Healthy Prospects

The telecoms and healthcare sectors are not without their similarities. We hear much of the challenges faced by operators with disparate silos of information within their business. They have to manage billing, rating, network performance, quality of service, applications, customer care and so on. The health sector, meanwhile, has evolved to create a far larger, and far more delicate collection of data and expertise silos of its own. But instead of frontline infrastructure and back office systems, these silos concern vital organs—the heart, liver and lungs—and other areas of medical speciality, like orthopaedics and vascular medicine. Prod your body, and you’ll hit something that has its own silo. In their structural complexities the two sectors are related.

One of the central historical problems within the healthcare industry would be instantly recognisable to any mobile operator management team. Doctors with different specialities have not been good at communicating with one another about their shared patients. Huge volumes of data have been gathered but not put to work; not exploited in an integrated way to improve the efficiency and quality of performance of the healthcare provision network.

Advances in IT have not necessarily helped this situation. The evolution of a trio of key technologies— storage, broadband and processing—have greatly increased the volume of data that healthcare providers are struggling to manage. Information volumes in the healthcare sector are currently doubling every six months, says Chris Wasden, head of Global Healthcare Innovation at PricewaterhouseCoopers. “You think Moore’s Law is rapid at 18 months,” Wasden says. “Data in healthcare is growing three times faster.”

The explosion in healthcare data can not be attributed solely to the advent of new technologies, though; there is a more fundamental driver at play. The global population has been growing, ageing and getting sick, meaning that there is simply more data to collect.

And this problem is not going away. According to the World Health Organization, between the years 2000 and 2050, the number of people worldwide aged over 60 will grow from 600 million to two billion. As the population ages, more and more people are living with chronic disease, shifting the focus of the healthcare sector from acute care—battling illness that is serious but brief or episodic—to the ongoing management of long term conditions like heart disease, diabetes or high blood pressure.

While advances in technology have contributed to the data management issues facing the healthcare sector, Chris Wasden says that—as an industry— healthcare is a laggard when it comes to IT. He estimates that healthcare is some ten to 15 years behind sectors like manufacturing and finance in the adoption of IT and that it has significantly underinvested in what to most industries is a priority area. In terms of its information processing, Wasden says, the healthcare industry, “hasn’t changed much in 100 years.”

There are logistical issues, too. The ageing of the population will be most keenly felt in populous, emerging markets like China and India. In many developing markets there is a shortage of doctors, often combined with a geographically widespread population. It can be extremely difficult, in some cases impossible, to get a patient to a face-to-face consultation with a doctor.

In mature markets like the UK, or Japan, where access to healthcare is comparatively straightforward, with no shortage of hospitals, the problems are with the cost of provision, rather than with the ability to provide. Cuts to public services are rife in European markets as healthcare providers struggle to make their numbers add up.

“The cost of health is exploding around the world,” says Thierry Zylberberg, executive vice president of Orange Healthcare, a central division set up by the French group in 2007. “All health systems are desperately trying to find ways of bringing the cost down, or at least trying to control the explosion.” With these factors in mind, it’s no surprise that health is seen as one of the most important verticals to be addressed by communications providers. As Jose Perdomo, director of the Global eHealth Business Unit at Telefónica points out in the interview on page 10, healthcare providers are desperate to “improve efficiency, sustainability, quality, access and reach.”

On the face of it, telcos—and in particular mobile operators—have the answer to a lot of these problems. But it is perhaps a little strange that the health sector shouldn’t be looking to solve these problems for itself. Rainer Herzog, head of healthcare and strategy at Ericsson offers a blunt assessment of the situation. “I think the healthcare industry lacks people that are ICT-minded,” he says. “We’re looking at a complex ecosystem here where, in order to make the whole thing work, you need competencies from different sides. The traditional healthcare players just don’t have the competence and the knowledge to drive this.”

As operators become increasingly central to the provision of healthcare, it is conceivable that government subsidy could be an alternative means of reimbursement

While Herzog’s view is shared by many, there is an important distinction between the healthcare institutions and the doctors working within them, says PwC’s Chris Wasden. A recent survey of the US health sector carried out by Wasden’s Healthcare Research Institute  showed that physicians have been inspired to bring the mobile technology they use as consumers into their professional lives.

“Doctors are buying these iPhones, iPads and Androids on their own nickel because they want the latest gadgets,” Wasden says. “Then they walk into the IT department and say ‘I need you to put all of the information we have in the IT organisation on my phone’.

Traditionally, IT in the health sector would provide a new solution and push it onto doctors, who would resist. Now you find doctors starting to use these devices faster than they can be supported by their IT departments.” Which opens the door for the mobile operators. They, after all, are already selling basic connectivity services to hospitals and health organisations—and have been doing so for many years—as part of their basic enterprise play. And they are selling doctors the consumer products that they want to take professional. But they cannot serve this sector alone. Operators may have the relationships and the technology—but they can’t cover all the bases in this complex ecosystem.

