and healthcare system, implement hierarchical medical
system;
 Improve the healthcare system by connecting the top to the bottom - develop telemedicine
– Encourage enterprises entering health service industry, promote the equal status of non-
profit private hospitals with public hospitals, develop cross-sectional fusion between
healthcare and internet technologies.
Promotion –
The 13th Five-Year Plan (FYP) released by the State
Council 2016

 Place the guidelines of healthcare industry at the level of national strategy for the
first time
 The HC 2030 confirms the attitude towards “Internet + Healthcare” industry,
perfects the healthcare system, improves medical supply system, optimizes the
pattern of multichannel healthcare providers, leads the healthcare services and its
related industries into actual implementation phases.
Promotion –
The Health China 2030 (The HC 2030) plan released by
the CPC Central Committee and the State Council
on October 25th, 2016

 Expand the approved list of telemedicine service to include clinical diagnosis and
prescription.
 Telemedicine should only be conducted via the platforms offered by medical
institutions.
– Individual doctors or third party commercial platforms are prohibited from doing so.
Regulation –
Regulation on Internet Treatment (Pilot)
(Consultation Paper) on May 8th, 2017

 The Opinions of promoting “Internet+Healthcare” emphasize on the
development of eHealth and Internet hospitals, the supporting system
for the “Internet+Healthcare”, and the enforcement of supervision:
– For regular illness and chronic diseases, patients can directly order medical
supplies online once they receive the prescription
– Speed up the development of Electronic Health Records for all citizens
– Enhance the informatization within healthcare institutes, and information sharing
– Aim to establish legislation for big data research in healthcare industry and
individual privacy protection
Regulation –
Opinions of promoting“Internet+Healthcare”
on May 23th, 2018

3. Provider-based Systems
Provider-
based
systems
National strategy
Digital
health
innovation
Policy frameworks
+ –
Drivers Inhibitors

 By the end of 2015, the adoption rate of Electronic Health Records in China has reached
76.4%, according to National Health and Family Planning Commission of China (NHFPC).
 The Hospital Information System has covered almost every tertiary hospital, and about 80% in
secondary and lower level hospitals as of year 2017.
 The Clinical Information System market has been expanding with a growth rate at around 20%
since 2008.
Healthcare Informatics in China

4. Health Information Infrastructure
Provider-based
systems
National strategy
Digital
health
innovation
Policy frameworks
+ –
Drivers Inhibitors

 From 2016-2017, about 84% of China’s total population has already used
connected care technology to share health information with a healthcare
professional.
 Challenge:
– China has over 300 commercial providers of hospital information systems with various technical
structures and data standards.
– Systems in hospitals are not required to exchange data with each other when they are implemented.
 What’s being planned:
– Establishing a nationally-accessible digital health information database network which will integrate
patient health profiles and medical records in electronic form by 2020.
Medical Information Exchange is the next step

 About 80% of hospitals in China are expected to share information
with each other by 2023, up from 10% in 2017.
 Established: Regional health data centers
– Shanghai and Ningbo
 More centres in construction for big data in health and medicine :
– Provinces: Fujian, Jiangsu (First Launch, 2016), Shandong, Anhui, Guizhou (Second
Launch, 2017)
– Cities: Fuzhou, Xiamen, Nanjing, Changzhou (First Launch, 2016)
Information Exchange Under Construction

5. Digital Health Innovation
Provider-based
systems
National strategy
Digital
health
innovation
Policy frameworks
+ –
Drivers Inhibitors

 Online registration service
– Saving patients’ effort of making medical appointments.
Current health IT development: Hospital

Current health IT development: Hospital

 The health-related digital platforms
– General health-related news (e.g., health news on www.163.com and
www.qq.com)
– Dedicated healthcare websites (e.g., www.39.net and
www.haodf.com).
– Social media (e.g., weibo.com and wechat)
Current health IT development: Society

Internet Hospital
Number of Internet Hospital Established during 2014-2018
As of March
Source：前瞻产业研究院整理
Number of Internet Healthcare users and its growth 2015-2017
Number of Users (10
thousands)
Internet Healthcare User / Internet User (%)
Source：前瞻产业研究院整理

