Digital healthcare a revolution or pipe dream?

Healthcare spending has grown much faster compared to the rest of the economy in recent decades. In the US it rose 818 per cent during 1960-2010 while gross domestic product grew 168 per cent and wages increased only 16 per cent, said Christian Schmid, director fund manger at Credit Suisse. “But the situation seen here is also true around the world,” said Schmid, in an exclusive interview to The Nation.
Annual spending on healthcare in the US is 18 per cent of GDP, which is a very high proportion, said Schmid. 
He believed that digitalisation would revolutionise the healthcare industry in the future. He said digitalisation had the potential to reverse the trend of ever-increasing costs, an effect that a number of industries had already benefited from over the past 20 years. The healthcare sector is at least a decade behind in the digitalisation curve. 
However, he believed that digital technology would shift the weight of the healthcare industry from treatment of illnesses to preventive care. So those who are engaged on the treatment side, such as pharmaceutical companies or hospital operators, would lose some of their business. “What is going to happen is very powerful. What we see happening is we’re transforming today’s healthcare system into a completely new healthcare system,” said Schmid.
He said that today’s healthcare system is not healthcare but care of the sick, because people are already sick when they enter it. 
Two factors are holding back digital healthcare. First, people don’t trust new technology and this will take some time. Second, the rules and regulations of the existing healthcare system are not quick in accommodating new technology. 
Things are starting to change, he said.
He said a large number of people globally are ready as they are starting to become more conscious of their health, seen in their wearing of digital devices to monitor their health in real time. Insurance companies are starting to introduce products that offer premium discount for those who regular go to fitness centres and record their health information such as blood pressure, blood-sugar levels and food intake via smartphones or wearables. 
While new technology such as sequencing of human DNA will improve disease diagnosis and medical treatment, he said efficiency would be enhanced by technological innovation, leading to lower cost of treatment. Some governments such as in the US, Canada United Kingdom and Switzerland recently laid down a new regulatory framework to drive digital healthcare, Schmid added.
Viroj na Ranong, research director at Thailand Development Research Institute, however, was cautious. He said the healthcare industry does not naturally benefit from the principle of “economies of scale”, an essential to bring cost down. “You cannot just line up people for heart surgery [in the same way you manufacture products],” said Viroj. New technology has often entered healthcare industry and the cost is high initially but then the cost goes down. It is helpful but not by much, he said.
The impact of an ageing society will be huge on healthcare cost, and even IT technology cannot reduce it. “Healthcare cost goes up when people get old and it skyrockets in the last six months of a patient’s struggle to stay alive,” said Viroj.
IT technology will improve treatment efficiency, but it would not have much impact on the cost of treatment.
While shifting towards a preventive approach, it is unlikely to make much difference since your serious illness may be delayed to a later age and then again the cost of treatment will be much higher. “If you are very careful about your health, you may suffer diabetes when you reach 50-60 instead of 30-40,” said Viroj. 
Regarding the Thai government’s policy on medical tourism, he said it is one of the factors driving the cost of healthcare in the country as the government promotes demand but cannot keep up with the supply of medical doctors.