PPPs and Digitalization of Healthcare

Article by Ahmed Sadiq

As the healthcare sector makes an incredible, but widely predicted and researched, shift towards digitalization around the world, the medical landscape is left in a process of change. One of the key factors that have contributed to the immense pace of this shift is the COVID-19 pandemic. As the highly infectious disease gripped the world nation by nation, the need to provide medical care remotely became apparent to innovators and entrepreneurs, and as a result, more and more investment was pumped into the sector. It is now predicted by a study conducted by Fortune Business Insights (2020), that the telemedicine market would reach USD 185.66 billion by 2026.

Similarly, the COVID-19 pandemic, by stretching and testing the limits of the healthcare sector, also revealed many vulnerabilities that had been previously neglected. For example, as the brittleness of the healthcare supply-chain for necessary equipment like ventilators, medical devices, protective equipment and such was revealed, health inequity around the world and a lack of accessibility were also made apparent. As a result, governments in need of innovative solutions made an unprecedented number of Public-Private Partnerships (PPPs) in regards to therapeutics and vaccines (Deloitte Insights, 2021).

Hence, the response to the COVID-19 pandemic has been to accelerate the shift towards digitalization of healthcare and to employ cost-effective PPPs. Both approaches are used in order to save up much-needed resources and create value for money. As these two trends coincide, new research reveals the value this combined approach brings to the table.

In 2020, for example, Visconti and Morea conducted a literature review and a cost-benefit analysis on the impact of healthcare digitalization on PPPs. They tied both the trends together on the basis of their emphasis on patient-centric solutions, and argued that both of these approaches produce a synergic effect as the complexity of digitalization is aided by PPPs and in turn, PPP interactions can be improved through digital platforms. They make their case using an empirical study of how the digitalization of a PPP process can bring about great economic gains and cost savings (figure 1).

Figure 1. Cost-saving due to digitalization (Visconti & Morea, 2020).

Visconti and Morea’s research however was limited to Europe due to its increased use of PPPs in public health infrastructure and services. Nevertheless, they argue that the valuable cost-effective results could be replicated all around the world, especially since EU tenders are open to international competitors who meet their eligibility criteria.

The question still remains though whether this combined approach is suitable where resources lack the most, namely in countries with developing economies.

And to answer this question, a recent mega-project conducted in nine different districts of Andhra Pradesh, India is taken as a case in point. Spanning over 47 months, the study analyzed 183 Urban Primary Health Centres (UPHCs) and how telemedicine could provide quality primary and specialized care to the population of a developing country through a PPP modality (Ganapathy, et al., 2021).

In addition to the 11 million consultations done, the study also performed 7 million laboratory tests. The results found in the study were a huge success. The laboratory tests alone only cost 28.84% of that in private laboratories. The quality of the consultations and the laboratory were done remotely. The mega PPP project concludes at the end by stating:

“E-health in a PPP mode in a developing country is eminently doable… Technology-enabled Remote Healthcare can now bridge the healthcare divide,” (Ganapathy, et al., 2021).

The ‘healthcare divide’ being the immense gap between the resources that developing countries have and the number of resources that they need. Ganapathy, et al., call their project a success, encouraging governments to replicate what they have achieved in South India.

Conclusion

As many countries rushed to respond to the COVID-19 pandemic, an array of solutions was implemented in order to save up resources and make healthcare more accessible. Two of these solutions were the digitalization of healthcare and the increased use of PPPs.

Now, recent studies suggest how these two trends can complement each other as countries try to strengthen their healthcare sectors around the world.

References

Cohen, A. B. et al., 2020. Direct-to-consumer digital health. The Lancet, 2(4), pp. E163-E165.

Deloitte Insights, 2021. Deloitte Insights.

Available at: https://www2.deloitte.com/global/en/pages/life-sciences-and-healthcare/articles/global-health-care-sector-outlook.html

Fortune Business Insights, 2020. Fortune Business Insights.

Available at: https://www.globenewswire.com/news-release/2020/05/20/2036192/0/en/Telemedicine-Market-to-Reach-USD-185-66-Billion-by-2026-Driven-by-the-Surge-in-Product-Adoption-due-to-the-Coronavirus-Outbreak-says-Fortune-Business-Insights.html

Ganapathy, K. et al., 2021. Digital Health Care in Public Private Partnership Mode. Mary Ann Liebert Publishers.

Rosalia, R. A., Wahba, K. & Milevska-Kostova, N., 2021. How digital transformation can help achieve value-based healthcare: Balkans as a case in point. The Lancet, Volume 4.

Visconti, R. M. & Morea, D., 2020. Healthcare Digitalization and Pay-For-Performance Incentives in Smart Hospital Project Financing. International Journal of Environmental Research and Public Health, 17(7), p. 2318.

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