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GIL Mexico 2017: Digital Transformation Impacting the Mexican Healthcare Market
- 1. GIL Mexico 2017 DigitalTransformation Impacting the Mexican Healthcare Market: Benchmarking Experiences and Spotting Opportunities Rita Ragazzi Research Head Latin America Transformational Health
- 2. 2 Digital Transformation Impactingthe World with New enabling Technologies Mobility Big Data and Analytics Social Media Automation Smart Energy Digitalization IoT Cloud Services Open Innovation Artificial Intelligence Machine Learning Connectivity
- 3. 3 Key Dimensions DigitalTransformation Will Impact Healthcare • Converting imaging exams, medical records, inputs from devices and sensors, fitness and alimentary habits, medication routine and other medical information into digital, sharable information will be revolutionary to healthcare of people and medicine evolution. Digitalization of data will be the first step into construction of health analytics. Digitization • Mobile health will enable remote monitoring, easy and immediate primary care access at low costs, treatment compliance and engagement, patient ownership of its health data, continuum record and analysis of health vital signs , care anytime and anywhere Mobile Health • IoMT will open the doors to selfcare and remote monitoring, intelligent integrated care models, cheaper , faster and with wider scope as IoMt will be present in most of devices and applications, in a looping feed and collaboration of health data from and to several care sites IoMT • The exponential volume of health generated data, as well as for the pressure to higher quality and lower costs for healthcare, can only be addressed with the use of Big data and analytics. • At patient level prevention and early diagnostics will be more effective, personalized treatments possible and holistic approach into truly engaged patients will be expanding life quality and expectancy • At population level disease diagnostics, interaction, prognostics and treatments can evolve, costs can be reduced through reduction of medical errors, reduction of acute conditions related costs , unnecessary exams , prevention and remote treatment Health Analytics
- 4. 4 Digital Transformation isnot a technology change , is a society disruption that will demand new business models including for healthcare 10 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 10 Degree of Operational/Clinical Efficiency LevelofAttractiveness/Profitability Healthcare Marketplace Product/ Process Digitization Mass Customization e-Commerce/ m-Commerce Product-as- a-Service Software-as- a-Service Platform-as- a-Service Data-as- a-Service Managed Services Shared Economy Risk-sharing Models Crowdsourcing Open Source Single Firm Independent Model New Market Creation Single Product Strategy Disaggregation Social Enterprise On-demand Health Healthcare Industry: Comparative Analysis of B2B and B2C Models, Global, 2016 High High Low Low B2C B2B Traditional Business Models Emerging Business Models
- 5. 5 New HC BusinessModels are Fundamentally based on Digital tools Business Models Major Services/Solutions Examples of Selected Companies in Healthcare Space On-demand Health Doctors (in-house visits/telemedicine), at-home pathology service, medicine delivery, medical transport, online remote monitoring Iggbo, Medicast, Teladoc, Stat, Your.MD, Qliance, zipdrug, Postmeds, heal, Doctor On Demand Healthcare Marketplace Online health communities/portals, digital health application aggregators, online health coaching Health Gorilla™, HelpAround, ZocDoc, Homehero, Medigo, HomeTouch, Doctolib, HealthUnlocked e-Commerce/ m-Commerce Web portals and mobile apps enabling healthcare logistics, online pharmacy, Practo, WebToMed, PillPacks, HealthKart, Amazon.com Health Servicization Models Product-as-a-Service (medical devices), HealthData-as-a-Service, Health Platform-as-a- Service, Managed Services physiQ, Medtronic Hospital Solutions, Specialist On Call Inc., uMotif Product/Process Digitization and digitalization Digital medical devices, wearables, e-Pills and smart devices, clinical workflow optimization, digital therapeutics, and coaching Augmedix, Syncera, Philips Lumify, omada, Hocoma AG, Valedo, Proteus, ePill Peer Sharing and Crowdsourcing Doctors network, patient network, open source platforms, TrialReach, patientslikeme, Game for Health Europe, HelpAround, ClinCapture, BioMed Central, BioDatomics (open source platform) Shared Economy Collaborative buying (GPOs), collaborative consumption, shared models Cohealo, MedAssets, Intalere, HelpAround Mass Customization 3D-printed medical devices and medicines, personalized genomics Oxford Performance Materials (OPM)
