In this joint FICCI-BCG publication, it has been explored how the healthcare delivery transformation can be achieved through the creation of an “open digital health ecosystem” or a health ODE. Such an ecosystem is defined as an open and secure digital health platform that can be leveraged by all entities, public and private, to unlock transformative health delivery solutions
We believe that this ecosystem will fundamentally change the way in which healthcare is delivered today and unlock significant incremental economic opportunities for all the stakeholders in the healthcare ecosystem. Additionally, it will accelerate India’s journey towards universal health coverage by creating a healthcare system that puts the patient at the center of all solutions and incorporates healthcare access and affordability to all.
The advent of open digital health ecosystem in India will change the rules of the game for all healthcare stakeholders to win in the new era. It calls for all stakeholders to embrace themselves for a new beginning – and update their strategies and models to stay ahead of the curve.
COVID-19 has brought to the forefront the need to strengthen healthcare infrastructure in India. It has also inspired promising disruptions and increased the acceptability of digital healthcare solutions as a viable alternative to traditional healthcare delivery models.
Highlights from recent surveys conducted to understand adoption of digital health amongst clinicians & patients:
The opportunity
Today, India is at the cusp of a ‘leapfrogging’ the barriers present in the current healthcare ecosystem. Digital technology can be a key enabler in this aspect. It will create an integrated health system that puts the patient at the center of all solutions to deliver accessible, comprehensive, high-quality, and affordable care.
The Indian government has already made significant progress in this journey – with initiatives such as the National Health Policy (NHP) (2017), National Health Stack (NHS) (2018), and National Digital Health Blueprint (NDHB) (2019). In August 2020, the Honorable Prime Minister announced the launch of the National Digital Health Mission (NDHM) that aims to create an “open digital health ecosystem (health ODE)”.
This will be a shared digital infrastructure that can be leveraged by both public and private enterprises to build and provide new, innovative, healthcare solutions. Its key building blocks include standardised health registries, a unique patient Identity (ID), federated health records, interoperability, and automatic claim settlement engines.
In the past, similar public digital infrastructure in financial services has revolutionised the sector.
Today, UPI is one of the most sophisticated, advanced, and financially inclusive payment platforms in the world, accounting for more volume and value of transactions than that of all credit cards and debit cards in India!
Key themes and Economic value
We believe that the health ODE, to be implemented by NDHM, will revolutionise the Indian health sector by making digital a core component of the operating models for all health sector players.
Five themes of the health ODE, that will drive healthcare transformation in India:
1) Information transparency: Currently, one of the biggest roadblocks for quality care is the absence of reliable data repository, to help verify a health facility or a doctor. “Health registries” will act as the single source of truth for all stakeholders in the health ecosystem, increasing trust and credibility.
2) Interoperability: Today, care is siloed with patient history often being lost across disparate health data systems and this impacts care quality. Interoperability of health data systems will allow patients to share their digital health records across providers, thus making “coordinated care” a reality. Additionally, patients will be able to easily switch providers without losing continuity of care.
3) Standardised claim processing: Currently, every insurer uses its own claim processing platform. Going forward, there will be standardised e-objects (for example, e-claim form, discharge summary, etc.), and a common health claims exchange. This will allow for faster and cheaper settlement of claims – through auto adjudication and easier fraud prevention.
4) Prescription digitisation: Digitisation of a provider’s treatment advice will ease claim filing and processing for providers and payers. Patients will request e-prescriptions to maintain longitudinal digital health records and provide consent-based access to doctors and hospitals for better quality care.
5) Playground for innovations: All building blocks will be open and accessible by all entities to build new, innovative, solutions on top. This will pave the way for development of patient-centric innovations.
We anticipate that over the next 10 years, if implemented correctly, NDHB can unlock incremental economic value of over USD 200 billion for the health sector
With improved health outcomes there will be an increase in productivity, which will lead to an additional benefit of USD 200-250 billion to India’s GDP. This value will accrue as a result of three big shifts.
