Asia is poised to see rapid healthcare transformation due to shifting demographics, increasing consumer expectations, technological innovation, and a limited legacy infrastructure. These factors, taken together, could allow governments, payers and providers to rethink healthcare delivery and management. These trends are driving the creation of consumer-centric digital health ecosystems across Asia at an unprecedented rate and scale. Digital health has a significant impact on more than one billion people. Estimates show that Asia’s digital expat medical insurance in China ecosystems could create $100 billion by 2025. This is up from $37 million in 2020.
Asia’s health ecosystems are thriving
Health ecosystems can be enabled by digital but they are not solely digital. They integrate both digital health services and physical health services. Due to the complexity and breadth of health ecosystems, they are not possible to be captured by one entity. Instead, they typically have a central orchestrator that is anchored around a few business models. To cover more of the care continuum, they manage multiple partners such as brick-and-mortar healthcare providers, start-ups in healthtech, and vendors.
Orchestrators must also learn from the promising trends and fundamentals. To build a successful ecosystem, it is essential to align interests and connect multiple stakeholders (for instance, government, payers, providers, physicians, and patients). It is also important to analyze the pain points of each participant (down to the operational level). A digital ecosystem is not just about an online approach. To build the care continuum, and to achieve the best outcomes, it must integrate both offline and online resources. To ensure sustainable development, each business model must have at least three functions: flow generation, transaction conversion and profit creation.
When building digital health ecosystems, here are some key questions
We believe there is still significant opportunity to expand the reach and breadth of Asian health ecosystems, despite the impressive impact numbers achieved by many health ecosystem players to date. It is crucial to capture value in this emerging market. The winner-takes-all dynamics of ecosystem-based marketplaces favor the first movers and fast followers. Potential health ecosystem orchestrators need to ask the following four questions:
What is the source for advantage? The control point is the key to success for ecosystem players. Tencent and Alibaba, two of the world’s largest consumer technology companies, use their existing consumer platforms to provide access to health-related services. Ping An, AIA and Prudential are just a few of the many payers that have tapped into their vast distribution networks and gained access to patient claims data to create service offerings. Providers, like Apollo, can also leverage their trust in the health sector and access to doctors.
What partnerships and strategic capabilities should be built? The ability to quickly strike partnerships is crucial for ecosystem orchestrators in expanding their services beyond what they can do. Halodoc, for example, partners with GoJek in order to take advantage of GoJek’s vast transportation network to deliver medication to patients at home across Indonesia. This is a service that the company would not be able to develop by itself. Tencent partners directly with healthtech start-ups or pharma companies in order to develop AI-based diagnostics.
How long do you have to wait before investing? Because healthcare is complex, it takes significant investment over a long period of time to create a partnership network and user base. Ping An Good doctor, for instance, saw revenues rise by 35.5 percent between 2019 and 2020, but still suffered an adjusted net loss of $80 million in 2020, six years after its founding. Ping An notes, however that between 15 and 20 percent of their new customers are sourced each year from their healthcare network. Companies looking to build health ecosystems should not be looking for immediate profits, but rather look at core business synergies and growth metrics as key indicators of platform success.
How will stakeholders interact with regulators and government healthcare priorities? COVID-19 led some local governments to trial online healthcare delivery and virtual health. However, they are still evaluating the implications for privacy, compliance, and data security. Collaboration with local governments in the development of digital health solutions can accelerate adoption and capture value.
