Asia Pacific economies are struggling to cope with the past year’s series of financial catastrophies and regain the market stature and confidence they once enjoyed. Despite the turmoil, all industries including healthcare continue to demonstrate their commitment toward privatization and modernization through technology. Advances in healthcare IT in the Asia Pacific region are narrowing the differences in healthcare between East and West. Is the information age speeding healthcare toward a global standard?
If you envision the United States as 50 separate nations, each with its own language, culture and healthcare system, then you can begin to understand the complexity of healthcare in the Pacific Rim. The same can be said for the application of information technology. Technologically advanced countries like Japan--which has been developing applications in medical informatics since the 1960s--are neighbors with developing economies such as Vietnam and Thailand where telephones are far from ubiquitous, and high tech may mean a standalone PC-based patient administration system at best.
Still, the needs are universal, and evidence is emerging that diverse cultures readily agree on both common problems and fixes for the healthcare challenges of the 21st century. As Asia Pacific governments confront large elderly populations and shrinking public coffers, leaders are offering new payor models, preventive health programs and information technology as relief for strained healthcare systems. "There is an awareness that IT can really move the healthcare system forward in both the public and private sectors," says Kurt Miller, Andersen Consulting partner and head of global medical management in Pittsburgh.
Kwok Chan Lun, M.D., director of medical informatics at the National University of Singapore and founder of the Asia Pacific Assocation for Medical Informatics, says that hospitals in the region are quickly seeing the urgency to automate, developing into sophisticated purchasers of healthcare IT and relying less on patchwork, home-grown systems: "The way to see quick return is to buy proven applications from the shelf." As this environment matures, so will the market for U.S. providers of healthcare information technology and services who have a strong track record at home, he says.
Trend setter: Japan and the CPR
Japan has perhaps the richest legacy of investment in information technology in the region--thanks to the country’s strong domestic industry and competitive business environment. Japan alone represents 73 percent of the total IT spending in the region, according to statistics compiled by IBM, and is IBM’s biggest healthcare market in the Asia Pacific region, says Jozef Wysen, marketing manager for IBM Asia Pacific Healthcare in Brisbane, Australia.
Wysen says healthcare IT in Japan is comparable if not more advanced than in the U.S., citing a high level of clinical systems integration in Japanese healthcare organizations. And because the Japanese have an insurance-based healthcare system, they have shared similar needs with the U.S. to automate claims processing since the 1970s.
"Some of the best systems I have seen come from Japan," agrees Lun. "I have seen fully automated laboratories where the specimens were never touched by human hands."
A shining case study of Japan’s progress in healthcare informatics is the private, family-owned Kameda Medical Center, a 350-year old organization located in Kamogawa, a seaside resort town southeast of Tokyo. The organization has been developing an enterprisewide electronic medical record and patient management system with IBM since 1990. It has been up and running now for nearly four years across every department--inpatient, outpatient, home health and laboratories. The Windows-based system runs in a mainframe environment over ISDN lines, connected to 1,000 PCs. The system is not entirely paperless yet since Japanese healthcare organizations are required by law to keep paper records. The system provides access to all radiology and ultrasound images, and supports outcomes and cost measurement, clinical guidelines and alerts, according to John Walker, executive VP of the medical center.
Walker says that all but one physician in the enterprise is using the system. Adds Toshitada Kameda, MD, chairman of Kameda Medical Center: "Patient satisfaction has gone up dramatically, and also collaboration between the hospital and the clinics has improved dramatically. All data is shared among all departments and staff." Dr. Kameda says that the system has cut wait time in the outpatient clinic to a mere three minutes. Lun calls Kameda Medical Center a "showcase for Asia."
The organization has spent roughly 2.5 percent of its budget on IT over the last several years and shows no sign of slowing. It will upgrade to a Java and Windows NT version later this year, and a lifetime clinical data repository is in development. Through a spin-off company called Kameda Health Informatics Institute, Dr. Kameda plans to market one of the software modules--a clinical navigation system for disease management and clinical pathways developed by Kameda physicians and patented in Japan. "We are developing relationships between processes and outcomes and cost, and revising the processes systematically," he says. The U.S. and Europe are potential targets for the product.