Shift 1: From episodic care to wellness-oriented care
Currently, the Indian health system is episodic and primarily focused on secondary and tertiary care. Care seeking is delayed due to poor access and affordability. This results in poor health outcomes – which is getting further exacerbated, given rising NCD prevalence. However, we expect healthcare demand to increase in future.
Access will undergo a fundamental shift with increased adoption of digital service delivery models such as e-consultation, e-pharmacy, e-diagnostics and e-ICU. This will especially increase demand for out-patient department (OPD) care.
Affordability will increase given an increase in provider discoverability – thus increasing provide choice. Increase in competition, coupled with reduction in administrative costs will lead to price rationalisation in the sector.
Patient trust will increase due to health registries – which will increase overall demand and allow patients to select providers as per their needs/ preferences.
Diagnosis rates will increase for medical conditions. Due to higher OPD and more “consumerism” (patient’s self-involvement in their care) – which in turn will be driven by aspects like digital health records.
Health insurance products will undergo a paradigm shift. Insurers’ business models will transform due to overall reduction in costs. Coordinated care, more strategic purchasing, and patient self-care will reduce medical expenses. Additionally, administrative costs will reduce due to standardised claim processing. This will catalyse a stronger shift to managed care, including the introduction of the next generation of insurance products, including OPD insurance.
Shift 2: From volume-based to value-based healthcare
Currently, incentives across health stakeholders are misaligned. For example, the current provider business model rewards higher patient footfall – not higher quality health outcomes. Going forward, we expect digital health to improve care quality significantly:
Patient behaviors will improve as they are able to better access healthcare and get more involved in their wellness journey with access to longitudinal digital health records. Some payors might even increase financial incentives for such behaviors by gamifying insurance premiums.
Care models will evolve. Digital health records will allow caregivers to be better informed about patient context and enable coordination across providers along the care continuum. Analytics on aggregated and anonymised data will allow population wide co-relation between clinician advice and health outcomes. Over time, the aggregated data will also help in standardising clinical protocols, improving care quality.
Payors will reward providers that deliver higher quality care. Given greater ubiquity of outcomes data, insurers (both government and private) will evaluate providers on both care quality and medical costs, i.e., on “healthcare value”. As a result, insurers will steer patients towards providers with better quality (for example, via lower co-pays), thus making healthcare more evidence-driven and catalysing innovations in clinical practices.
Shift 3: From siloed systems to streamlined processes
Currently, healthcare stakeholders use disparate health data systems that create inefficiencies in multi-stakeholder processes and interactions. These processes and interactions will be streamlined significantly with significant cost savings for all players.
Providers’ administrative systems-processes will simplify driven by system interoperability and health registries – simplifying key processes such as doctor on-boarding, regulatory approvals, and payor empanelment.
Claim filing and processing will be streamlined for both providers and payors given standardised e-objects and claim processing.
Digital “ways of working” will reduce workforce costs and increase productivity. This will be aided by digital tools (such as remote monitoring and e-consultations), associated redesign of clinical processes (such as tele-radiology), and updated business processes (such as pharma companies’ commercialisation model will start transitioning from physical to digital).
Overall, these measures will result in significant cost savings for the entire healthcare ecosystem.
Impact on healthcare stakeholders
We believe that a health ODE will drastically change healthcare market dynamics, threatening existing business models. It calls for all healthcare stakeholders to understand their roles and implications on their businesses and to update their strategies accordingly.
Roles and implications for the government
The central government will play a critical role in shaping the health ODE’s evolution including policies, standards, and the overall design of the systems and processes. It will ensure that all solutions are tethered to patient benefit (such as improved health outcomes and data privacy), while also lowering overall health system costs.
