What capabilities do health tech innovators need to succeed in the future of health?
Health tech innovators face a crowded market that is getting more challenging every year as technologies changes every time, while investment in this space continues to hold steady. The healthcare industry is one of the sectors that has significantly evolved due to the availability of new technology in recent years. Today, the healthcare industry is becoming more and more dependent on digital technologies to improve the patient-specialist communication, provide efficient clinical treatments, optimize the diagnosis of dangerous diseases, reduce public health threats, and optimize health services globally.
South Africa, a front-runner in healthcare innovation
South Africa has a population of about 59 million which equivalents to about 0.76 in the world, and is the second-largest economy in Africa, after Nigeria. South Africa’s health care spending, totalled to $229.7 billion in 2020 and is projected to increase by a total value of $39 billion in 2021, while total expenditure on health as a percent of GDP is 8.8%. According to Philips South Africa’s innovation research study, 64% of respondents saw healthcare as a crucial sector for innovation while in a 2019 report of the World Intellectual Property, South Africa was considered the 9th most innovative upper-middle-income country.
South Africa is also seeing the growth of digital health accelerators such as the Digital Health Cape Town, aimed at supporting digital health innovation in the country, whereas the government is fast-tracking the implementation of a National Health Insurance scheme, which will eventually cover all South Africans. In addition, the country has medical manufacturing capabilities and knowledge, and a highly competitive, innovative scene distinguishing it from other African economies.
Western Cape as a centre for technology healthcare innovation
Western Cape is the largest life sciences market in the African continent, Life sciences comprise the branches of science that involve the scientific study of organisms such as microorganisms, plants, and animals including human beings as well as related considerations like bioethics.
The Western Cape health technology sector currently contributes an estimated R1.7-billion to the Western Cape economy. Every year, R20-billion is spent on research and development at South African universities, of which R3-billion is spent in the Western Cape, which boasts four world-class universities, two academic hospitals, the South African Medical Research Council, and the state-of-the-art Centre for Proteomic and Genomic Research. The largest portion of that spend is on health technology research and development.
Top companies and organisations in the health-tech sector based in the province include the Biovac Institute, H3D, Roche Kapa Biosystems, Cipla, CapeRay, Aspen Pharmaceuticals, Avacare, TASK Applied Science, and Afriplex. Foreign companies operating in the country include Pfizer, GlaxoSmithKline, Sanofi, Bristol-Myers Squibb, and Johnson & Johnson.
In addition, the Western Cape prescription drug, generic drug and over the counter drug markets are all projected to show considerable growth up to 2023. Due to historical and current socioeconomic reasons, Western Cape has a population with high genetic diversity. This makes it a particularly advantageous location for life sciences research and application in the long term.
The Department of Science and Technology has noted that South Africa needs to develop its health innovation system using a model that brings together government, academia, industry and civil society which will benefit from manufacturing capability, research and academia, and the regulatory environment.
The Western Cape existing competitive advantage in these areas include:
- Manufacturing capability: The Western Cape has a diversified manufacturing industry that includes pharmaceuticals and biotechnology. Global generics companies, such as Aspen pharma-care and Adcock Ingram, have also emerged from the province.
- Research and Academia: The Western Cape has well-established research and academic fraternity in life sciences that has provided a steady output of research and development (R&D). Research by the African Society for Laboratory Medicine has found that while Africa has less than 500 internationally accredited laboratories, 30% of these are based in the Western Cape.
- Regulatory Environment: A robust regulatory environment is critical for any province aiming to develop world-class industries.
For a large number of investors entering the Western Cape market, the Western Cape has many attractive assets for investors such as important demography, a diversified, productive and advanced economy, abundant natural resources, a transparent legal system and certain political stability. Despite the country suffering from high crime rate, increasing social unrest (strikes and demonstrations), and structural issues in electricity supply and logistics.
According to FDI Intelligence’s market statistics, between January 2003 and March 2020, a total of 5 healthcare projects were recorded into the Western Cape Province. These projects represent a total capital investment of ZAR1.40bn.
Capabilities that Health Tech Innovators should have
The challenge in the Western Cape Heath Tech sector is to identifying and articulating an important unmet medical needs in developing an innovative solution which becomes the standard of care is long, with most teams failing somewhere along the way. The odds of successfully navigating the journey significantly increase if teams have the experience and skills needed to anticipate and address challenges along the way. However, for most Health Tech innovators, knowing the landscape and pitfalls to plan effectively only comes from gaining experience through prior successes and or failures quite an inefficient process.
Health tech innovators should consider the following capabilities as they take their products and services to market.
- Focus on human resources for health
According to Federica at al, 2016 emphasized that health tech innovators should hire the right people and focus less on hiring people with hard skills like engineers and these workers are available now that training programs have caught up with the need. What is more difficult to find are leaders with soft capabilities, such as sales experience and leadership? The future of the healthcare industry depends on the human talent capable of pushing this digital revolution one-step further every day.
- The right value proposition
Historically, pharmaceutical companies focused on demonstrating effectiveness and safety compared with control and took that information to the medical community. However, to be successful in the future of healthcare, innovators need to include the payer perspective earlier in the drug development process. The aim of developing products that are compelling to value proposition from the physician, patient, and payer perspectives.