Singapore: experimental island
A much smaller country with a population of only three million, Singapore is one of the few survivors of the Asian economic crisis, and the island has a number of national healthcare IT initiatives under way. Broadly, Singapore plans to become the medical hub of Asia and is busy drafting deals with Western investors (see accompanying story, "U.S. Providers Bring Innovations to Asia," page 56).
In technology, the Singapore government has been the catalyst for massive infrastructure development. In June 1997 it launched the Singapore ONE project to bring information services through ADSL (asynchronous digital subscriber line) and cable modems to all Singapore homes and businesses by 2000. Lun says the government has invited major industry players like Microsoft and Yahoo! to test their services on the network. "The Singapore government firmly believes that IT is the way of the future for Singapore," he says. "Electronic transactions on this broadband, islandwide network will be the way the government, industry and schools will conduct business."
In his role as head of medical informatics R&D at Singapore National University, Lun is working to develop "Health One," a multimedia health information service for Singapore ONE that will be available in Chinese, English and Malay.
Projects like Health One and Health Direct, a Web-based consumer health product codeveloped by Kaiser Permanente International--a consulting spin-off of Kaiser--and Raffles Medical Group in Singapore, indicate a trend throughout the Asia Pacific region to involve consumers in the healthcare process, according to Andersen’s Miller. The drivers for consumer IT initiatives in Asia are much the same as in the U.S., he says: "A convergence of higher consumer expectations across many industries and advances in technology are making information available to the layperson."
Developing nations: foundering or futuristic?
While integration, standards and consumer health applications are shared priorities between the West and the advanced economies of Asia, most of the remaining AP nations are "just trying to figure out how to enter the information age," according to Lun. Before the currency crisis, Singapore and Malaysia were well-regarded as high-tech hot spots in the making, with the potential to leapfrog the technology of the West since computing and telecommunications infrastructures were being developed from scratch and countries could ramp up to the latest standards without worrying about maintaining or replacing old technology.
Many governments were embarking on major construction and infrastructure development plans designed to attract Western investors. With Asia still under financial duress after a round of disastrous setbacks--most notably the Indonesia crisis last spring--the future is murky even for the strongest economies.
Opinions are mixed today regarding the viability of the leapfrog phenomenon --not just because of the economy, but also because decisions for IT purchasing are made on a national level and subject to political wrangling. Observes John Fitzpatrick, international marketing manager with Cerner Corp.: "The ability for Singapore and Malaysia to actually execute that (leapfrogging) is questionable. It will be a matter of finance and political will."
Developing nations that promised to catapult the region’s financial and technological potential will be most affected by the economic ripple effect. Sheldon I. Dorenfest & Associates, a healthcare IT market research and consulting firm in Chicago, was exploring business opportunities in Malaysia before the currency free-fall in 1997, but has since shelved those plans. Says CEO Sheldon Dorenfest: "The economic crisis has changed everything."
Confirms Gordon Bennett of the Hong-Kong-based Asia Pacific Research Group: "Infrastructure projects with heavy capital requirements are not going ahead." Malaysia’s much-hyped Multimedia Super Corridor project is perhaps the most ambitious of these plans--a grand scheme to build a 15 by 50 kilometer business park near Kuala Lumpur supported by a high speed fiber optic ATM network and incorporating two "smart cities" and a multimedia university. The Malaysian government wants the Corridor to become a major hub for the creation of multimedia content, products and services, and reports that 180 foreign and local companies have applied as investors. Motorola, Sun Microsystems, Oracle, Intel, Siemens, Fujitsu, SAP and Lucent Technologies are a few of the founding investors.
The government has outlined four main areas of application development for the Corridor: electronic government services including license renewal, utility payment and electonic procurement; a multipurpose smart card for electronic cash, driver’s license, national ID and health information; telehealth and "smart schools." In conjunction with the Corridor, the government also announced a 16-hospital construction project in 1996.