- 6. 6 Patient Demands -New engaged and empowered patients demand new ways of receive healthcare 64% of consumers would see a doctor via video* 70% of consumers would rather have an online video visit than an in-office visit to obtain common primary care prescriptions* 76% of patients say access to care is more important than physical human contact with their care provider** 70% of patients would trust an automated device to provide a diagnosis and determine whether or not they needed to see a doctor** 74% of patients are comfortable having their health records available in the cloud, assuming adequate security (excluding Germany and Japan)** * American Well-sponsored survey of 2,019 Americans (2015) ** Cisco-sponsored survey of 6,000 people in 10 countries (2013) PATIENT NEEDS AND EXPECTATIONS CONVENIECE ENGAGEMENT PERSONALIZATON
- 7. 7 Industry Demands –Traditional Business Models are being Disrupted 1,188 1,576 2010 2015 Pharma Market: Increasing Drug Development Cost (USD Billion), Global, 2010 and 2015 0,0% 5,0% 10,0% 15,0% 20,0% 25,0% 30,0% 2009 2010 2011 2012 2013 2014 2015 PercentageChange Traditional Medical Devices Sales: Revenue Growth and Operating Margin, Global, 2009–2015 Revenue Growth Operating Profit Medical Device Market Performance: Industry Average, Global, 2009–2015 Eroding Profit Margins Pharma Market Performance: Industry Average, Global, 2010–2015 10,10% 7,60% 7,30% 4,80% 5,50% 4,20% 2010 2011 2012 2013 2014 2015 Pharma Market: Declining R&D Returns Y-o-Y (%), Global, 2010–2015 816 416 2010 2015 Pharma Market: Declining Peak Sales per Asset (USD Million), Global, 2010 and 2015 0,0% 1,0% 2,0% 3,0% 4,0% 5,0% CPI for Medical Care Services CPI for Medical Care CPI Medical Device Prices PercentageChangein ConsumerPriceIndex(CPI) 2001–2011 Increasing Pricing Pressure
- 8. 8 Last Decade CurrentDecade Next Decade Medical Products Medical Products Services Medical Products Services Intelligence Differentiation through product innovation, repair, on site relationships Differentiation by providing services primarily to one key stakeholder Differentiation via timely insight, efficiency, value to multiple stakeholders Value for Customers MedTech is Shifting To Deliver Value & Differentiation Driven by ‘Intelligence’ Source: Roland Berger, Frost & Sullivan Analysis mHealth IoT Big Data & Health AnalyticsWearables/ Biosensors Artificial Intelligence Augmented Reality Medical Products Connected Products Medical Platforms & Solutions Evidence Based Care Real-time Outcome Based Care Predictive & Preventive Care 8
- 9. 9 Degree of Competition LevelofAttractiveness mHealthMarket Potential in USD Billion by 2021 (in Value) $10 $5 $1 $0.5 Hyper tension Cancer Management Depression & Mental Health Sleep Disorders Elderly Care Multi-Parameter RPM Women / Child Health mHealth is Already Disrupting Pharma Business- Competitor or Partner Chronic Management • Medical apps for diabetes, chronic pain and cancer management, hypertension, mental health and women’s care remain attractive segments due to rapid adoption among patients and physicians alike These are the major disease areas accounting for >70% healthcare cost globally Low High High Fitness Nutrition Diabetes Others Consumer Apps Medical Apps 9 mHealth Apps & Care Mgmt ~ $3.1 billion Latin America Market Revenue Estimation 2020 Source: Frost & Sullivan ~ $0.8 billion Mexican Market Revenue Estimation 2020
- 10. 10 How Digital TransformationIn Healthcare Can Unveil opportunities in Mexican Healthcare Market Enabling New Business Models and Fostering Market Growth for public and private side Reducing out-of pocket health expenditure and promoting value based care Addressing Quality and coverage inequities as well as promoting HC systems portability Helping to surpass health Infrastructure Gaps Reducing the burden of Chronic diseases Digital Health Tools and Technologies Transforming the Mexican Medical Devices Hub into a source of technology innovation for the entire country
- 11. 11 35% Airedale NHS FoundationTrust Reduction In Hospital Adimissions 59% Reduction in Hospital Days Staying mHealth , Telemedicine and IOT towards Infrastructure Insufficient health personnel and infrastructure in Mexico : 2.42.4 3.4 Hospital beds density (per 1 000 population) 1.5 4.7 Sussex Community Trust Telehealth monitoring program costed ~US$1,2 a day and reduced 75% of hospital visits Better use of the healthcare invested budget, with the use of mHealth, telemedicine and IoT increasing the accessibility of healthcare through virtual consultations, self care, chronic and elderly remote monitoring reducing the need of costly health infrastructure Telemedicine hub for primary care consultations in order to reduce unnecessary hospital visits in residential care homes
- 12. 12 EHR and HIEtowards Healthcare efficiency and system consolidation Open source or cloud based EMR and data sharing platforms, improving hospital efficiency and reducing costs originated by the fragmentation on Mexican healthcare market (portability and integration), enabling PHM • Community Care of North Carolina (CCNC) is a • Home and care management to > 1 MM low-income Medicaid patients • Care coordination and VBO reimbursement • Web-based case management information system + Electronic prescribing (BCBS) IMSS have increased substantially, but still ~40% of the population still remains in the informal workforce and SP still have a low coverage Segmented healthcare system hindering higher access and coverage Uneven funding systems and lack of quality measurements that could enable inter- systems services providing • Taipei Medical University Hospital and Digital Treasury Corporation • phrOS is a blockchain operating platform that allows healthcare stakeholders to jointly create applications (EHR, data lakes, disease prediction and monitoring, automatic insurance reimbursement, online health management) • Benefit : Blockchain by using multiple certified ledges promises to solve the problem of privacy, data security and interoperability for HC applications
