Is HealthTech the New Fintech?
The number of hospital beds available for every 1000 people across emerging markets is under 1.5 – less than half of the developed economies’ average of 4.9, resulting in a staggering shortage of care. Even worse, the number of physicians in Sub Saharan Africa per 1000 people is only 0.2 compared to 3.7 for the EU. Clearly, the healthcare inclusion gap between emerging markets and developed economies is a factor of multiples, not increments, begging the question: is it even conceivable to provide healthcare for the billions of people in emerging markets?
Too often, we read that it is difficult to access or too expensive and unprofitable to serve the middle and bottom parts of the global population pyramids. But is that true? The lack of healthcare access and inclusion is reminiscent of the issues raised around the lack of financial inclusion in these markets in the early 2000s. Just as building more banks was not the solution to ‘banking the unbanked’, building more hospitals and medical centers will not be the solution to closing the healthcare inclusion gap. So what lessons could healthtech learn from the fintech experience in order to democratize access and affordability to healthcare?
1. Leapfrog: build on existing infrastructures
Fintechs enabled financial inclusion by leveraging existing telco infrastructure
Fintechs did not replace the banking systems in emerging markets; they augmented them. The opportunity for technology to create financial inclusion was partly driven by acknowledging that a large part of the population was not being served by the existing banking system. Fintech did not have to compete with the existing banking system but rather improve their accessibility to populations that were inefficient to serve. For example, mPesa leveraged the telco infrastructure to create millions of mobile e-wallets for people who didn’t have bank accounts. Similarly, the healthcare system in many emerging markets leaves billions of people without access, and therefore digital health solutions have the opportunity to augment (not replace) the existing health infrastructure. In doing so, companies can leapfrog, leveraging telehealth and AI to enable doctors’ decision making and diagnostics resulting in increased primary care access for people around the world.
2. Mobile first: deliver access (physically and financially)
Mobiles and eWallets replaced Cash, Cards, Checks, and ATMs
With roughly US$2 billion transacted daily in mobile money, cell phones brought financial services to consumer fingertips. Cell phones became pseudo ATMs, allowing consumers to conduct financial transactions conveniently and on-demand. Likewise, cell phones can act as the first point of communication between patients and practitioners becoming the first stop to managing health and healthcare access. Healthtech will bring immediate and seamless healthcare to patients through affordable solutions such as telehealth and telemedicine. In the finance world, customer data and usage patterns helped provide a comprehensive track record for institutions and governments while benefitting the consumer with increased access to financial services. Similarly, electronic medical records (EMRs) will transform the healthcare services industry by coordinating care between institutions, leveraging technology to better understand medical histories and designing personalized treatment plans ultimately resulting in improved patient outcomes.
3. Collaborate with incumbents: public and private, leaning into consumer adoption and transparency
Central Banks worked closely with banks & telcos to enable financial inclusion
While it was once inconceivable to enter your credit card information online, now your data is not only entered, but stored, on multiple devices. Similarly, consumer behavior around healthtech is shifting rapidly. The solutions that fintech companies offered outweighed the concerns around safety and privacy, and regulators supported the development of the new industry. Due to COVID, consumer adoption of healthtech has shifted dramatically over the last month, with regulators and payers supporting the development of telehealth companies and other digital health solutions in emerging markets, particularly where populations have very little access to any healthcare solutions. In fintech, digital platforms were partially consumer-focused (like Revolut and Robinhood), many focused on improving banks and the banking experience. We will see the same trends in healthcare’s transformation, with technologies such as EMRs, Remote Monitoring, and Clinical Diagnostics making for not only better experiences, but also overall improved patient outcomes. Consumers will use their mobile devices to manage their health as they now use them to manage their finances.
Amidst the devastating human suffering, the global COVID pandemic is providing a unique opportunity for the healthcare industry. The combination of regulatory change, insurance/payer acceptance, consumer adoption and technological advancement has created an inflection point. Unburdened by legacy systems, healthtech companies in emerging markets have greater scope to deliver better access, at reduced costs, and for improved outcomes, leapfrogging their developed counterparts.
In financial services, technology revolutionized the way banking and banking services are delivered and today, nearly 1.2 billion people who did not have a bank account a few years ago, do. It is now healthcare’s turn to revolutionize the industry and make it accessible, affordable, personal – and mobile. Given the state of healthcare in the US and EU, is it a far stretch to think that emerging markets can leapfrog legacy healthcare infrastructure and become leading change agents in the mission of healthcare inclusion?
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