Thierry Zylberberg says that Orange is working with GE Healthcare on a project to archive medical images in France (see box). “GE has the software competence and the knowledge to digitise the images and I don’t see why we would try and replicate that knowledge,” he says. “They’re far better at it than we are. On the other hand, we know how to transport and archive all this information safely and securely, and this is our forte.”

It’s an illustration of the importance of partnership in m-health. Application development, industrialisation, billing, CRM, even systems integration can all be done by specialist third parties. Orange’s Zylberberg and his opposite number at Telefónica, Jose Perdomo—and these are two of the most established telcos in the space—are adamant that the operators should stick to areas where they have proven expertise. It’s a lesson carriers have learned at their cost in the consumer content and application space.

This need not mean they have to be anonymous cogs in the machine, however, says Ericsson’s Rainer Herzog. “Operators must take on the role of driver in this sector,” he says. “In some discussions we have some of them still seem to have the attitude that they should just be pipes, or enablers. But if they want to be a serious player in this space then they must accept that they have to be the drivers.”

This is certainly the role that Jose Perdomo is embracing, with Telefónica even refusing to provide single elements of the service. “Some clients say they just want us to manage the devices and we say ‘no’. Some say they just want connectivity—but the point is the integration of the service; it’s critical for us to manage the service end to end,” he says.

So how are carriers structuring their approach this market? Telefónica splits its e-health operations into three areas. Health ICT covers the enterprise services provided to hospitals and other health organisations, TeleCare covers family trackers and panic buttons and TeleHealth gets to the nub of the e-health proposition, linking patients and patient data with remote physicians in a series of projects.

At Orange the structure is slightly different and does not include the basic enterprise services that the firm provides to hospitals and other healthcare institutions. The top tier, Health Professional Services, deals with applications that connect physicians with one another, enabling them to share useful information, sometimes even during surgical procedures. Below that, Health Management covers the exchange of data between patients and doctors, enabling remote monitoring of metrics like glucose levels in diabetics or blood pressure levels. The third element of the Orange play deals with prevention and wellness, and tends to be purely local and patient-centric, says Zylberberg.

Whether there is any room for carrier brands in the array of mobile health products and services is a subject for debate. Orange’s Zylberberg argues that operators should stop short of having a consumer play, suggesting that products could be sold as “powered by” a particular carrier, if they have any patientfacing presence at all.

On the other hand, PwC’s Chris Wasden urges operators to take a lead in the sellthrough of mobile health services to the end user. As part of its recent US market survey, PwC’s HRI spoke to 1,000 consumers in the US about what they would be prepared to spend on mobile health services. The result was somewhere between $5 and $10/month—it might not sound like much, but Wasden argues that carriers should pursue it.

“If the consumer is willing to pay that much for a healthcare bundle of services, that’s a ten to 20 per cent improvement on an operator’s monthly ARPU,” he says. What other services is a telco going to provide to a customer that yields that percentage improvement in their monthly ARPU?”

It’s not that simple, however. Billing is difficult enough for mobile operators but it takes on a whole new level of complexity in the mobile health space; not least because it’s not always clear who should be billed. For services provided to healthcare institutions as enterprises, the approach is straightforward. These services are designed to improve the efficiency of the institution, so the institution pays. For services that involve the deployment of equipment to the patient’s home there is no such obvious solution. “There is no stabilised business model, and everyone seems to be converging on the fact that the insurer has to be the one that pays for the system, because if it improves the health of the patient, then it lowers the risk on the patient,” says Thierry Zylberberg.

This only applies in markets where healthcare is funded by insurance, however. In much of Europe and in many developing markets, health is state-provisioned, so these services would require funding from government or the healthcare sector itself. Chris Wasden says he is “starting to see some movement” in government funding of these solutions.

As operators become increasingly central to the provision of healthcare, it is conceivable that government subsidy could be an alternative means of reimbursement. “Should a telecom operator competing for a license gain priority if it commits to free or discounted healthcare services across its infrastructure?” asks Informa analyst Camille Mendler. “Should such an operator also face a lower financial burden for market entry in view of its community-wide contributions? On these issues governments and regulators remain largely silent, but we believe that this discussion must occur.”

In China, where the largest remote patient monitoring pilot is currently running, involving 100,00 patients, access to care is far more of a driver

There is one key factor acting against mobile operators billing consumers directly, which is that healthcare providers want to be able to reach their entire market, and not just that part of the market served by one operator. Given that they are not likely to strike partnerships with every carrier in a market, mobile operators looking to work with healthcare providers are better served taking their revenue further up the chain. The confusion over billing illustrates one of the wider difficulties of the m-health sector, the provision of services across national borders.