Internet Hospital Example: Wu.gov.cn

Wu.gov.cn: How it works?
1. Find a doctor on Wu.gov.cn
2. Schedule for consultation
3. Distant consultation
(Video or Text)
4. Diagnose and
issue prescription
5a. Pay and get
medicine online
5a. Pay and get
medicine instore

Healthcare IT Market
2007-2015 Market Size for Healthcare IT Industry
Market Size
(100 million)
Growth Rate

 High coverage for healthcare insurance.
 Public hospitals dominate the market. Overwhelming
demand for tertiary public hospitals.
 High adoption rate for EMR but challenging for information
exchange given too many system providers.
 A rapid growth in “Internet+Healthcare” services with
strong government support
Summary

June 28, 2018
Juhee Kwon
Digital Health in South Korea
95

A. Healthcare system context
Provider-based
systems
National strategy
Digital
health
innovation
+ –
Drivers Inhibitors
Policy frameworks
97

Korean healthcare System - Overview
1. National Health
Insurance
2. Medical Aid
3. Long-term Care
Insurance
It is a social insurance system and currently covers 3.8% of elderly Koreans. Elderly people with serious
limitations in performing activities of daily living are qualified to apply for the program.
Around 2.9 % of the total population is covered under the Medical Aid Program for low-income
households.
The total number of covered people was over 97.1% of the total population. The insured are divided
into two groups: employee insured (68.7%) and self-employed insured (28.4%).
19891963 2008
•Medical Insurance Act
•National Health Insurance in large
firms (more than 500 employees)
•Universal Health Coverage
(public and mandatory system) •Long-term care in 2008
98
1951
•Medical Service Act
19791977
•Medical aid program in 1979

1. National Health Insurance
• Contributions (5.08% of an average salary), government, tobacco surcharges
• Low-contribution (5.08%), high co-payment (over 37%)
– Many services are not covered (e.g., MRI, Ultrasound, Private room)
– Overall fees for covered items are set low compared to other countries
– Out-of-packet payments are higher : 37% (OECD: 20%)
• Universal care coverage by mandatory national insurance system
• No major issue on physician or nurse coverage although specific areas have physician shortages
• Walk-in patients only have to wait 15-30 minutes to see doctors
• No real gate keeping system with large number of clinics and strong preference for leading tertiary
hospitals in Seoul : freedom of choice
• Mandatory subscription to National Health Insurance & fee for service
• ~ 95% of doctors are specialists
• Governments has very strong influence on healthcare policies, price setting, clinical guideline review
and reimbursement decisions
• Doctors show distrust for the government
Access
Financing
Providers
Government
99

2. Medical Aid Program 3. Long-term Care Insurance Program
For low-income households
– The Government pays all medical
expenses for patients who are unable to
pay for healthcare
Around 2.9% of the total population is
covered under the Medical Aid Program
(2013).
It is funded by the central and local
government.
It covers 3.8% of elderly Koreans.
– Elderly people with serious limitations in
performing activities of daily living are
qualified to apply for the program
It is funded by the payment by the insured,
government subsidies, and co-payment
beneficiaries.
100

Ministry of Health and Welfare
The insured
Health Insurance Review
and Assessment Service
Healthcare providers
National Health
Insurance
Service
• Contribution amount(rate)
• Contribution imposition standards
• Scope of medical care benefits
• Approval of the budget/regulation of the
National Health Insurance Corporation
• Eligibility management
• Contribution imposition and collection
• Payment of medical expenses
• Medical expenses (fees)
• Benefit management
• Physical examination
Notification of
Review findings
Contributions
Insurance benefits, etc.
Policymaking
Policyexecution
National Health Management
101

Provider-based
systems
National strategy
Digital
health
innovation
+ –
Drivers Inhibitors
Policy frameworks
B. National Strategy & Policy
102

