GCC HealthTech/MedTech industry in the post-Covid-19 era
Covid-19 has set the tone for the healthcare industry to reset the ecosystem by actively leveraging technologies such as AI
Covid-19 has strained the global economy like never before as the health crisis has swiftly morphed into an economic catastrophe.
The extraordinary and unparalleled events that have unfolded over the last six months have had a profound impact on all sectors and the long-term economic consequence could be significant. While several industries are reeling under the unprecedented cutbacks amid the pandemic, the healthcare sector has been the most resilient with business models evolving to absorb the shockwaves that have left many paralyzed.
The exaggerated burden on healthcare institutions amid limited resources has highlighted the need for revolutionary breakthroughs in tools for diagnosis and treatment, as well as to enable systems to scale with solutions that allow people to access better and more affordable healthcare services. The crisis has thus set the tone for the healthcare industry to reset the ecosystem by actively leveraging technologies such as artificial intelligence (AI), Machine Learning (ML), cloud computing and advanced robotics to build products and solutions that can be widely adopted. The rapid advancements being made in these fields are transforming the existing structures, while also signifying that innovations are now focusing beyond the scope of Covid-19.
In order to strive for uniform access to healthcare, several governments in tandem with service providers are bolstering digital solutions to make healthcare more affordable and reduce costs. Industry stakeholders are working relentlessly to integrate new-age technologies that enable smarter, more accurate, and predictive diagnostics and treatments, while also creating newer opportunities within the virtual healthcare space.
Notably, advanced technologies involving AI, ML, Robotics, and Big Data are playing a pivotal role in improving care models in the current scenario through services such as telehealth, virtual consultations, and health analytics for effective treatment outcomes. As a result, the HealthTech/MedTech industry has become a hotspot for investors in the recent times raking in $6.3 billion in global VC funding in H1 2020, up 24 per cent Y-o-Y, and surpassing all former H1 funding records.
In the GCC, HealthTech/MedTech has already been witnessing traction as healthcare providers are investing heavily to foster technology as a core part of their business strategy. Consequently, there has been a significant surge in funding and corresponding increase in digitization across the healthcare continuum. The UAE has led the region in terms of investments and initiatives with increasing focus towards utilizing AI to enhance outcomes and reduce costs. Notably, the use of AI is predicted to add $182 billion to UAE's economy by 2035, with the healthcare industry expected to take a $22 billion slice of the gains in its gross value added.
The technology is consequently being deployed in a myriad of healthcare settings such as clinical laboratories, research facilities and critical care units in hospitals. The result of these efforts have transpired to major advances in the GCC's HealthTech/MedTech prowess leading to pioneered solutions such as AI-based remote healthcare models for improved care services and disease management, and smart solutions for geriatric health and 3D printing for prosthetics, orthopedics and other assistances.
Aspiring to become a smarter healthcare ecosystem, the GCC would now need to make its medical care more intelligent with increased focus on patient centric delivery models. Emulating new generation of information technologies, especially those that have proliferated in the US and EU, could help the domestic healthcare industry bounce to newer heights. For instance, online pharmacy services such as those offered by Amazon's PillPack, Capsule, and Ro in the US hold immense potential in the GCC, especially in the current situation. For such MedTech services to prosper, regional vendor startups should look at integrating data for niche offerings like e-prescription between healthcare organizations/doctors and pharmacies, as well as general health information exchange of medical records.
In a bid to further expound the existing problems and propose adequate solutions, the industry also needs patient-friendly technologies. For example, hospital chains need to widely integrate strategies such as central scheduling of appointments, introduce Master Patient Index (digital patient records in a HIPAA-compliant index), and implement EMR/EHR to facilitate the healthcare value chain-diagnosis, prescription of medication, and treatment. Consequently, expertise in clinical coding, data analytics, information governance, and clinical documentation will grow in demand, enhancing the region's digital ecosystem.
Over the past 12 months, US-based startups Ro and Capsule both raised $200 million each in fresh PE funding to expand their remote patient monitoring offerings and pharmacy delivery services, respectively. These startups enhance patient experiences and outcomes by offering transparent prices and care on demand - areas where traditional healthcare operators have not been efficient. These companies have also forged deals with insurers and other industry stakeholders to avoid associated complexities. Moreover, the startups are now looking to further expand their offerings to include services such as at-home diagnostic testing and remote consultation - services that are crucial in the current scenario.
India-based Orange Health is another such startup which facilitates doctors treating patients at home through online consultation, medicine delivery, and conducting tests remotely within an hour. As industry experts expect to witness a rise in on-demand treatments and services, it is important that the GCC adopts these technology trends to better cope with the current health crisis. Going forward, such strategies could prove to be the microcosm of the entire healthcare competitive structure in the region.
Having said that, the GCC has made rapid strides in recent years and is fast becoming a Silicon Valley for healthcare in the wider MENA region. It has turned into a hub for several digital start-ups such as Altibbi, Vezeeta, HeyDoc, Medicus AI, Sihatech, Health At Hand, Nala, SaayaHealth, Yodawy, AlemHealth, Meddy, and Cura among others that have carved a niche with curated offerings for patients during the pandemic.
Such start-ups, catering to out-of-hospital settings, have witnessed a surge in investor interest from both regional as well as global funding houses. Domestic PE/VC activity in the GCC HealthTech/MedTech sector witnessed investments of over $6 million in 2019 and with the onset of Covid-19, the attraction has only multiplied exponentially. Consequently, investment activity witnessed a strong rush in 2020, with UAE-based startups Vezeeta ($40 million) and Okadoc ($10 million) raising a combined $50 million in February alone. More recently, Abu Dhabi's tech ecosystem, Hub71, expanded to add 15 new companies to its program this year, prioritizing start-ups that would support the private and public healthcare sector amid the pandemic.
Meanwhile, regional policymakers have integrated smart healthcare goals into their national agendas, and are proactively embracing niche technologies to foster scientific innovation in collaboration with private players to better respond to the crisis. By deploying the latest technologies available, authorities have been trying to mitigate the effects of the virus and profile people at risk. Leading the region, the UAE has implemented mass-testing programs and currently ranks top in the world in terms of screening per capita. To further improve on testing density standards, Pure Health, which manages a network of 115 laboratories in the UAE, collaborated with InterSystems to deploy its automated platform to accelerate the screening process.
The UAE has also developed a rapid Covid-19 laser testing technology (QuantLase Imaging Lab) that gives results in seconds, enabling much faster mass screenings. In the wider GCC, startups such as Bahrain-based Doctori are working ardently to address problems posed by the pandemic, as they provide free consultations in collaboration with the WHO, with the aim to launch services across the MENA region. Such encouraging developments have transformed the GCC's image, especially the UAE, in the global map as an enabler in the fight against Covid-19.
In conclusion, the Covid-19 crisis has opened floodgate of opportunities for the industry, especially for those which offer patient centric solutions that hospital chains and caregivers/doctors can advocate. On the other hand, investors are on the look-out for companies which can scale up their ability to develop products in low-resource settings and can be deployed across geographies.
In a nutshell, it is now becoming apparent that the industry is adopting a better equipped preventive care model while also enhancing the curative care settings - a move towards being better prepared for any such pandemic that might shock the human race in the future. Thus, the budding HealthTech/MedTech industry will play a critical role in achieving the GCC's strategic healthcare objectives - including those related to building workforce capacity, fighting communicable and non-communicable diseases, as well as improving access to healthcare services at affordable prices.
Shailesh Dash is a serial entrepreneur, ideator and mentor. Views expressed are his own and do not reflect the newspaper's policy.
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