Can health tech close the care gap in emerging markets?

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− Telehealth market continues to grow after Covid-19 pandemic boom

− Digital solutions expand access and decrease costs in emerging markets

− Services and technologies including artificial intelligence are driving specialisation

− Private-public partnerships at the forefront of health tech development

After a surge in uptake during the Covid-19 pandemic, the telehealth industry is courting new investment to further innovation and increase access to care in emerging markets.

Digital health companies raised a record $15bn in global venture capital funding in the first half of 2021, up 138% year-on-year, with 30% of the total directed towards telehealth.

An estimated $140bn in private sector finance will be needed annually between 2015 and 2030 to realise the UN’s health-related Sustainable Development Goals, according to the UN Conference on Trade and Development, underscoring the importance of boosting spending commitments in the global health tech space.

Telehealth in emerging markets

As the health tech market in developed countries matures, emerging markets offer avenues for digital health technology to expand access to care and improve patient outcomes, while also bringing down health care costs.

In sub-Saharan Africa, for example, some countries have as few as 0.23 doctors per 10,000 people, according to the World Health Organisation.

Investment in low-cost, high-impact fields such as telehealth could help to bridge this gap, however, with Africa’s health tech market on course to reach $11bn by 2025.

Ghana has hosted several health tech initiatives in both the public and private sphere. While the Ministry of Health and the Ghana Health Service set up teleconsultation services as early as 2016, in collaboration with the Swiss Novartis Foundation, the West African nation’s e-health transformation has more recently been accelerated by Covid-19.

In October 2021 a local health tech start-up, mPharma, announced plans to construct 100 virtual health centres in seven African markets – namely, Ethiopia, Ghana, Kenya, Malawi, Nigeria, Rwanda and Zimbabwe. Backed by Silicon Valley-based Breyer Capital, the start-up raised over $50m between its founding in 2013 and 2021.

In the last year mPharma’s partnership with Gabon’s strategic investment fund, geared towards building drug supply infrastructure, has saved the country an estimated 30% in procurement costs.  

In February Nigerian health tech start-up Reliance Health raised $40m in its Series B funding round, the largest amount raised in a single round to date in Africa.

The company offers subscription-based health plans to its customers and manages telehealth services, a drug-delivery system and two clinics in Lagos. Like many health tech start-ups, it also serves as a link between patients and third-party care providers such as hospitals, diagnostics centres and pharmacies. Around 90% of Reliance Health’s revenue model focuses on the business-to-business segment, notably corporate health care plans for employees.

The future of health

Many countries are leveraging tools such as 5G, artificial intelligence (AI) and the internet of things to improve patient outcomes, reduce medical staff burnout, and lower health care and operating costs.

In India, AI-powered predictive analytics are enabling early detection of health conditions such as diabetes and cancer. These technologies could be integrated with portable screening devices to provide early testing for underserved rural areas, where 70% of the country’s population lives.

India’s health care sector is set to reach $372bn this year, and the integration of data and AI in health care could add an estimated $25bn-30bn to GDP by 2025.

Internet connectivity plays a fundamental role in health tech expansion into underserved areas.

Since 2016 a strategic partnership between several Spanish NGOs, the Pontifical Catholic University of Peru and the Development Bank of Latin America helped establish 13 health centres in the Peruvian Amazon, providing a population of 8500 people with access to telehealth, largely through the expansion of broadband services. 

The private sector is also developing connectivity solutions. East African start-up Rocket Health, present in Uganda and Kenya, provides some 400,000 virtual consultations a year, both over the internet and via a USSD service for patients without internet access.

Meanwhile, Saudi Arabia is set to become the fastest-growing digital health market in the GCC, with $1.5bn of investment earmarked for health care IT and digital transformation programmes to help it meet the country’s Vision 2030 objectives.

In February the Kingdom launched the SEHA Virtual Hospital network, the largest of its kind with 130 affiliated hospitals.

Enabling expansion

Valued at $1.8bn in 2020, the telehealth market in Latin America is expected to see a compound annual growth rate of 20.3% to reach a value of $5.6bn by 2026.

Colombia, for example, witnessed a 7000% increase in virtual appointments in 2020.

The use of Spanish in the region outside of Brazil could enable cross-border telehealth consultations, boosting access to and quality of health care in spite of local infrastructure gaps.  

The public sector is driving telehealth growth in the region, notably in Chile and Uruguay. In Argentina, telehealth is managed by the National Telehealth Plan and Telehealth Advisory Council.

Improved patient privacy regulations could also help to encourage health tech and telehealth adoption. Mexico and Uruguay are the only countries in the region with a national data-protection authority operating independently of the ministry of health.

The pandemic also catalysed the expansion of telehealth and health tech throughout South-east Asia. A recent survey of the Asia-Pacific region found that telehealth usage had doubled since 2019, and was expected to reach 60-76% penetration by 2024, with Indonesia and China taking the lead.

Many of East Asia’s super apps feature digital health services, including Gojek, Indonesia’s first unicorn, which merged with e-commerce marketplace Tokopedia last year to rebrand as GoTo.

Indonesian health care superapps Alodokter and Halodoc have received significant funding to expand their activities, with the latter serving 7m patients per month, 80% of whom reside outside of the cities of Jakarta and Surabaya.

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