Major Legislation Regarding Information Sharing
Personal
Information
Protection Act
(PIPA)
Bioethics and
Safety Act
(BSA)
Medical
Service Act
(MAS)
• PIPA was enacted in 2011 to
protect privacy from collection,
leakage, and misuse of personal
information.• MSA was enacted in 1951 to ensure
benefits of high-quality medical
treatment for public health
regarding duties of medical person,
medical institution, verification of
drug info., patent records, etc.
• BSA was enacted in 2004 to ensure
bioethics and biosafety by
preventing the violation of human
dignity and values regarding
research on human subjects,
personal information, human
cloning, etc.
103

Major Legislation Regarding Digital Health
• In S. Korea, one of few countries where it is still illegal, telemedicine between
doctors and patients is currently prohibited under the South Korea’s Medical Act.
– A recent government attempt to legalize it has been met with a wall of
opposition from medical professionals and activists.
• There is no clear guideline for new healthcare inventions such as medical devices
equipped with artificial intelligence as well as wareable to monitor and detect
certain symptoms.
104

Challenges for Digital Health
• De-identification: How to integrate more patient data while reducing privacy concerns?
– The guidelines for de-identification of personal information have been effective as of July 1, 2016.
• Health IT standardization : How to make patient data from different EMR systems more
transferrable?
– A new article regarding the standardization of EMR was inserted into the MSA in Dec 2016.
• Divided opinions:
– Large private hospitals, comparatively rich and popular, are broadly supportive of introducing more
technological innovation in health and have already taken steps in that direction
– Much more numerous smaller clinics and doctors are suspicious of technology that may reduce the
need for their services.
105

Health Provider-
based systems
National strategy
Digital
health
innovation
+ –
Drivers Inhibitors
Policy frameworks
C. Health Provider-based Systems
106

Health provider-based systems: EMRs vs. EHRs
• The adoption rate of electronic medical records (EMRs) in South Korea has
continuously increased.
– EMR adoption is 90.6% for specialized general hospitals (>500 beds), while it is 61.4%
for clinics.
• There has been a lack of electronic healthcare records (EHRs) functionalities and
interoperability.
– Most Korean health information systems are based on EMR for the treatment of
patients within a hospital, rather than EHRs for life-time healthcare of individuals.
107

Health provider-based systems: EDI
• No consensus has been established in South Korea, in contrast to the situation in other countries,
where there has been a national effort to improve and standardize EHR interoperability.
– The overall EMR adoption is about 71.3%, but only 4.8% of hospitals have participated in EDI.
• A wide range of digitization, but a lack of interoperability.
71.3
4.8
69.8
32.1
90.6
37.1
100 100
76.9
1.8
90.7
30.8
61.4
1.9
62.4
8.1
0
20
40
60
80
100
EMR EDI Privacy Policies Y/N Digital Health Team Y/N
TOTAL Specialized general hospital
108

Health provider-based systems: Telemedicine (1)
• The government’s telemedicine pilot program revealed serious problems in data
management, encryption and weak passwords.
– Medical professionals, including the 100,000 doctors in the KMA who successfully blocked
telemedicine in 2014 and haven’t participated in the pilot program, are calling for “a slower, more
collaborative plan that establishes safety protocols and smart regulatory oversight.”
109

Health provider-based systems: Telemedicine (2)
• Telemedicine is intertwined with fears
– South Koreans also know better than anyone what’s at stake, given the threat of cyberattacks by an
increasingly capable North Korea.
– The exposure of personal medical data can lead insurance companies to discriminate against patients
based on their records.
110

Provider-based
systems
National strategy
Digital
health
innovation
+ –
Drivers Inhibitors
Policy frameworks
111

Healthcare Big Data Platform (1)
• The South Korean government will consolidate medical data from major hospitals across the
country and establish a comprehensive database, as part of its goal to foster the country’s
lucrative pharmaceutical and healthcare industries
– A project of Health Bio-Data Platform is expected to start as a pilot study in 2018 to connect data from four
major public institutions as follows;
– April 2018 ~ December 2020 – about US$ 10 millions
• The purpose is to connect data from four major public institutions as follows;
112

Healthcare Big Data Platform (2)
Bio Big Data
Center
IT Company
Data analytics
SW request
Data analytics
SW supply
Data analysis
results
Data analysis
results
Data analytics
SW
Data analysis
request
Hospitals Firms
Pharmaceutical
firms
Cosmetic firms
Food industries
Fitness
Insurance firms
Medical devices
113

