This article first appeared in Digital Edge, The Edge Malaysia Weekly on July 11, 2022 - July 17, 2022

Here’s a twisted but therapeutic tale: A 69-year-old woman goes to a hospital’s A&E (accident and emergency) department and is soon seen by an old doctor who examines her and proclaims she’s pregnant. The geriatric woman is flabbergasted and walks out of the consulting room, screaming.

A younger doctor rushes to her aid and escorts her to another consulting room. “The senile, stupid doctor told me I’m pregnant,” the patient sobs. “I’m 69 and post-menopausal. How did that idiot pass medical school?”

The baffled young doctor walks to the older doctor’s consulting room, followed by the panting patient. “Have you checked this patient, doctor?” he gently asks. “She’s a grandmother and well past an age to be pregnant.”

The old doctor peers up from the rim of his spectacles. “Does she still have hiccups?”

If that story made you wonder, these statistics should make you ponder: Malaysia’s healthcare expenditure probably crossed RM69 billion in 2021, up almost 10% over 2020, no thanks to Covid-19.

According to Fitch Solutions, by 2025, the country’s healthcare bill will reach RM91.1 billion, with a five-year compound annual growth rate (CAGR) of 7.6% in local currency and 8.9% in US dollar terms.

Across the Causeway, Singapore’s spending on healthcare tripled to S$11.3 billion in 2019, up from S$3.7 billion in 2010. “If the current healthcare spending — excluding Covid-19-related expenditure — continues to increase at a similar rate over the coming decade, we will spend about S$27 billion (RM85.5 billion) or around 3.5% of GDP by 2030,” Singapore’s Finance Minister Lawrence Wong said in his Budget speech on Feb 18.

The underlying reason: rapidly ageing populations. According to United Nations data, one in six people worldwide (17% of the global population) will be aged 65 or over by 2050, up from one in 11 in 2019 (9% of the population). Meanwhile, one in four persons in Europe and North America will be in that age group.

The number of people aged 80 years or over is projected to triple from 143 million in 2019 to 426 million in 2050.

In Malaysia, about 2.1 million (6.5%) of its population were aged 65 and above in 2018. Malaysia will have more than 15% of its population in this age group by 2035. In Singapore, those aged 65 and above formed 16% in 2021. By 2030, this will rise to 25%, just like Japan and some European countries at present.

The crux of the issue is health equity or inequitable access to healthcare. Studies have shown that the pandemic disproportionately impacted marginalised and low-­income groups. “Extreme poverty rose globally in 2020 for the first time in over 20 years as the pandemic exacerbated the problems of climate change and geopolitical conflict, which were already impeding poverty reduction efforts,” reports a recent Deloitte study.

Covid-19 pushed an additional 100 million people into poverty. “Climate change, a particularly acute threat for countries in Sub-Saharan Africa and South Asia, may drive 68 million to 132 million into poverty by 2030,” Deloitte notes. “More than 40% of the global poor live in economies affected by fragility, conflict and violence.”

Lyonel Cha, Deloitte’s director of digitalisation for Southeast Asia, says countries such as Malaysia, Mexico, China and India continue to roll out universal health coverage to improve health equity.

“India’s out-of-pocket expenditure as a percentage of current health spending is 63%, among the highest in the world,” Cha says. “While increasing insurance coverage can help address healthcare affordability, insufficient and outdated health system infrastructure (facilities, technology, clinicians) is a major hurdle to achieving health equity worldwide.”

One solution: More private equity flows into healthcare. According to industry estimates, the retail health-tech space generated US$18 billion across 537 venture capital (VC) deals in 2021, compared with US$9 billion across 535 deals in 2020. The big winner is digital health, which includes telehealth and connects patients and healthcare providers online.

“Digital health includes AI-powered chatbots to provide medical advice and even cognitive therapy in some cases,” says Dr Chong Yoke Sin, managing partner at VC firm iGlobe Partners.

“Digital health has the potential to provide benefits not just for the end consumer but across the entire health ecosystem. For example, hospitals deploying health-tech services can reduce costs for consumers and insurers, increase convenience to users and help improve capacity constraints. The pandemic served as a catalyst to provide a boost to digital health.”

Generally, new technologies in healthcare have added costs, not removed them. But as technologies improve and become more helpful in pushing healthcare innovations to scale, that trend may change.

According to a McKinsey study, the US expenditure on healthcare would have been reduced by US$280 billion to US$550 billion (RM2.4 trillion) if its healthcare delivery sector had relied on labour productivity gains instead of expanding the workforce to meet demand. “Continued improvements to care delivery technologies will play a significant role in capturing these productivity gains,” McKinsey notes.

