The Covid-19 pandemic has accelerated the adoption of internet-based healthcare services. Growing in importance, penetration and acceptance, telemedicine will revolutionise and augment Asia’s healthcare systems. By Kathy Ng, Senior Equity Analyst, Nikko Asset Management.
Crises present opportunities to drive change
Global health crises and pandemics have caused considerable anguish, trepidation and devastation to humanity through the ages. But global outbreaks of infectious diseases—as history has shown—have also spurred widespread medical innovation, new vaccines and advances in healthcare services, as societies put in concerted efforts to combat the challenges.
The Black Death, which plagued Europe in the 14th century, resulted in better living and working conditions for the poor, according to academics, as governments became cognisant of the importance of public sanitation in the control of infectious diseases.
The 1918 Spanish Flu pandemic that killed an estimated 20 to 50 million people globally not only taught us that quarantine and social distancing were the most effective measures against the spread of infectious diseases; the “flu that changed the world” also revolutionised public health through the development of centralised public health systems, greatly advancing research in Epidemiology, Microbiology and Diagnostics. Over time, this has brought about significant improvement in patient care and established the foundation of modern medicine as we know it today.
In the future, we will likely debate the lessons learnt from the ongoing Covid-19 pandemic.
Over the past eight months, we have witnessed a plethora of healthcare-related innovation that facilitates greater social distancing in the electronic age. Some examples include patient-facing apps, wearable devices and wireless sensors for patients, rapid diagnostic kits, remote patient monitoring and many others.
More importantly, the current pandemic has accelerated the adoption of internet-based healthcare services or telemedicine, which allow patients to have online consultations with physicians and medical experts via video conferencing, followed by the delivery of electronically prescribed medication direct to their homes.
The push to digitalise healthcare delivery
To be sure, the global health crisis at hand has forced healthcare systems around the world to prioritise and mobilise resources to treat an outsized number of patients with the coronavirus, while minimising the threat of infections.
With traditional healthcare systems currently facing stress, many countries have turned to digital technology as a conduit to deliver contactless medical services to nonemergency patients.
Indeed, telemedicine not only helps to minimise Covid-19 exposure between patients and doctors, as well as curb the spread of the disease, it also frees up valuable hospital resources and capacity to treat cases that require in-person interaction with the doctor.
To incentivise people to use online medical consultations, governments of several countries, including some in Asia, have also allowed medical reimbursement under universal healthcare insurance schemes for users of telemedicine.
In our view, seeing a doctor via tele or videoconferencing could become part of a “new normal” even in a postpandemic setting. Growing in importance, penetration and acceptance, internet healthcare services is beginning to revolutionise and augment Asia’s healthcare systems.
Asia’s current healthcare delivery model isn’t sustainable
Supporting Asia’s future healthcare needs will be a strain given today’s centralised healthcare model, which is laden with long lead time, high costs and poor access. The rising life expectancy in Asia and the growing healthcare demands of large and aging populations in many regional countries are other factors that are increasingly putting stress on the healthcare systems in Asia.
First and foremost, the region’s life expectancy, which has risen by almost 20 years over the past five decades from 55 years1 in 1970 to the average of 74 years1 in 2019, is likely to continue to increase going forward. .
With declining fertility and increased longevity, the relative size of older age groups versus younger age groups looks set to increase significantly, putting considerable strain on the region’s healthcare systems.
The current healthcare delivery model in Asia (see Chart 1) is generally characterised by:
- Long lead time (or amount of time from the start of a process until its conclusion) due to the need to travel to access medical services; long waiting time at clinics and the emergency rooms; considerable lag time for diagnostic tests; and lengthy scheduling time for specialist consultations.
- High costs of consultations, prescriptions, diagnostic tests and hospitalisation.
- Poor access of the masses to pertinent medical services, which are constrained by availability of physicians and specialists.
Due to these drawbacks, which are exacerbated by the region’s aging demographics, the “old normal” of healthcare delivery in Asia is unlikely to be sustainable over the long term in our view. We think that Covid-19 offers the opportunity to rethink, reset and revamp the existing healthcare delivery model in Asia in order to offer greater convenience, better accessibility, lower costs and higher standard of care to patients in Asia as well as to cater to the unmet healthcare demand in certain countries.
