Pandemic accelerates China's shift to digital healthcare
China is set to undergo a medical industry transformation over the next decade with an accelerated shift to digital healthcare. That’s according to new research from Deloitte China.
While the pandemic has certainly accelerated the shift to virtual care, Deloitte’s report, titled Internet Hospitals in China: The new step into digital healthcare, acknowledges that other conditions including greater public acceptance and favourable policies and sector reforms are contributing to the rapid development of China’s online hospital ecosystem.
"As the online economy has developed, and with mindsets and business models changing due to COVID-19, new infrastructure construction and sharply growing demand for hospital transformation, it is now time for online hospitals to enter a development boom," says Jens Ewert, Deloitte China Life Sciences & Health Care Industry Leader.
"In the next 10 years, the medical industry will undergo an unprecedented transformation with radical innovation and changes to the nature of services and processes, evolving from traditional medical services to smart health management."
As of 2020, investment and fundraising in the online hospital market hit RMB30 billion, far exceeding 2019 levels.
Multiple factors fuelling China’s online hospitals
A number of factors are fuelling the expansion of China’s online hospitals and virtual care.
With the emergence of the COVID-19 pandemic, over the last year or more, the Chinese public has gradually accepted online diagnosis and treatment, door-to-door medicine delivery, online payment and other services. In fact, data from the National Health Commission reveals that online consultations increased 20-fold YOY during the pandemic.
Policies have also been introduced to promote online sales of prescription medicines and allow medical insurance payouts to online hospitals, both major moves in the opening up of the online hospital ecosystem and which form a complete closed online loop from consultation and prescription, to settlement and medicine delivery.
Implementation of further sector reforms is set to advance the establishment of level-to-level diagnosis and the overall health management system, while construction of new infrastructure, such as 5G networks, will create a conducive environment for industry development.
"Online hospitals are set to create an internet-based closed loop covering medicine, drugs and insurance, or a Health Maintenance Organization (HMO) model,” says Yvonne Wu, Deloitte Asia Pacific and China Life Sciences & Health Care Risk Advisory Leader.
And an online HMO has plenty of advantages, from reducing medical expenses and resource waste due to the fact that it has no geographical limits and can reach more user groups. “It will also promote full-lifecycle medical services and gradually create an ecosystem that realizes the core value of smart healthcare, covering patient education, clinical service, treatment, payment and health management,” adds Wu.
Medical services management in the spotlight
Deloitte China reveals that at the heart of online hospitals is medical services management, which covers four service types – remote consultation and treatment, remote diagnosis, after-hospital care and health management.
Online hospitals have two main operating models - hospital + internet (online hospitals associated with offline medical institutions) and internet + hospital (separate online hospitals established by medical institutions).
And each model delivers both advantages and disadvantages in terms of resources, platform operation and technical capability, the depth and range of accessible medical information, integrity of government regulation, patient satisfaction, overall process management and medical insurance.
According to Wu, "Integration and cooperation between the two models is the ideal approach” as this not only strengthens the connection between online and offline medical institutions, but also “enables offline hospitals to leverage the internet for channel expansion”.
She adds: “The amassment of medical resources will transform medical service processes and extend the medical ecosystem, thereby driving industry reform and innovation, as well as the equal distribution of medical resources and medical service efficiency."
Q&A: Professor Loredana Padurean, Asia School of Business
As someone who is creating Asia Pacific’s business leaders of the future, what do you believe are the essential skills leaders require?
In many ways, we need leaders who are Renaissance women/men or polymaths, as opposed to specialists of an industry or a field. A polymath is a person with profound knowledge, proficiency and expertise in multiple fields and today’s leaders have to be able to combine various ideas, look at problems in novel and useful ways, and develop a broad and yet still deep set of skills, talents, and knowledge.
You’ve coined ‘smart’ and ‘sharp’ as skills of the future. What are these?
They are replacements for ‘soft’ and ‘hard’ skills, a concept coined by a US Army doctor in 1972 who observed that his pupils had different skills: dealing with machinery required ‘hard’ skills, while dealing with people and paper were ‘soft’ skills. This concept has served us well since, but I find it too binary, not to mention the semantic implications of the words themselves.
Soft implies gentle, delicate, mild, quiet, tender, weak. However, there is nothing soft in navigating competing perspectives and cultures, handling and delivering critical feedback or dealing with office politics. Instead, I prefer to call these skills ‘smart’. Hard implies rigid, difficult, heavy, static. But how can we think of engineering or software development as static or rigid? I believe ‘sharp’ is more apt as such skills need constant updating or sharpening.
I think it’s time to reflect on these classifications, because we can drastically change someone’s perspective by how we choose to talk about and frame something.
How important are smart skills in leadership today?
Smart skills are more important than ever because we live in a world of extreme diversity: generational, ethical, value-based, gender, etc. Gone are the days when giving an order was an effective act of leadership. I personally work with people from five different continents and across five different generations, therefore as leaders, we need to know how to adapt, motivate, inspire and connect. We need to increase our investment in learning about them in action, especially as smart skills are more difficult to develop.
I believe that a successful leader today has to be both smart and sharp. Take cognitive readiness, one of my top 10 smart skills. In order to be cognitive ready, one has to master system dynamics, one of my top 10 sharp skills. Also, did you know that one of the primary reasons why digital transformation fails is not the absence of digital literacy, a sharp skill, but the need for more validation and adaptability, both smart skills. So, instead of thinking of these skills as binary, I prefer to think of them as the yin and yang; co-existing and complementing each other.
So, you can teach leaders smart skills then?
Yes, you can, via a combination of the classroom experience, plus an action component supported by deeply embedded reflection. At ASB we call this Action Learning, and we teach it both in the MBA and in the executive programs. For example, in teaching a leader emotional maturity as a smart skill, first they need to learn what it is, and then act on it, before reflecting on what we did and how we did it. And then to repeat it, but this time with more expertise and awareness. It’s not easy, but that’s why my favourite mantra is ‘the job is easy, the people are not’.
Discover Professor Padurean's successful skills for a digital transformation here