- 13. 13 Health Analytics intoValue Based Health • 225 patients with chronic obstructive pulmonary disease (COPD) pilot project • Health analytics model predicted readmissions/ acute episodes for COPD with 85% accuracy • Fitfth cause of death in Mexico, achieving about 8% of the population • Over 21,000 deaths/ year, surpassing breast cancer, AIDS and prostate cancer • ~80% underdiagnosed • Yearly exenditure per patient ~US$1,100 reaching US$2,300 when acute conditions take place Improvement and standardization of health protocols Decision support tools Health Analytics performance based payment inter-systems services providing Vale Based Reimbursement
- 14. 14 Chronic Disease RemoteMonitoring IoT and mHealth monitoring and identifying population at risk, combating chronic diseases such as diabetes, obesity and heart conditions while promoting beneficial lifestyle habits, education and patient engagement 64% 54% 56% 68% 39% Mexico Brazil Colombia US Global Overweight population -OECD, 2015 Properly Treated 37% 14% Prevalence Diabetes US$5 B / Year or USD$ 700 to USD$ 3,200 year per patient US$ 250 - US$500 a year for a Diabetes remote program Diabetes Financial Burden
- 15. 15 Patient Platforms andIoT supporting Value based care towards reduction on OOP expenditure Addressing medical related out-of pocket expenditures by patient platforms and apps related to increased adoption, compliance and engagement of drug treatments as well as enabling outcome based agreements with drug makers through IoT and mHealth 91% 47% 69% 62% 64% Mexico Brazil Argentina Chile Colombia % Out of pocket healthcare Expenditure, 2015 45% 43% 38% Loss of employment Deterioration of the health of a relative or partner Diagnosis of a serious illness (38%). Mexican Key Concerns Related to Financial Planning Virta’s business based on model remote monitoring and personal health coaches to eliminate or (drastically reduce) diabetes medications. IoMT, health analytics and machine learning are the future Type 2 diabetes taking Merck’s drugs - outcome based agreements UK, Russia, Israel and many other public health systems have similar agreements for reimburse or even register drugs Propeller Health, and GlaxoSmithKline: Asthma medications with sensors, that patients attach to their inhalers to monitor when they’re used. Patients get feedback from app end up using the medication less often.
- 16. 16 14,29 10,5 11,39 7,6 Local Production Imports ExportsInternal Market Mexican Medical Devices Market in Numbers, 2016 Boost Medical Devices Industry Hub in Mexico ** Source:Secretariat of Economy’sTariff Information System , INEGI 2016 & ProMexico Mexico is the leading supplier of Medical devices for US Connected health devices market will grow 2017-2025 at CACG of 20% 3 Huge production hubs capacity Baja California, Chihuahua ,Ciudad de México) 8Th Global exporter of healthcare devices Partner with Universities & government fomenting innovation for local and international markets Change in the local industry from commoditized consumables to value –added connected health devices Consumables and Disposables 35% Imaging Diagnostics 8% Implants and therapeutic applications 9% Others 48% Mexico Medical Devices Exports, 2016 ValuesinUS$Billion
- 17. 17 The Last word Datacentric healthcare will be the base of the healthcare transformation. Wide availability of data will boost the use of cloud based solutions favored by lower costs of implementation and benefited by open source and pen innovation platforms such as blockchain Telemedicine will have a great push supported by the lack of infrastructure , boosting teleradiology, home care, mHealth, and remote patient monitoring mHealth have a great impact in Mexico by changing the way physicians and patients interact, specially in wellness and remote monitoring, and finally moving into patient digital health platforms. Due to lagging regulations this market will start form B2C models and slowly moving into B2B Nevertheless digital health has a tremendous potential to transform healthcare in Mexico there is still the need to develop creative reimbursement model to reward the most important stakeholders in the value-chain in order to achieve larger adoption Mexico has a great opportunity to take advantage in digital transformation in Healthcare not only by the healthcare side , but also as a leading producer of technology fomenting the growth of the market
- 18. Rita Ragazzi Research HeadLatin America Transformational Health Rita.ragazzi@frost.com Thank You !