RFPs for the national telehealth initiative were issued one year ago, and the Malaysian Ministry of Health is on the cusp of announcing development for the project, which will incorporate personalized health information and education, multimedia continuing medical education, teleconsultations and a "lifetime health plan,"--Malaysia’s beginning version of an electronic medical record, according to Dr. Jai Mohan, director of the telehealth initiative. Smart cards will be used to store information from the last three outpatient visits and last two inpatient stays, as well as allergies or other chronic conditions.
Mohan admits that the economic crisis has forced Malaysia to forego implementation of the more expensive components of the plan, such as a radiology archiving system: "The currency crisis helped us focus on real returns which will bring the greatest benefits at the lowest cost. And it made us careful not to bring technology in for technology’s sake." For instance, he notes, store and forward technology will be used wherever possible, rather than video conferencing.
Private sector doctors will also be eligible to use the system--but not for free. "We don’t have the national health financing system to support it," Mohan explains. "The idea is that benefits will be so clear that all those who can afford to will subscribe because it will save money and bring wellness."
While the Corridor still is going forward, the final outcome likely will be on a much smaller scale than the original design. "Outside of Malaysia," says Bennett, "most people rolled their eyes at the prime minister’s fanciful claims that it would be the next Silicon Valley."
Even in a country with such strong political support for technology, the reality of Malaysia’s everyday challenges speak for the region. Bennett notes that major power outages are not uncommon there. "Malaysia is still a developing country with an infrastructure that is trying to keep pace," he says.
Helping rural docs in Thailand
"There is no question that most Asian countries are behind the U.S. in terms of medical informatics," says Lun. An optimist, however, Lun foresees basic telecommunications and telemedicine applications as a launchpad into medical informatics for the developing world. "Many countries will leapfrog to telemedicine systems because the technology is becoming increasingly affordable and they can provide quality care to areas they couldn’t before."
Thailand is another country with national telehealth plans; and while market prospects are not as solid as Malaysia and Singapore, American firms PictureTel Corp. (videoconferencing systems), GSI (satellite technology) and Vidar Systems (hardware) are under contract for a telehealth project, according to Dr. Narong Kasitipradith, director of the IT office in Thailand’s ministry of health, Bangkok. The government began planning for telehealth four years ago, and is testing a new network between three Bangkok hospitals and 17 rural providers.
Thailand’s objectives are to provide medical consultations, training and education, and a voice/data network for rural physicians. "We think we can provide them not only with learning but with a network to access medical databases," Kasitipradith says.
The network will be a first step toward clinical systems for Thailand. Kasitipradith says that very little patient data is being collected or stored, and the typical Bangkok hospital’s only forms of automation are DOS-based systems for administration and billing. The Thai economy has been severely strained in the past year, with healthcare suffering a 10 percent budget cut. While Kasitipradith is unsure whether telehealth will help his country cut healthcare costs, he believes it may keep caregivers in isolated areas. "We hope that this will bring up the personnel quality in the remote sites so they are happy to stay there."
East vs. West: shared understanding
Despite significant language and cultural differences, healthcare and technology in advanced economies in the East and those in the West often run parallel. Singapore, New Zealand and Australia are all moving along the continuum from administrative systems to investment in clinical systems, and according to several sources, are comparable now to U.S. healthcare organizations. Integrating disparate systems, moving information to the enterprise level, managing the quality/cost equation and exploiting existing technology investments are all key in the Pacific Rim, according to IBM’s Wysen: "The state of IT maturity varies from country to country but the problems and challenges organizations experience are still very similar to those in the U.S."
Universally, healthcare--whether in the U.S. or Asia--must play catch-up on the technology front, according to Sheldon Dorenfest: "For whatever reason, healthcare around the world is not as automated as other industries." Dorenfest provided consulting services to an Australian organization looking to facilitate healthcare IT vendor partnerships in the Pacific Rim, and he has visited other countries in the region on behalf of the consulting firm.
