Global healthcare IT – tracking policy, defining concepts and tapping markets.

Author: Dr Akmal Bhatti – Director Strategy Consulting

Governments worldwide, continue to recognise the need for large scale investment in health care information technology infrastructure. This recognition comes from the understanding that the positive benefits of ICT advances can be brought to bear on the improved health standing of the general population. Some experts within the healthcare IT area argue that clearly defined and strictly enforced high-level policy initiatives are necessary to fuel wider adoption of ICT within the health sectors. On the global scale, Malaysia is the country with arguably the most public and clearly defined policy statements in this area,is putting into place systems and infrastructure which will address the requirements laid out in the 1997 Telemedicine Act and the 2000 National Telehealth Policies statement. The United Kingdom can also be considered to be one of the few countries in the world which can lay claim to having clearly defined IT implementation policies directly targeting the needs for secure information exchange within the health care sector. Elsewhere, the Nordic countries, Canada, Australia and New Zealand are identified as having governments that prioritise e-Health strategy with a view to facilitating more efficient health care delivery.

Assessment of the individual country policies reveals the close monitoring by government policymakers of trends in IT strategies and implementation efforts in other countries. For example, the NHS Information Authority in the UK has in some of its current literature clear reference to its monitoring of health IT policy in New Zealand and Australia and the potential utilisation of this knowledge in mapping or moulding future UK activity. One of the reasons why the UK can learn from developments in Australia and New Zealand stems from the fact that these countries, like the UK, have a national health service structure with a single payer for health service delivery. A consequence of this is that efforts with regard to building healthcare IT infrastructure can focus mainly on the development of computerised clinical systems and much less so on the concurrent integration of a range of billing systems as is the case in the USA. An important overall point here is the need for companies supplying into the healthcare IT arena to similarly track the historical and real- time policy decisions in the major global markets. This becomes necessary for planning marketing and sales efforts in individual countries which fully take advantage of the directional trends in health IT spending.

There will be some significant differences in how countries are planning the development of IT infrastructure as it relates to the healthcare sector. However, a fundamental piece of the infrastructure puzzle that can be considered a common element of each government’s policy and planning is the implementation of the electronic patient record (EPR) system. Reinhold Haux and colleagues (Int. J. Med. Inform. 66, pp 3-21, 2002) recently mapped out a range of theses investigating how healthcare provision might look ten years from now, in the year 2013. The underlying thrust of the arguments put forward by Haux et al were designed to highlight measures which political bodies, in particular, should pursue in order to provide a framework for networked, patient-centred health care. As well as the ever- present focus on EPR, Haux et al also emphasised the need for comprehensive research and development of modern health information system architectures, architectures for medical knowledge centres, medical data mining processes and multi-functional, mobile healthcare.

From this there is a clear inference that the integration of these components should form a sturdy backbone supporting the highest level of care for patients and satisfying the requirements of caregivers and payers. There is, amongst companies especially, the necessary increase in awareness of the need to cross-integrate the primary, secondary and tertiary healthcare sectors, acknowledging the assessment of the roles of mobile and home healthcare in the wider equation.

These discussions around networking and integration bring to mind the possible relevance of the Japanese government’s e-Japan Priority Policy Program to current thinking. Through this program the Japanese government is looking to put into place an IT infrastructure which it envisions will guarantee medical and nursing care for each of its citizens through the secure exchange of information through networks. There is nothing new here when considering this overall concept. However, HBS Consulting senses that the formulation of national IT infrastructure planning in Japan is likely to be influenced a great deal by advocates of the ubiquitous networking environment as a cornerstone of forward strategy and healthcare delivery. An adoption of this model for the planning and implementation of IT services and the anticipated success of the approach will likely lead to a spread of the idea through Asia and further afield. An understanding of ubiquitous networking and how it applies to healthcare IT can also form the basis of updating the conceptual mapping of the healthcare IT landscape. This in turn can assist in the forward planning of product development, marketing and sales most notably in the telemedicine, mobile and home healthcare sectors where the ubiquitous networking concept is expected to work especially well.

Ubiquitous networking and healthcare.

Within a healthcare setting a ubiquitous network represents an IT environment in which networks are equipped with three core features (broadband capabilities, always-on connections and mobile connections) and a wide variety of information devices such as personal digital assistants (PDAs) and tablet PCs connected by the most up-to-date internet protocol (IP). These “basic” telecommunications networks support platforms for the ubiquitous networks built around ubiquitous personal terminals (an interface between the users and the overall system), ubiquitous chips (sensors and information storage media attached to the patient) and ubiquitous exchanges (virtual locations charged with the linkage of service supply and demand functions) which are structured to enable the free flow and exchange of digital information.

The use of PDAs and tablet PCs in the US is expanding rapidly. In many medical schools in the USA, medical graduates are trained with the use of handheld PDAs from the beginning of their studies. Even for technophobe clinicians, the signs are that PDA technology, bringing with it the access of clinical data through wireless networks, is pervading general practice.