Provider-based
systems
National strategy
Digital
Health
innovation
+ –
Drivers Inhibitors
Policy frameworks
E. Digital Health Innovation
114

Digital Health Context : Inhibitors
• S. Korea, the world’s most tech-obsessed nation
– The Korean infrastructure is favorable for supporting next-generation products and services with high spending per
capita, particularly on ICT.
– A large portion of the Korean population has mobile (115%) or Internet (84%) subscriptions, and there is high
penetration of desktops, notebooks and tablets.
• However, regulations hamstring ‘Digital Health’ or ‘eHealth’
– South Korea's digital health care industry has been at a standstill due to excessive regulations.
• In 2016, no more than three mobile healthcare apps obtained the local medical device authorization, while the
U.S. allowed the sale of a total of 36 digital healthcare devices.
• Each of the three apps provides nothing more than patient information collection and observation. 115

Digital Health Indicators in S. Korea
• The “eHealth” market contains user and revenue developments in three market segments: “diabetes”,
“hypertension” and “heart failure”. These are selected, relevant health areas that do not represent
the eHealth market in its entirety.
User (in millions): In the segment "eHealth solutions for Diabetes",
the number of users is expected to amount to 0.2m by 2020.
ARPU(in US$): The average revenue per user (ARPU) in the segment
"eHealth solutions for Diabetes" amounts to US$74.39 in 2018.
116

Global Comparison – Revenue
• With a market volume of US$3,821m in 2018, most revenue is generated in the United States
117

Risks in the National Health System
• The increasing elderly population and decreasing birth rate lead to surge in the next
decade, putting significant strain on funding.
– Aging is driving change in the country's disease profile : costly-to-treat diseases like cancer
and diabetes are rising rapidly.
• High out-of-pocket payments have led to the need of private health insurance: the
national health insurance plan puts much of the financial burden on individuals
through high co-payments (up to 40% of costs).
– Private health insurance in Korea is both complementary and supplementary.
118

Government-driven Digital Healthcare
5.39
24.35
55.91
88.87
114.78
0
20
40
60
80
100
120
2020 2030 2040 2050 2060
Expected deficit in medical
expenses
Unit: millions (US$)
• The burden of healthcare and medical care is
increasing year by year.
– Due to the surge in medical expenses for the
elderly, the deficit in the national health
insurance system is expected to grow.
• Digital healthcare is attracting attention as an
effective alternative.
– From cure to care: The preventive and
monitoring-based health care become more
important.
119

The Most Innovative Health Startups in South Korea
• In South Korea, digital health has currently focused on patient information collection and
observation for self-management.
– Digital medical wearable device
– Digital therapy
120

Soundmind
Soundmind is a Computerized Cognitive Training
Solution to delay the onset of Alzheimer's disease.
Let Soundmind help you keep a sound mind─stay
healthy, stay young.
122

Summary
• South Korea has severe restrictions on mobile health or telehealth solutions.
– Medical laws force patient to see doctors in person, precluding a market for telehealth services.
– The Korean government has signalled the intention to increase investment in digital health, but most of
the activity appears to be concentrated in areas related to administrative simplification, effective claim
adjustment, and electronic medical records, not in mobile and telehealth.
• Despite regulatory restriction, Korea’s Digital health market has grown up. However, most of
startups have focused on developing care services rather than cure services requiring a patient-
doctor relationship.
– Within the care service, consumers ('patient' is an inappropriate label here) are (very nearly)
sovereign.
125

Workshop Digital Health in Context, June 28, Copenhagen Business School
The German Perspective
Challenges of Building a National Health Infrastructure in a Bismarck Health System

130
A. Healthcare System
Provider-
based
systems
National strategy
Digital
health
innovation
Policy frameworks
+ –
Drivers Inhibitors