Other common East-West threads include the need to train staff for enterprise resource planning (ERP) installations, high IT staff turnover and lack of experienced staff, and year 2000 conversion problems, according to a report by the Asia Pacific Research Group. IT managers in Asia are projecting 20 percent to 50 percent of ’98 budgets for Y2K spending alone, the report notes.
In terms of the structure of healthcare delivery systems, New Zealand and Australia are probably most like the U.S., and all three countries share an immediate challenge to curb rising costs. While the biggest payor is still government--not private insurance as in the States--both New Zealand and Australia have large integrated healthcare organizations responsible for the care of regional populations, much like the U.S. integrated delivery system model. American healthcare IS firms are quickly catching on, and looking for ways to market enterprisewise systems in the South Pacific. Shared Medical Systems, Malvern, Pa., researched Asia Pacific and found that New Zealand offered a nearly ready-made market with the least initial investment, according to Tom Tomlin, corporate VP and general manager of SMS New Zealand (see "American Firms Eye the Pacific," page 62).
However, IT investment is an area where many other countries still fall behind the United States. Sheldon Dorenfest estimates that Australia and New Zealand spend roughly 1 to 2 percent of healthcare operating budgets on IT. Yet there is evidence that markets for some technologies are skyrocketing: telemedicine and clinical systems--especially decision support--are in demand throughout the Pacific Rim, according to several U.S. vendors.
In Australia, a country of 18 million people, there are approximately 150 active teleradiology projects and more than 300 ISDN videconferencing sites, according to Mark Brommeyer, consultant and chair of a telemedicine interest group of the Australasian Teleconferencing Association in Queensland. The Australian government has also embarked upon a $250 million infrastructure development plan.
"At the moment we are expanding more rapidly per capita in telemedicine services (than the U.S.)," he says. Telemedicine has been successful in Australia because of the country’s dispersed population and large geography, a national commitment to universal access to care, and a keen interest in technology by physicians, he adds. "There are a lot of physicians with a technology bent who have been able to convince funding bodies to take risks."
Brommeyer says, telehealth in Australia is challenged by dwindling public funds, a need to upgrade the computing and telecom infrastructure, and a lack of national coordination for research and strategy--as in the U.S.
Even in Japan, where culturally, healthcare is quite different than in the West, the practicalities of implementing technology to support healthcare are the same. Government regulation, physician acceptance and standards development are all major barriers to adoption of the computer-based patient record (CPR), according to Dr. Kameda. When asked why the CPR is not common throughout Japan, Kameda replied: "I would ask you the same for your country!"
Westerners have much to learn about both developed and developing nations in the East. Andersen’s Miller suggests that the region is advancing the evolution of both managed care principles and information systems to support new healthcare models. He says that in some forward-thinking Asian countries, health officials are discussing the importance of behavioral and psychographic data in healthcare decision-making, and looking for ways to include such data in electronic medical record systems of the future.
Could collaborative research and joint ventures with Asia Pacific yield better clinical guidelines and more effective methodologies for outcomes research, evidence-based medicine and patient empowerment? With the advent of the Internet and the worldwide availability of high-speed communications technology, the potential for sharing knowledge and data is hampered only by the willingness of the parties. Ironically, countries such as China that are just beginning to automate healthcare are learning from Western failures in healthcare IT: Soon they may provide new approaches that are more effective, cost less and make sense for a patient in Shanghai--or Tupelo, Mississippi.
Regional Organization Marks Fifth Year
The Asia Pacific Medical Informatics Association (APAMI) was formed in 1993 as a regional group of the International Medical Informatics Association. APAMI’s mission is to promote regional cooperation, information dissemination, research and development, and standards in medical informatics among Asia Pacific countries, according to Kwok Chan Lun, MD, founding president of APAMI and director of medical informatics at the National University of Singapore.
Since its formation, APAMI has helped launch national healthcare informatics associations in Malaysia, Indonesia and the Philippines, and has generated awareness about the field in India, Pakistan, Sri Lanka and Fiji, Lun says.