Technology is enabling care to be more virtualised through advancements in areas such as remote patient monitoring by making data more available in the workflow at the time of the physician encounter. It is also more personalised, with analytics and insights to deliver the right messages to patients at the right time. It must be provided more seamlessly by integrating capabilities and experiences across the patient journey.

“Data and analytics will support a healthcare system in which it’s more profitable to prevent a stroke than treat one,” McKinsey quoted Farzad Mostashari, CEO of Aledade, a US-based data analytics and healthcare firm.

“It is no accident that right now, a whole set of disruptors in value-based care are using technology and building on the data infrastructure we set in motion 10 years ago to scale value-based models,” says Farzad.

The ideal way to scale is to transfer workloads to secure public or hybrid clouds. Healthcare organisations need to accelerate the transformation of their IT estates to modern, flexible architectures, states the IBM Institute for Business Value (IBV). A hybrid cloud can help improve the agility and scalability of enterprise applications and data by combining the benefits of a public cloud and on premise infrastructure. But that is easier said than done.

“Moving to a hybrid cloud can improve all areas of the healthcare ecosystem — healthcare providers and payers, consumer health and life sciences,” IBM IBV reports.

“However, cloud adoption has been slow, partly due to the highly regulated nature of healthcare and life science industries. Only 80% of companies globally moved to any cloud in 2019, but only 20% of their workloads had cloud-native microservices. Migrating mission-critical apps and core business workloads — the other 80% — is the next chapter of the cloud,” it adds.

Where’s the money going? Private investment in healthcare has evolved thematically over the past decade. For much of the 2010s, investments were focused on consolidating fragmented assets and optimising back-end functions. Around 2018, investments in business model expansion became more popular, as seen in bets on platform models or the integration of ancillary offerings.

“We see significant investment going into healthcare delivery innovations, going forward,” McKinsey estimates. “That includes redesigning the patient journey through digital enablement, shifting healthcare delivery into ambulatory and home settings, and value-based care models.”

On the tech front, automation is vital because healthcare providers are caught in a perfect storm of shrinking payments, improving outcomes, enhancing the patient experience and bolstering innovation credentials. For instance, treating and managing chronic conditions and mental health in the US takes up nearly 90% of the US$3.3 trillion in healthcare spending. Any tech that streamlines and automates operations is welcome.

That is where robotic process automation (RPA) comes in. By automating simple routine tasks, RPA can optimise costs and outputs and enable healthcare resources to focus on higher-value tasks. About 50% of US healthcare providers will invest in RPA in the next three years, up from 5% currently, Gartner reports.

“Cost optimisation is a consistently recurring theme among healthcare providers,” says Anurag Gupta, a Gartner research vice-president. “The money RPA saves by not having to spend as much on an unreformed process translates into cash that is available for front-end clinical functions, which is very important while healthcare organisations combat the Covid-19 crisis.”

Even before the pandemic, 41% of healthcare providers experienced a funding shortfall, according to the 2020 Gartner CIO Survey. “The early promise of RPA is to help reduce these operating cost pressures that sit on the top of healthcare provider CIOs’ (chief information officers) list of challenges,” says Gupta.

Artificial intelligence (AI) is the other side of the tech coin. By 2023, 20% of all patient interactions will involve some form of AI enablement within clinical or non-clinical processes — up from less than 4% today.

“The need to unlock the hidden insights in patient data and enable better decision-making is also driving the demand for AI cloud services,” Gupta says. “That’s why more than 33% of all healthcare workloads will be in the cloud by 2023. Using cloud-based AI, healthcare providers can predict upcoming patient needs and identify optimum interventions. Cloud-based solutions have become the preferred strategy for CIOs who need to innovate while controlling costs by converting capex (capital expenditure) outlays to opex (operating expenditure) models.”

How healthy are you? That is a loaded question encompassing individuals, institutions and government organisations’ physical, mental, fiscal and operational health. While it would be impossible to optimise all parameters, striking the right balance might be the proper response.

Since we started with a medical tale, let’s also end with it. Last week at a polyclinic, I overheard a conversation between a nurse and a three-year-old toddler. “Don’t be so nervous, young man,” the nurse handed him a small plastic bottle. “All you have to do is pee in this.” The toddler asked nervously: “Then, do I have to drink it?”

Raju Chellam is vice-president of new technologies at Fusionex International, Asia’s leading big data analytics company

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's AppStore and Androids' Google Play.