Innovators also must collaborate with payers to understand and educate consumers, with the goal of helping patients make decisions about their healthcare. In other words, innovators need to help patients understand healthcare value. When patients had better understand their healthcare options and the associated costs, the efficiency of the healthcare market can improve.
- Community engagement
A common denominator, irrespective of whose perspective is taken into account, is that more cooperation is required. Patients want to be more actively involved in innovation processes; entrepreneurs need closer contacts with both clinics and patients in order to design products and services according to needs. Healthcare providers need the expertise and knowledge from both entrepreneurs and patients. On an organisational level, it is clear that coordination and a systematic approach to innovation are needed.
- Continuous involvement of customers
Health tech innovators always encounter challenges in the development of low-cost medical devices that will cater to both low and middle class given its traditional focus on premium products. Health tech product teams spend enormous time to develop an in-depth understanding of its customers’ requirements. Teams continuously interact with different users of medical devices such as doctors and medical staff.
- The correct metrics
Investors are looking for a measurable return on investment on products and services and oftentimes they look for returns within one to two years, this can be remarkably challenging for small innovators to deliver.
- Strategic partnerships
Medical technology innovation and adequate medical personnel can be considered the two most important internal resources that need to be developed in order to support business models. With the aim of sustaining the quick and effective acquisition of such internal resources, most of the selected cases make use of an extensive network of strategic partners.
- Health Tech Innovation Cycle
The process of creating innovative products, procedures, and care delivery systems the health technology innovation cycle. As shown in Figure below outlines milestones in stages from Invention to translation through commercialization. Representing this process as cyclical, rather than linear, highlights a key lesson learned and success is more likely by starting with clinical problems rather than pushing technology solutions and by keeping a focus on the result of improving patient care. The cycle operates at its best as a spiral, arriving at the end of each rotation at a higher standard of care, awaiting new medical insights and innovations for further enhancement.
Key questions should be asked when developing a product and solutions
- How will it integrate?
- The products and services should integrate into the existing workflow, but changing clinician behaviour is very difficult. Many experts also discussed the difficulties innovators face when trying to work with or integrate into electronic health record vendors.
- Who will pay?
- Even if an innovator figures out the right business proposition to get their product into the market, they may need a national salesforce to shop it around. As one expert explained, many early-stage companies fail to understand the heterogeneity of providers and payers.
- When will they pay?
- Sales cycles are long. For example, payers often have plans set out for years in advance, so innovators may have to wait years to receive investment.
- How will change behaviour?
- Patients. Clinicians. Getting the attention of the consumer: This is incredibly hard unless you have a strong value proposition.
- What are the regulatory barriers? For example, device-focused solutions can face lengthy regulatory approvals. Some investors said they avoid products like these altogether due to the added complexity and potential for failure.
- Barriers to innovation
The seminar that was held on 7th of March 2018 by Forum for Health Policy that was organized by three members stated Netherlands, Switzerland and Sweden came with the following barriers for innovation and cultural reasons to why innovation in healthcare is slow, below is a list of barriers.
Old infrastructure and regulations systems are not compatible with patients’ needs and rapid technological development. Rules, regulations and protocols are important in order to guarantee safety and quality but there must be ways for more rapid innovations, much needed by patients. On average, it takes an average of 14 years before insights reach implementation, which makes it difficult to introduce new technologies.
Political fragmentation, as well as highly fragmented systems, hinder innovation, long-term planning and coordination.
Lack of knowledge and cultural scepticism. Most doctors do not know what artificial intelligence (AI) is and there is a fear that AI will replace doctors or that they will be paid less. The process of introducing new knowledge into the system is slow.
Implementation is difficult, often even more complicated than coming up with the actual innovation. Innovative countries that produce innovations and solutions within both life science and healthcare. However, when it comes to implementation, it takes many years to test an idea before it can be adopted.
8.1 Collaboration and joint efforts
Clinics, societies, industry and academia all need to work together for a more efficient and fruitful innovation system. To make these platforms meet, networking and learning from each other are needed.
8.2 Making research and knowledge more accessible
Studies exist but it is hard to find people with enough knowledge. Also, incentives to do research and development work is needed. Facilitate clinical trials by improving communication between entrepreneurs and clinics, as well as making sure that research and development is part of healthcare providers’ assignments.
8.3 Flexible reimbursement models that foster innovation and new technologies.
Development and understanding for the need of new professions in the digital age (such as wearable technology therapist, healthcare navigators etc.)
8.4 Financial support, from the public as well as private funds.
Integration and better use of data, and systems to filter information. We need to use health data systemically and holistically and find correlations that can give guidelines for health predictions. With early access to patient data, doctors can make better diagnoses
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 Health tech investment trends: How are investors positioning for the future of health? Insights into the quickly emerging health tech sector, March 2020
 Health tech investment trends | Deloitte Insights
 Consortia for improving Medicine with Innovation & Technology
 Successes and barriers for innovation in healthcare -experiences from three countries Seminar 7th of March 2018 Forum for Health Policy.