APAMI is now working to establish two consortiums, one for telemedicine and the other for family practice. The telemedicine consortium will promote telemedicine in the region and provide technology transfer to countries of need in the region.
To help promote scientific interaction between Asia Pacific countries, APAMI sponsors triannual conferences. The third APAMI conference, APAMI 2000, will be held in Hong Kong. APAMI’s current president is Dr. Branko Cesnik of Australia. (www.aims.org.sg/apami)
APAMI Member Nations:
People’s Republic of China
U.S. Providers Bring Innovations to Asia
BACK IN THE EARLY ’90s, KAISER Permanente was getting flooded with calls from health officials all over the world wanting to learn more about U.S.-style managed care. Finally, three years ago, Kaiser formed a separate consulting arm, Kaiser Permanente International (KPI), to help other countries form integrated delivery systems and implement information technology.
KPI has been working with Raffles Medical Group, a joint venture in Singapore incorporating an HMO, 40 primary care centers and a hospital under construction. KPI and Raffles codeveloped a Web-based patient education system, "Health Direct," that provides news, wellness and medical information in English, Mandarin and Malay. Health Direct will run a pilot in the Chinese population of San Francisco later this year, according to Donna Wright, KPI’s managing director, Asia/Pacific, Oakland, Calif. Wright says that Singapore is an ideal test market for new products and services because of its advanced infrastructure, small size and support from the government to innovate.
According to Wright, KPI does not push the Kaiser brand of healthcare on its international clients, but instead emphasizes prevention, best practices and collaboration. "One of the reasons KPI was set up was for the global exchange of information." She says that KPI’s work helping other countries form new delivery models is helping Kaiser gain experience in network development.
Two other prominent U.S. healthcare organizations also have formed long-term strategic relationships in Singapore. Johns Hopkins Medicine will open an oncology clinic this fall in partnership with Singapore’s National University Hospital and the Singapore government, and UCSF Stanford Healthcare is opening an imaging center later this year in collaboration with the Health Corp. of Singapore, a government agency.
While Hopkins plans on some ROI from patient revenue, the main activity of the clinic will be biomedical research and training, according to Steve Thompson, vice dean of Johns Hopkins Medicine and head of the Singapore organization. "They (Singaporeans) have a particular interest in developing their biomedical technology sector: They want to be a hub," he says. "It became clear that research would bring the biggest synergies between Singapore and Hopkins." Thompson says the partnership will give Hopkins new sources of research funding: He also expects some referrals to the medical center in Baltimore, which derives about 7 percent of total patient care revenues from international patients.
Researchers will communicate over a high-speed network connecting Baltimore to Singapore. Hopkins also will provide continuing medical education and distance learning, perhaps using the Internet, and will deploy a version of its home-grown electronic medical record system for clinical care. The medical center will send 12 to 15 MDs and PhDs to Singapore for the first year.
At the new Singapore radiology center, UCSF Stanford plans to install state-of-the-art imaging equipment and Stanford’s inhouse-developed software, provide teleradiology links for subspecialty care, and establish a center for education and training, according to Gary Glazer, professor and chairman of Stanford’s radiology department and director of the clinic. "Our goal was to accelerate technology transfer and education from our labs at Stanford to Asia. We felt that Singapore was an excellent partner." UCSF Stanford has a 17.5 percent equity stake in the center.
Stanford will have one on-site director and two Stanford-trained radiologists at the center, with short-term visits by other faculty members. Long term, Glazer says Stanford wants to train enough individuals in Singapore so the center can operate as "a true satellite site."
Of all the different specialities Stanford could transport to Asia, why an imaging center? "It’s the window into the cutting edge of noninvasive medicine," says James Bair, UCSF Stanford’s director of international medical services. And cutting edge is where Singapore wants to be. Glazer says the facility will be "smart" wired to support an advanced communications infrastructure including high-speed connections with Stanford’s radiology department.