131
Health expenditure by GDP: 11.2 %
- 74% public spending; 11% out-of-pocket
Two insurance systems
- Statutory health insurance (SHI): Non-for-
profit, nongovernmental health insurance
funds (“sickness funds”, 118 as of 2016)
– cover ~86% of the population
- Substitutive private health Insurance (PHI):
optional for employees above earning
threshold1, mandatory for self-employed,
and civil servants (42 different companies)
– cover ~11% of the population
Funding (Bismarck model)
• equally shared by employer and employee
(SHI: 14.6% gross wage, PHI: risk-based)
Germany‘s “Bismarck” Health System
German Health Insurance Funds
(by members in thousands)
1 Earnings threshold for private insurance
currently at 59.400 EUR/year (2018)

132
Key characteristics:
• Shared decision making
between states, federal
government and self-regulated
payer/provider organizations
• Separation of sectors: health
insurance and long-term care
Providers
• Hospitals (by beds): Public
(50%), private not-for-profit
(33%), private for-profit (17%)
• Physicians: Independent,
regional physician associations
negotiate with sickness funds
Governance and organization of the German
Health System
Source: Blümel and Busse, Commonwealth 2017
Statutory system
Private system
Legend:

133
Socio-cultural challenges for Digital Health in
Germany
“Germany has given rise to two political systems
in which the surveillance of its own people played
a fundamental part of control, manipulation and
oppression: the Third Reich and the German
Democratic Republic.”
Attitudes to explicit approval being
required to collect and process any kind
of personal information in Germany
–

134
▲ 2003: Project “better IT for better health” (bIT4health), law for the
Modernization of Statutory Health Insurance: provided the introduction of
health card (eGK) by 2006
▲ 2005: Foundation of Gematik GmbH as a joint venture of the top
assocations of insurers and providers
▲ 2006: Planned implementation delayed due to technical issues and
software deficiencies in pilot tests
▲ 2007: new Government communicates revised testing plan
▲ 2007-2013: Resistance of German physicians, amongst others..
…2008: Proposal of an alternative concept with USB stick as repository
▲ 2009: Pilot tests in one Bundesland (North Rhine-Westphalia)
▲ 2010: New (conservative-liberal) government, minister of health opts
for much reduced functionality (identification + emergency data)
▲ Until 2013: Insurance obliged to distribute eGKs, by Oct adoption >90%
Painful history of the German health card

135
B. Digital Health Strategy and Policy
Provider-
based
systems
National strategy
Digital
health
innovation
Policy frameworks

136
“Germany needs an eHealth Strategy”
Source: Zentralverband Elektrotechnik- und Elektronikindustrie e.V.
Source: Techniker Krankenkasse
Source: Bitkom

137
• Founded by the Ministry of Health at the 2010 IT summit
(IT-Gipfelprozess)
• Motivation partly due to slow progress with past initiatives (eGK)
• Preliminary results and outcomes
- Telemedicine Portal: Information portal about e-health
projects, developed by Fraunhofer, now operated by Gematik
- Criteria for Future Projects: Project assessment framework
(motivated by negative prior experiences)
- Interoperability Study: As-is analysis of sectoral system
heterogeneity, published 2014
The German “E-Health-Initiative”
Souce: Bundesgesundheitsministerium.de 2018

138
• Series of law changes passed by the Federal Parliament Dec 2015
• Shall ensure that the “Electronic Health Card” (eGK) operates by July 2018
Key points
• Paper form medication plan can be saved on eGK from 2018
• Physicians incentivized for using electronically signed communication
• Identity and insurance check against master data using eGK
• Reimbursement of video consultations from April 2017
• Interoperability directory to be provided by Gematik from July 2017
• Storing emergency data on eGK
• eGK to be able to allow for patient’s access to a personal health record
 every insured person will decide for him/herself whether and to what degree
they wish to make use of the possibilities offered by the eGK
2016 “E-Health Law” defines new roadmap

139
Decision by the German congress
of physicians, May 2018:
• “Doctors in Germany are now
allowed to treat patients via
telephone, SMS, e-mail or
online chat…
• …provided that that they ensure
due medical care and educate
patients about online treatment”
• Agreed after controversial
discussions
A step forward in Telemedicine
Souce: Zeit, May 2018