The mobility of these systems fits well with applications in the monitoring of patients within the home setting. We can envisage patients fitted with ubiquitous chips that measure blood pressure, heart rhythm, and blood glucose levels alerting physicians immediately to changes requiring medical intervention. Information is relayed upon open platforms with barrier-free but secure access via ubiquitous exchanges. As stated earlier the concept is seen as appropriate for use in the patient’s home. For patients, “home” can be their actual place of residence or a hospital.

In Europe, an example of research into the applicability and use of these types of systems is the UbiCare initiative in the UK. One of the projects undertaken by a consortium of academic and industrial partners is focusing on investigating the use of a range of body sensors for monitoring and prediction of abnormal cardiac function. Industrial partners involved in this particular project are Cardionetics and Medtronic. Other industrial partners involved in investigating ubiquitous computing applications for healthcare in the community include Orange, Telewest and Tyco.

There are no illusions as to the complexity of bringing the ubiquitous network concept to reality. The simplest ideas can be forced upon the most difficult of paths towards their desired realisation. The ingenuity of the Japanese warrants that the idea is taken seriously. The beauty of seeing things in their simplest form is that it becomes possible to imagine the application of this particular idea to the wider e-health platform. There is further reinforcement in the view here regarding the fact that collaboration and acquisition activity between companies in the healthcare IT sector will increase. No one company can dominate the e-health space as a range of technologies and industry tools need to be forged together to bring success.

The necessary brevity of this article does not lend itself to an in-depth analysis of the requirements of the various actors in the health care sector when considering the impact of greater IT use. In the simplest terms, caregivers wish to harness the power of ICT to improve their workflows, and payers wish to streamline the entire clinical, billing and payment operations. It is left to suppliers to satisfy these needs, and one is led to the question of which of the healthcare IT market sectors offer the major opportunities for suppliers. This question is posed at a time when the overall feeling is one of increasing momentum within the sector as a whole. HBS Consulting assessment of the healthcare IT markets throws up the viewpoint that domination of the market will remain with the multinational diagnostic imaging companies that gathered a foothold in this market with their developments of PACS systems in the 1990s. The most prominent of these with respect to overall market share are, in alphabetical order, GE Medical Systems, Philips Medical Systems and Siemens Medical Systems. Significant pressure will come from companies such as Cerner, EDS, IDX, McKesson HBOC. The continuous innovation arising from products developed within companies such as Cerner particularly in the clinical systems area will mean that companies such as this one will challenge very strongly for multimillion dollar contracts in the major markets.

Niche markets and expanded collaborations/ acquisitions

When discussing collaborations it is noteworthy to recognise how one of the niche markets in the healthcare IT area will thrive on the collaborations with pharmaceutical, medical device and bioscience companies. The area of e-Diaries is expanding rapidly in the US and Europe. In this sector, drug and device development is enhanced through the use of patient-centric data collection to support clinical trials. Arming patients enrolled in clinical trials with mobile technologies such as PDAs with software that collects, stores and transmits data to clinical investigators and healthcare industry trial sponsors provides the ability to reduce costs of trials and increase the quality of clinical data. The global market for e-Diaries is currently in the region of €52m and growing rapidly. Within Europe this market involves key players such as CRF Box, Coronaria Oy and Symfo SA. As pharmaceutical companies in particular expand their collaborations in this sector and as the switch to electronic data capture of clinical trails data overtakes the less efficient paper based data gathering the market is set to become a major sector in the healthcare IT universe. HBS Consulting notes here that Siemens Group is an investor in the Symfo SA venture.

A final word on collaborations and acquisitions by way of forecasting is the belief that cross-border collaboration and acquisition activity will increase. We take as an example here the impressively executed expansion strategy undertaken by Torex Healthcare within the last five years. From being the market leader in the provision of IT applications to the primary care sector in the UK, Torex has extended its reach both from the product viewpoint and geographically as the table below shows.

HBS Consulting believes that within Australia and New Zealand there are a number of companies that have acquired leading edge software capabilities relevant to the healthcare IT sector which may be of interest to other global players. An interesting further development with respect to Torex is the planned merger between that company and iSOFT in the UK, itself an important participant in the EPR space. The HASS solution is expected to complement the combined companies’ product strategy in the event of a successful completion of the merger. Prior to the proposed merger with iSOFT, HBS Consulting has always considered Torex to be a prime candidate for acquisition by one of the major healthcare IT players. In light of the expanded clinical and financial systems portfolio and geographic presence HBS Consulting anticipates interest in the iSOFT/Torex package could conceivably come from the likes of company’s such as Kodak and Agfa Healthcare which could benefit from the synergies on offer. HBS Consulting would stress at this point that these views are expressed purely from a consideration of overall market dynamics and do not stem from conversations with the companies quoted.

The buoyancy of the healthcare IT market and the emergence of new niche market sectors makes the monitoring of markets and corporate activity in this sector incredibly exciting.