While Stanford also wants to expand its presence in Asia--the medical center has existing relationships with Singapore and Manilla for telemedicine, as well as a strong Asian patient base--Glazer says the venture will allow Stanford physicians to observe different strains of disease and new areas of pathology imaging. "It’s always beneficial to look at alternative diagnostic pathways," he says. Glazer also sees the potential for joint technology R&D projects and even joint clinical trials in the future.
BJC Health System, St. Louis, established an international health services office last year to help foster relationships with international patients and medical institutions. The organization now is forming management, education and IS consulting agreements in China, South Korea and Tokyo. The health system’s affiliation with the Washington School of Medicine has brought a 25-year history of international collaboration in patient care, research and education.
The South Korea proposal developed out of a relationship with a Korean patient who was treated at BJC, and would establish a telemedicine link between a Korean hospital chain and BJC’s Children’s Hospital to assess and treat high risk pregnancies, according to Daniel Mueller, director of BJC’s international office.
While BJC expects some ROI from second opinions and referrals from South Korea, Mueller insists that revenue is not the driver of such projects. "If the purpose is solely to create revenue…it’s shortsighted." He sees the potential for information exchange--such as alternative medicine in China--as part of BJC’s mission to share knowledge with physicians around the world.
Just how Asia views such active interest by U.S. institutions in the region is unclear. Kwok Chan Lun, M.D., director of medical informatics at the National University of Singapore and founder of the Asia Pacific Assocation for Medical Informatics (APAMI), agrees that Asia looks to the U.S. because of its achievements in research and development. But he also recognizes that U.S. organizations come to Asia to make money.
"Some hospitals see Singapore as a gateway to get patients to come to the United States," he says. Lun remains skeptical of the potential for any future collaborations since the economy has turned down in Asia. "With the recent slowdown in many Asian countries, the financial incentives may not be as strong for some of these hospitals."
American Firms Eye the Pacfic
IN JUNE, BUSINESS WEEK REPORTED THAT in the first three months of 1998, U.S. exports to East Asia fell by 3.4 percent and the estimated total cost this year to U.S. manufacturers from the Asian financial flu would be from $75 to $100 billion. Despite the doom and gloom prognosis for further development in the region as political and economic fallout continues from 1997’s currency crisis, the Pacific Rim is still poised to become a dynamic center of commerce.
According to a report by the Hong-Kong-based Asia Pacific Research Group (APRG), the packaged application segment in Asia Pacific represents 19 percent of the $52 billion global market: "overall…one of the better growth segments of the IT industry." By the year 2000, the APRG predicts Asia will represent 38 percent of the global IT market. The market research firm also forecasts "significant" growth potential in electronic commerce and the pharmaceutical/ healthcare software sector.
U.S. high-tech firms such as IBM have been investing in the Asia Pacific marketplace for decades: IBM healthcare has a presence in virtually every Asia Pacific country, and succeeds by establishing a local office staffed by local employees. In Asia, IBM sells complete packages of hardware, software and services and has developed several country-specific clinical and hospital information systems--a much different strategy than in the U.S., where IBM’s healthcare strategy has focused on ecommerce and networking services.
More and more, IT purchasers in the region are looking to Western firms for off-the-shelf clinical systems, according to Jozef Wysen, marketing manager for IBM Asia Pacific Healthcare in Brisbane, Australia. "The skew to buy versus build is much heavier in the clinical solutions area," he says. "Usually the trade-off in deciding on a local versus a U.S. solution is price versus the level and sophistication of functionality required."
IBM has had particular success in Japan, a country that poses a tough point of entry for most Western firms because of its strong nationalistic bent, preference for domestic technologies and the daunting amount of time required to learn the Japanese way of doing business. "You have to be absolutely committed with a lot of money," says Caroline Wang, general manager, health and pharmaceutical industry for IBM Japan, Tokyo. A big investment consideration is the need to "double-byte enable" software to handle the complex characters of the Japanese language.
Boston-based Wang Healthcare Information Systems, Inc. also has made inroads in Japan, its first international market. Wang began striking relationships with Japanese distributors two years ago, and today, after a "seven-figure investment," has landed two hospital contracts for its electroni