A new report by global management consulting firm McKinsey & Company delves into Asia's rising consumer-centric digital health ecosystems and its emerging players. It ultimately advises healthcare players, both incumbents and new, to define their future roles in orchestrating or participating in those health ecosystems.

FINDINGS

Emerging consumer-centric digital health ecosystems in Asia deliver care by combining three critical components: a network of healthcare service providers across care settings; a smart system leveraging behavioural, social, and health data; and a technology backbone enabling data and insights to flow between care providers.

These ecosystems are not entirely digital as they both integrate digital and physical health services. They are not run by a single entity as these ecosystems typically consist of a "central orchestrator anchored around a few self-built business models". 

The McKinsey report pointed out four archetypes of these digital health ecosystems: 

• Broadening access to primary care: There are companies combining telemedicine and e-pharmacy services, such as Ping An Good Doctor, AliHealth, Practo and Halodoc

• Improving health and wellness: Payers leveraging digital technologies to urge consumers to monitor their health, such as Singapore Health Promotion Board through its Healthy 365 programme, AIA with the AIA Vitality and Prudential's Pulse programme.

• Expediting access to acute care: Building "digital front doors", like Singapore's HealthHub app and internet hospitals in China.

• Managing and monitoring disease: Providers of digital chronic disease management platforms, such as Medlinker and ClouDr in China.

McKinsey also highlighted lessons for orchestrators to consider as they capture opportunities from the ongoing digital health transformation in the region: 

1. Building a successful ecosystem relies on aligning interests and connecting multiple stakeholders within health systems; in-depth analysis about the pain points of each party is key to reveal the opportunities.

2. A digital ecosystem does not imply a pure[ly] online approach and a successful model would require integration of both online and offline resources to build the care continuum and achieve the best outcomes.

3. The design of each business model will require [a] definition of at least three functions – flow generation, transaction conversion and profit creation, to ensure sustainable development.

In order to realise value from building a digital health ecosystem, orchestrators need to ask themselves the following, according to McKinsey:

• What is the source of advantage? 

• What strategic capabilities and partnerships should be developed? 

• What strategic capabilities and partnerships should be developed?

• What is the time horizon and risk appetite to invest?

• How will stakeholders interface with government healthcare priorities and regulators? 

THE LARGER TREND

According to McKinsey research, the budding digital health market in Asia is expected to be worth up to $100 billion by 2025. In the report, it cited five fundamental forces driving its growth: 

1. Ageing population: Over the next four years, Asia will have around 456 million people aged 65 and above, accounting for a tenth of its population, who will lift the demand for health services.

2. Supply Constraints: With a projected shortfall of nine million nurses worldwide, some Asian countries will be badly affected. Also, there are fewer doctors attending to about 1,000 people in Asia compared to the average count in OECD countries.

3. Rising consumer expectations: It is said that consumers are spending more on health and wellness. McKinsey research showed that nearly half of Chinese consumers are spending more on health over the past year and almost a quarter is spending more on nutrition. 

4. Growing financial burden:  While Asian governments spend an average of 4.5% of GDP on healthcare, they are still the dominant healthcare payers, making up 64% of all health expenditures in 2018. 

5. Technological innovation: Half of the global internet users are found in Asia. Meanwhile, Asia corners about $6 billion of the $14 billion global venture capital or private equity investments in digital health.

ON THE RECORD

"We believe that digital health ecosystems represent the future of healthcare in Asia and beyond. Both healthcare incumbents and new entrants will need to define what their future roles will be in orchestrating or participating in health ecosystems," the report concluded.