140
• Right to informational self-determination (Bverfg 1983)
• Federal Data protection act (BDSG): General privacy rights
• IT security law July 2015 (BSI IT-Sicherheitsgesetz):
- eGK-related infrastructure defined as “critical infrastructure”
• Patient Rights act (Patientenrechtegesetz) Feb 2013:
- Stronger patient rights
- more information (treatment, costs, etc.)
• Changes to criminal code regarding medical confidentiality 2017 (Gesetz zur
Neuregelung des Schutzes von Geheimnissen bei der Mitwirkung Dritter an der
Berufsausübung schweigepflichtiger Personen)
- Expansion of punishability of physicians and their service contractors in case of
disclosure of patient data
• Codes of conduct of medical associations (Berufsordnungen der 17 Ärztekammern)
Further laws relevant to digital health
Sources: Gehring et al. 2018 Bundesgesundheitsblatt; medperts.de 2013

141
C. Provider-based Systems
Provider-
based
systems
National strategy
Digital
health
innovation
Policy frameworks

142
Adoption of clinical information systems is moderate
Source: IT-Report Gesundheitswesen 2018 (n=215 hospital CIOs)
We have a fully functional
EHR system
We have started to implement an
EHR system (partially functional)
We are planning to implement an
EHR system
We have not started to plan
an EHR implementation
Source: Hübner et al. BMC Medical Informatics and Decision Making 2010

143
The market for EHRs in Germany is fragmented
(Krankenhausinformationssysteme)
“More than 200 different systems” (Source CDU Strategiepaper 2017)
Others
Source: CIO.de / kma-online 2017

144
Provider-
based
systems
National strategy
Digital
health
innovation
Policy frameworks
Health information infrastructures

145
Regionally
driven
PEPA Heidelberg
Rhein/Neckar
(since 2014)
Universitätsklinikum
Hamburg-Eppendorf
(UKE)
Insurance
driven
Private insurers with
IBM health records
(TK 2017, Signal Iduna,
Central 2018)
AOK Nordost with
Vivantes, Sana, Cisco
(since 2016)
Hospital
group driven
Asklepios
(by 2019 in al 15 clinics)
Rhön WebEPA+
(2016)
…
After the eGK telematics infrastructure shortfall,
silos of health information networks are forming
Selection based on: Dtsch Arztebl 2017; 114(43): A-1960

146
• BMBF funded
research project
• 27 partners in one
region
• Use cases:
- Patient record
- Medication
- Case management
- Monitoring and
research
Example PEPA:

147
D. Digital Health Innovation
Provider-
based
systems
National strategy
Digital
health
innovation
Policy frameworks

148
Germany aims to be a leader in innovation

149
Government-supported
• BMBF Hightech Strategy
• 6 Centers of Health research
Selected vehicles of (digital) health innovation
Startups

150
Case example: Tinnitracks
• Tinnitus treatment
• Apps filters music from
customized playlists
• Technology based on
scientific findings
• Founded 2013 in
Hamburg
• CE approved and
U.S. FDE medical device
approved

151
• Enables secure communication
between patients and dermatologists
• Founded in Berlin 2013
• Bought by goderma (NY/USA) and
expanded to USA
• Reasons, among others, better legal
framework and higher willingness to
pay
Case example: Klara Dermatology App

152
• Gives users health vault on
their mobile (and a place of
choice to backup)
• Integrates health records
with wearable data
• LifeHub devices at
Physician endpoints
(or scanning)
• Company founded 2014 in
Hamburg
• Collaboration with
University Clinic Eppendorf
Case example: Connected Health LifeTime

153
Summary Healthcare system context
Provider-
based systems
National strategy
Digital
health
innovation
+ –
Drivers Inhibitors
Policy frameworks
• Self-regulated health system
governance has hampered
national digital health efforts
• Despite a persistent lack of a
national strategy, policy efforts
now prescribe a roadmap for implementing various services
• In the absence of national infrastructures, local silo‘ed solutions
emerge centered around large hospitals and/or vendors
• In spite of low digital readiness, there is a fertile ecosystem of
innovative digital health startups some of which are expanding

Copenhagen Business School, June 28, 2018
Thank you for your participation!

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