There are enormous differences between different countries’ healthcare provision systems, in terms of technological advancement, funding and resource. For mobile carriers used to addressing multiple markets with essentially the same set of services—dependent on scale for the performance of their business— this represents a challenge.

“One lesson you learn very fast is that there is no global health system, only a series of national health systems, so you have to have a country by country strategy,” says Orange’s Zylberberg. “This is an advantage for telcos that have a lot of knowledge at local operating companies.”

Some argue that the differences between various markets should be looked at in terms of the drivers rather than the difficulties, though.

In the US many doctors aren’t paid a salary, instead charging fees for each patient seen. These doctors aren’t going to be interested in technologies that reduce the number of patients that they have to see. But they will be interested in reducing the cost of seeing each patient.

In China, where the largest remote patient monitoring pilot is currently running, involving 100,00 patients, access to care is far more of a driver. As Chris Wasden says: “Remote patient monitoring, teleconsultation, video communication, these types of solution you see in China, India, the US, Canada and Europe. The difference has to do with the pain points in the countries.

The mHealth Alliance’s Jody Ranck suggests that mobile health solutions ought to be scalable because they can be adapted for deployment in other sectors, multiplying the returns on the work involved in their development. “An application used for data collection in healthcare could also be used in anything from agriculture to citizen reporting,” he says. “We think of telecom as a platform-as-a-service.”

The opportunities for operators in this space are unquestionable, even if the exact models have yet to be defined. There is an increasing conviction within the health sector that communications will be fundamental to the future of healthcare and, with the wider move to cloud services and the restrictions on funding for healthcare, the sector itself is not going to develop services internally when it can outsource to a partner.

Thierry Zylberberg says that Orange is currently deriving slightly less than €1bn in annual revenues from the healthcare sector worldwide, although this includes revenues for standard enterprise services. Jose Perdomo talks of hundreds of millions of Euros in revenue for Telefónica as it looks to commercialise the projects it has been working on.

What seems crucial is that operators manage the ecosystem, much as, say, Apple has with its App Store. They need to ensure the availability of a wide range of services, they need to make sure they can be billed for with transparency and they need to ensure that everything works in harmony with everything else. It’s no mean feat, but the opportunity to control this value chain is open to them in a way that the application store model that they were trying to generate for so long is not.

Taking care of the data

Data is the big issue in m-health. There’s either too much of it to manage, or too little to interpret, according to Jody Ranck, director of thought leadership, policy and advocacy at the mHealth Alliance. Launched in 2009 by the United Nations, Rockerfeller and Vodafone Foundations, the Alliance works to develop interoperability, scalability and sustainability within mobile health deployments.

The aim, Ranck says, is to improve the lot of developing nations that are “struggling under the weight of heavy, legacy health infrastructure where interoperability is very minimal and systems are expensive and without promise.”

While there is a mass of information to be extracted from silos within the health sector, Ranck says, there is a shortage of evidential data on the performance of mobile health technology in trial and live deployment. “We need to gather evidence to show what works and how it works under different conditions. But right now qualitative and quantitative data is quite scant, so one of the solutions we’re developing is the creation of an evaluation commons to bring together the health researchers themselves.”

What’s needed, he says, is a change in the way the health sector uses data, and the kind of data it uses. “Researchers traditionally favour randomised clinical trials, which are very complex and take years to complete,” he says. “The problem is, by the time the research is complete the technology has moved on. So we needed to develop lighter weight research methodologies to gather data more rapidly and use higher population samples, too.”

As this process of development is ongoing, a “deluge” of data from the digitisation of medical records is imminent, Ranck says. For him, “health data is health care”, so the gathering of the data and the understanding of how to use it, close to real time, is at the heart of progress within mobile health, and thus the wider healthcare sector.

It’s a view that chimes with comments from PricewaterhouseCoopers’ Chris Wasden. “In the end, people always change their behaviour based upon information,” Wasden says. “So if you want people to have better habits or behaviours, resulting in less chronic disease, you need to gather and share information.”

Healthcare data is not limited to information about patient’s medical condition, though. Ranck says that data moved into the healthcare system can be used to improve performance in back office areas such as supply chain management, human resources, surveillance systems and finance.

A patient might visit their pharmacy and find that the drug they want is out of stock, even though the pharmacy in the next village might be carrying a surplus, for example. “Current supply chain systems and warehousing are based on very little data and uninformed projections,” he says. “Data and inventories don’t move horizontally through the system.” The best way to address this, he argues is to build “bottom up IT systems” to improve inventory management.

There are serious consequences to shortcomings in this area, he says. In some countries, poor supply chain management results in as much as 50 per cent of malaria drugs being counterfeit.


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