State governments will play a dual role
- Firstly, ensure high-fidelity roll-outs of the health ODE (registration of patients and providers), and drive on the ground change management (e.g: strengthening health ODE narrative, stakeholder incentivisation)
- Secondly, identify implications of the health ODE on its existing roles of a provider and an insurer. For instance, adopt the health ODE as a provider– and leverage the ODE to improve healthcare quality for its citizens (e.g., fund population mgmt. models, higher reimbursement for high quality private providers)
- Additionally, state governments will have to expedite separation of its role as a provider, payor and regulator to avoid conflicts
Strategic imperative:
The government will require a fundamental digital transformation both in its role as the health ODE custodian and as a participant. This transformation will include improving the talent pool in government workforce, process redesign, and information technology (IT) systems overhaul.
Roles and implications for health tech start-ups
Health tech start-ups stand to benefit the most and are expected to drive the consumerism of healthcare with higher patient engagement. New players will emerge, and business models will undergo significant shifts.
New class of intermediaries will emerge to build the very foundation of the digital infrastructure such as health facility verifiers, consent managers, and health locker providers.
New opportunities will arise to develop cutting-edge patient solutions that challenge existing service delivery models, for instance, self-management Applications (apps) and Clinical Decision Support Systems (CDSS).
Business models will evolve from an “e-Commerce setup” (that includes private label brands and preferential listing of providers) to an “open market model” (that allows democratic access to any provider through any platform).
Strategic imperative:
Health tech players will have to re-visit their product market fit, operating models, and business models to identify new opportunities for top-line and bottom-line growth.
Roles and implications for providers
New demand pools and market opportunities will open-up with an increase in healthcare access (with e-OPD, e-ICU, etc.) and affordability.
However, the “basis of competition” will change. Provider choice and even reimbursement from payors, will be driven by “healthcare value” (i.e. better patient health outcomes and better patient experience).
Operating models will evolve both clinical (with increased usage of e-OPD, AI/ ML based clinical decision support system) as well as administrative – with Health registries and change in process of payor empanelment, claims settlement etc.
Cost structures will improve with administrative process efficiencies arising from digital ways-of-working.
Strategic imperative:
Providers will have to refresh their market access strategy, reassess their competitive landscape, innovate in care delivery models, and invest in operating model redesign.
Roles and implications for health insurers/payor groups
Overall, increased healthcare consumerism resulting from increased patients’ involvement in their healthcare journey will provide an impetus for health insurance adoption and hence, market growth.
Significant opportunity for innovations will emerge in network design and products. For example, insurers will steer towards lower-cost and higher quality providers. New products such as OPD insurance and gamifying premium pricing linked to healthy patient behaviors will become possible.
Margins will improve due to a reduction in both medical expenses (rising from improved care quality and better care coordination) and administrative burden (rising from standardized claims platform).
Strategic imperative: Payors will have to bolster and expedite their initiatives focusing on innovations and margin improvement.
Key implications
A health ODE will accelerate India’s journey towards universal health care and open multiple economic opportunities for all stakeholders. However, in order to make such an ecosystem a reality and to reap its benefits, all players will have to come together and make three concerted shifts, notably.
- Shift in mindset from “siloed care delivery” to “collaborating and providing continuum of care to patients”.
2. Update their business models and strategies to stay ahead of the curve.
3. Ensure an inclusive approach to allow for innovations that cater to all sections of society.
Additionally, key risks (such as the risks associated with data security and poor data quality) will have to be mitigated during the design phase itself to ensure success. Natural incentives will also have to be built-in for all stakeholders to adopt the digital platforms.
Summing it up
Once implemented, such an ecosystem will greatly empower patients by providing increased choice of service providers. This will lead to an unprecedented change in products and delivery models. Healthcare players will thrive or perish, depending on how quickly they adapt to the new environment. Overall, this could lead to India leapfrogging its healthcare evolution curve.
About FICCI & BCG
FICCI provides a platform for networking and consensus building within and across sectors and is the first port of call for Indian industry, policy makers and the international business community.
Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities.
