Editor’s Note: The following article is part of an ongoing series offering our strategic advice and expertise on what healthcare industry stakeholders should do immediately in response to the rapidly evolving novel coronavirus (COVID-19) pandemic.
The global COVID-19 pandemic has hit healthcare hard, considering the immense pressure for the sector to build up capacity, to protect its workforce, to coordinate across public response and policy, and to assure and serve the populace in many stages of worry and /or disease. As the government urged or mandated populations to stay at home and as hospitals turned away patients for non-COVID-19 related ailments, digital health and telemedicine supplemented the strained delivery system.
Digital health had already been steadily on the rise. This is due to the proliferation of online technology innovations, the increasing consumerism of healthcare, and an increasing chronic disease burden. Even without the added impetus provided by COVID-19, as we will discuss later in the article, China’s online medical services market was expected to reach over 59 million users by the end of 2020. It is expected to grow over 20 times by 2026, reaching an expected market size of $28 billion. This trend will continue, in our view, with Asian consumers continuing to be one of the leading regions globally for digital health. Asian consumers are more ready for a digital healthcare future than their global peers are. This is according to Health on Demand, a newly launched study from Oliver Wyman and Mercer conducted in 2019, which suggests that:
- Respondents from Asian countries (India, China, Indonesia, and Singapore) are more excited by digital health (78 percent versus 66 percent globally)
- 61 percent of Chinese consumers consider themselves “early adopters” of new technology (versus 38 percent globally)
- Lower barriers to adoption, with a higher proportion of the respondents willing to share personal information for healthcare purposes (94 percent versus 85 percent globally)
The COVID-19 crisis has dramatically accelerated the global demand for online healthcare. Many Chinese platforms and service providers have reported a spike in new adoption and increased utilization during the pandemic. China’s largest healthcare platform, Ping An Good Doctor, for example, saw newly registered users grow 10 times from early Jan to mid-February, with their average daily consultations reaching nine times as many normal users. Other healthcare platforms like Dingxiang and HaoDF reported triple-digit growth during this period. Amidst the current pandemic crisis, digital health, no longer a fringe technology, has become a viable care delivery supplement for traditional healthcare providers.
Outside of China, we have also seen other innovations pick up, including Halodoc’s tie-up with Indonesia’s “superapp” GoJek and Singapore’s launch of an online symptom checker to triage non-urgent cases digitally and reduce unnecessary patient flow into hospitals.
COVID-19 may have thus defined a new normal for online healthcare. But there have been three immediate “side effects:”
1: An increased need during the crisis has reduced or eliminated previous barriers for wider adoption.
COVID-19 has put immense pressure on healthcare capacity. Authorities are encouraging the global use of telehealth services to restrict crowding in hospitals, stop further virus spread, and free up intensive care unit capacity.
Thus, a combination of self-isolation, the increased need for medical services, and restricted supply by providers is effectively forcing people to try online medical services. This could permanently change their preferences where they now favor non-traditional options. The added convenience of these services can be a sustained proposition beyond COVID-19, too. If we can find the right balance between patient experience, provider capacity, and fair reimbursement by payers, it’s an ultimate win-win-win.
2: The technology infrastructure is ready to revolutionize the sector.
Efficient online medical services rely on the development of a series of technologies. These include big data, artificial intelligence, and 5G to ensure appropriate clinical action, communication, and coordination between patients, platforms, and providers.
China rolled out one of the world’s biggest 5G networks in 2019. This has enabled greater expediency and capability for real-time coordination in digital health. 5G in health was critical for the “remote consultation platform” of Huoshenshan Hospital, for example, which connected its physicians with medical experts far away in Beijing in real-time. It has also empowered initiatives in public health such as epidemic monitoring and virus tracking.
3: Policies and regulations have created a favorable environment for online medical services.
Since 2018, the Chinese government has passed several policies to support the development of "Internet + medical health.” This includes the push for a “national telemedicine network.” Additionally, there are already 15 provinces in China that have issued opinions or action plans to promote online medical services.
The inclusion of online medical services into the national health insurance reimbursement system in late 2019 is a substantial step towards the digitalizing of the full patient journey. However, many private health insurers have not yet codified online care into reimbursement. This is because most platforms are not connected to existing brick and mortar facilities. And, it is because costs, though mostly inexpensive, are borne out-of-pocket by consumers.
Opportunities for the Future
As adoption and demand continue to rise in size and sophistication, the bar will be set higher for online medical services providers to offer a wider array of use cases and deliver a superior experience to stand out. This could set in motion the next-generation models of online medical services. We believe this requires:
1. Proactive engagement. Currently, many Chinese telehealth platforms “replace” the face-to-face encounter for acute conditions with artificial intelligence-based chatbots. Telehealth can also be extended to support more complex and chronic conditions, similar to how many US telehealth platforms provide digital case management, monitoring, and online ecosystems to support chronic patients.
2. The same quality of online and physical care. The “quality” of online diagnosis and preference for face-to-face visits remains a barrier to adoption, as per our aforementioned Health on Demand survey. To that end, online medical services must cooperate with hospitals and regulatory bodies to establish doctor qualification systems that assure the credibility of online platforms. Also, the platform/app can help link online to physical care by being associated with various providers and seamlessly referring patients to brick and mortar facilities. The app interface can also be personalized with nudges and other follow-up guidance for the patient based on their history to better emulate the relationship building that takes place over years in a doctor's office, rather than being positioned as simply a one-time online transaction.
3. Integrate with offline and incumbent models. From a customer journey perspective, how online medical services can provide the most value in acute care through the likes of triaging and post-visit follow-ups is still yet to be seen. Online medical services must work closely with hospitals and regulators on system integration, data sharing, and the like to achieve a smooth transformation. According to Oliver Wyman analysis, in a global market, deploying "lite" digital/virtually supported models can achieve 5 to 10 percent cost-of-care savings, or up to 10 to 20 percent if deploying a combination of digital and in-person models.
COVID-19 has helped fast-track online health innovation out of necessity. But we shall see whether those users and use cases will be sustained when we return to “normal.” Online medical services can also be expanded by focusing not only on the typical encounter-based medical model in China but also catering to a more personalized “nudging” and automated care navigation and triaging model. There is also much potential for online medical services to support epidemic control, public safety planning, or even stimulate the development of other industries, such as insurance and pharmaceuticals.
The next generation of online medical services is already at our doorstep. The next wave of growth in this emerging industry will be determined by how much they can adapt to the world post-COVID-19.
Kitty Lee Partner, Health and Life Sciences, Oliver Wyman
Matt Zafra Principal, Health and Life Sciences, Oliver Wyman