Financial intelligence for Asia's healthcare markets
 
 
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Shifting sands

L.E.K. Consulting’s Fabio La Mola tells HealthInvestor Asia about a healthcare market going through major changes – creating significant opportunities for investors in the region.

The current trend of consolidation in the Asian hospital sector may soon start to wane, according to Fabio La Mola, partner in L.E.K Consulting’s Singapore office and head of the firm’s Asia-Pacific Life Sciences Centre of Excellence.

“You’re seeing a significant amount of transactions around providers and healthcare provision in general, and that has been the mainstay [of investments] for a long time now,” La Mola says. “It’s a sector that’s consolidating, and that will probably play out for a little bit longer, but it’s unlikely to be a continued vector for investing.”

The multiples on recent deals have started to look “a bit high”, he says, and “at some point that consolidation trend will exhaust itself.”

La Mola believes that investors are likely to shift their attention towards other pieces of the healthcare value chain, in particular specialist facilities, such as oncology centres and cath labs, as well as primary care services, such as dentistry.

“I think actually Asia in general is tremendously underserved when it comes to specialist provision outside of hospital,” La Mola says. The current composition of the healthcare sector, which remains relatively fragmented and lacking integration, could create new opportunities for investors, he adds.

“What you have seen in Europe maybe 10 years ago – people starting to consolidate pieces of the healthcare chain, and creating referral pathways – hasn’t even started [in Asia]. So, for the provision side, I think there’s still quite a way to go in terms of potential for investment. Hospitals will remain for a bit, but I think we will see new waves of investment around other areas.”

As the head of L.E.K’s Asia-Pacific Life Sciences Centre of Excellence – an initiative that was launched in October last year in partnership with Singapore’s Economic Development Board – La Mola has been working to understand how emerging technologies, from precision medicine to artificial intelligence and big data, will impact on the healthcare sector in the region.

The growth of digital health in particular could have substantial implications for healthcare providers, La Mola says, creating new markets, such as e-pharmacies that can offer direct delivery of medications or medical devices, and disrupting others.

The global digital health market is already valued at more than $120 billion, according to figures from Zion Market Research, and is forecast to surpass $420 billion by 2024.

Among the new players in the Asian digital health space are the Chinese internet giants Tencent and Alibaba. The former has launched healthcare apps and an insurance product delivered through its messaging service, WeChat, as well as investing in diagnostic artificial intelligence; the latter offers 24-hour medicine delivery and online medical consultations.

Healthcare providers and investors need to understand how digitalisation will impact their business models over the longer term, La Mola says.

“[Technology] that helps, for example, doctors make better diagnoses, or supports electronic medical records, that’s clearly not going to change infrastructure, but it’s going to make the use of infrastructure a lot better. You can study patient pathways, you can study best ways of essentially delivering that care,” La Mola says.

Advances in data management technologies could have more profound impacts, La Mola says.

“The issue with data right now, especially in healthcare, is that it’s very siloed. Connecting behaviour with clinical data with genomics is potentially interesting but on their own, not very helpful.”

Combining all of these datasets, and applying AI and machine learning to them could offer hospitals unprecedented insights into their patients, improving their ability to make decisions about their care, but also to track them along care pathways.

La Mola says: “If you look at the care pathway for most private hospitals, it starts when the patient walks through the door and ends when the patient walks out. That’s it. A lot of times even if they are requested to follow-up they never come back, and as a hospital you never know where they are because there’s no real CRM or any real way of following up.”

With the emergence of these technologies, providers and investors need to start integrating them into their planning, La Mola adds.

“Most people are still focused on how they plan the hospital, where they put the beds, where they put the OR,” he says. “What people don’t do enough of is actually looking at what other solutions are being developed out there … Preparing yourself to potentially absorb [technology] pilots and work with some of these solutions would actually be a wise move.”

 

Posted on: 08/05/2019 UTC+08:00


News

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BRS Ventures, a venture capital fund set up in the United Arab Emirates, has announced it will invest $5 billion in creating and developing high-quality healthcare facilities in India.
Switzerland-based pharma and consumer healthcare integrated solutions provider Lonza subsidiary Lonza India opened a corporate office in Gurugram this week and stated that it intends to grow at 15% a year.
German animal health company Boehringer Ingelheim has opened the Boehringer Ingelheim Health Management Centre in Shanghai.
Buyout firms KKR, Blackstone and CVC are all bidding for a stake in the hospital unit of the Philippines’ Metro Pacific Investments Corp.
Indian hospital chain Apollo Hospitals Enterprise has announced a profit of 79.3 crore rupees ($11.1 million) for the three months ending 30 June 2019.
The Australian Prime Minister Scott Morrison has expressed concern over Chinese conglomerate Jangho Group’s intension to purchase Australian pathology and radiology business Healius.
Bangalore-based digital healthcare platform Practo has partnered with Indian private sector bank RBL Bank to launch a co-branded health-focused credit card.



Analysis

Against the backdrop of a robust healthcare market with positive macro factors, speakers and delegates delved into the opportunities and challenges, and analysed the changing face of the region’s healthcare market
L.E.K. Consulting’s Fabio La Mola tells HealthInvestor Asia about a healthcare market going through major changes – creating significant opportunities for investors in the region.
Sumit Sharma and Matt Zafra, head and principal of health & life sciences, Asia Pacific at Oliver Wyman, look at what we can expect in 2019.
Edwin Tong, senior minister for health, explains how the Ministry of Health in Singapore is supporting the growth in the number of seniors with Alzheimer's.
Penny Wan, regional vice-president and general manager, Japan and APAC, Amgen, writes about the public health challenge of cardiovascular diseases.
French-based international ophthalmic optics company Essilor has signed Letters of Intent with the Royal Government of Bhutan and the Central Monastic Body to strengthen the country’s vision care infrastructure.
April Chang, country manager at Cigna Singapore, argues that wellness programmes at work can lead to reduced absenteeism, higher productivity and increased morale among employees.
Steven Fang understands how to set up a healthcare company. Not only is he chief executive and founder of ASX-listed oncology company Invitrocue, he was also the founder of Singapore-based Cordlife Group, a healthcare company which provides cord blood and cord lining banking services.


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