The Orange glow of health

In 2006, the then Orange CEO Didier Lombard asked executive Thierry Zylerberg to conduct a strategic review of opportunities for business growth in a variety of vertical sectors. Zylerberg concluded that the health sector offered Orange great potential. The sector’s IT infrastructure was underdeveloped, leaving an opening for the telco to leverage expertise in integrated systems and service management.

In line with these findings, Orange Healthcare was set up in 2007. While the carrier had been working with the medical sector in France, this was the first time a group-wide initiative had been established to tackle the market internationally. E-health is now one of the central pillars of the Conquest 2015 strategy that Orange unveiled in 2010.

Zylberberg says that three key drivers have propelled e-health to prominence in recent years; the increasing cost of healthcare provision, the growth in chronic disease and intensifying demand in markets where populations are spread across large areas.

“The cost of health is exploding around the world, and all health systems are desperately trying to find ways of bringing that cost down—or at least trying to control the explosion,” he says. “Improving IT is one way of doing that. Meanwhile we have the rise of chronic disease, which is linked to the fact that the global population is ageing.

“This creates a structural change in the way that health expenses are handed out. More and more money is being spent on long term illness and less on acute care. Managing long term illness is about treating the patient without them needing acute care.

“Finally, there is the scarcity of doctors in many countries, which is creating the demand for different forms of remote medicine,” he says.

While Orange has identified a clear opportunity, Zylberberg says it is crucial for carriers to play to their strengths in e-health, and exploit the expertise of partners wherever possible.

“We can provide the ecosystem with two things: Transport and the safe hosting of medical data,” he says, “and the integrated systems you need to do that. I believe that if you step outside of this main strategy, then it becomes more risky.”

In Paris Orange has worked with the French capital’s regional health authority on a project to digitise all of the authority’s medical imaging. In future the carrier will store and archive all patient imaging, a service it is providing in partnership with GE Healthcare. “They have the software competence and knowledge to do that and I don’t see why we would try and replicate that knowledge,” Zylberberg says; “they’re far better at it. On the other hand, we know how to transport and store all of this information securely—this is our forte.”

Reliable security is essential when it comes to medical data. The French Government has put a law in place requiring any company that wishes to host third party medical data to have permissions from the government to do so. Zylberberg says that Orange, which certified to host medical data in October 2010, is the only mobile operator to have been approved by the government so far.

Such regulations vary substantially from country to country, highlighting one of the key issues for an international carrier like Orange looking to address the e-health market across its footprint. “We need to conform to the very specific rules and regulations in each market,” Zylberberg says. “One less on you learn very fast in this space is that there is no global health system, only a series of national ones, and you have to have a country by country strategy.”

That said, Orange groups its e-health activities into three segments for all of the markets it targets—and the highest level of these sectors actually allows for the sharing of medical data across national boundaries. Health Professional Services allows for medical images to be analysed and diagnosed remotely, even from one country to another. Zylberberg explains:

“We have developed an application in partnership with another French company that specialises in analysing cell and tissue samples. A surgeon operating on a  tumour, for example, needs to take wide margins around that tumour to minimise the chance of it reoccurring. The tissue has to be analysed at the same time as you’re doing the surgery to tell you whether you’re in healthy tissue, or whether you need to take wider margins,” he says.

“This is a speciality where doctors are very scarce, so we’ve put together a system that allows you to share a very high quality image with a remotely located doctor who can look at the image and make the diagnosis.”

Below Health Professional Services is the second of Orange’s sector, Health Management. This deals with information transfer between the patient and the health professional. Common examples include the remote monitoring of blood pressure, heart rate or—in the case of diabetics—glucose levels. The third sector is purely patient oriented and is concerned with prevention and wellness; with consumers monitoring their own health for their own purposes.

Part of the reason for the creation of these three spheres is the thorny issue of payment. Who should foot the bill for e-health services is one of the most complex problems the ecosystem faces. While some markets have state provision for healthcare, others are insurance-based, for example. Different services benefit different organisations or people, meanwhile, and consumers themselves are not always willing to up their spend, whatever good it might do them.

For Health Professional Services, Zylberberg says, the health providers must pay, as the services are designed to improve their efficiency. The subscriber-focused prevention and wellness play is targeted at the consumer, and the consumer is expected to pay. But for Health Management, the situation is not so clear.

“There is no stabilised business model for this in the e-health sector,” says Zylberberg. “But everyone seems to be converging on the fact that the insurer has to be the one that pays for the system, because somehow it’s a way of improving the health of the patient, and therefore lowering the insurance risk of that patient,” he says.

In part the business models are delayed by the need for proof that these kind of services do in fact have a positive impact on patient health and the associated costs, Zylberberg says. “A lot of studies have suggested efficiency improvements of around 15 per cent,” he says, “but it is not yet generally accepted. But it will come, I am convinced of that.”

In the high end, there is already proof of the benefits of e-health services, he says. The medical image digitisation project in Paris is halving the cost of image storage, he says. Film images are stored at a cost of €5/image, illustrating the scope for improvement, he says. “If you look at the way health is organised today, an awful lot of it is still done manually, and not to very high quality levels. Just putting in a basic information processing system can improve the quality.

Ultimately, e-health is constrained by the performance of the communications networks that it uses. Mobile networks, even in the most mature markets, can be hugely unreliable, which means that the health sector can never guarantee their ability to use them, even with SLAs in place. This, says Zylberberg, is another reason why carriers need to fully understand their limitations.

“Telecom networks are not suited for real-time applications one hundred per cent of the time,” he says. “You’ll never get that level of service, or you’ll get only at such an extraordinary cost that will mean it doesn’t make sense. So you have to stay within the boundary of monitoring and delivering information. The life of a patient cannot depend on real time information being sent over the network.

“What you do need to do, though, is to make special provision to ensure that you have a security and privacy level that is above and beyond the one you would have in place for normal services. This is where the carriers need to invest.”

Investment is dependent on revenue, of course, so what does Orange see as the potential in this space? “For the time being our revenue comes mainly from Health Professional Services,” Zylberberg says. “That accounts for about two thirds of our revenue and it’s growing at a double digit rate. If I look at the whole of the health segment, including the tradition services we provide to health providers, like voice and text, then the whole segment would be a bit less than €1bn for the group.” Group revenues for Orange in 2010 were a little over €45.5bn.

The health ecosystem is very intricate and very complex, Zylberberg says, and is made more so by the fact that each element within it has incentives and dynamics that are not aligned with the other elements. This makes change a slow process, as any evolution has to be holistic, he says. “When you want to change it you have to change everything at the same time. If you push just one bit of it, you will not change the whole ecosystem.”