Sourabh Kankhar, Research Analyst at Frost & Sullivan, identifies the Asia Pacific region as an emerging hub for the health informatics industry.

Globally, the healthcare industry is under tremendous pressure to deliver high quality and efficient patient care. Healthcare providers are aiming to reduce the administrative and clinical costs as well as improve the management of resources. An active adoption of IT solutions is crucial to making healthcare delivery more patientcentric and efficient. IT is expected to play a major role in helping healthcare service providers overcome future challenges as well as in meeting the needs of their information-dependant industry.

Emerging Health Informatics

Total healthcare expenditure in Asia-Pacific was $753bn in 2005, with Japan accounting for nearly 55 per cent of this figure. The total hospital information systems (HIS) market in Asia-Pacific was valued at $3.6bn for the same period. Once again, Japan had a share of more than 70 per cent of this market, which is growing at 12.8 per cent annually.

Market growth is high in China,Australia, Malaysia, Thailand, the Philippines and India. The fast-growing Asia-Pacific healthcare industry offers huge potential for the HIS market in the future.

Hospital Administrative Systems

When compared with North America and Europe, Asia-Pacific lags behind in the adoption of healthcare informatics. The majority of countries in Asia-Pacific have been late in adopting HIS, and so have a weak IT infrastructure in the healthcare sector. Administrative HIS had a share of more than 60 per cent in the total HIS market of Asia-Pacific in 2005. The majority of hospitals in China, India, Thailand, the Philippines and Malaysia are still implementing administrative solutions. Hospital administrative solutionsfor finance, billing, HR and materials management have a huge market in these countries. Even healthcare service providers in Australia are in the early stages of clinical HIS adoption. Forty per cent of the market for clinical information systems is concentrated in Japan, South Korea, Singapore and New Zealand.The penetration of clinical solutions such as radiology information systems (RIS),electronic medical records (EMR), as well as picture archiving and communications systems (PACS), is high in these countries.

Technology Trends

Healthcare providers in Singapore and South Korea are ahead in IT adoption compared with their other Asia-Pacific counterparts. The National Healthcare Group (NHG) and Singapore Health Services (SingHealth), two public sector healthcare providers in Singapore, are emphasising adoption of IT solutions to seamlessly integrate the administrative and clinical processes of their member hospitals. In South Korea, by 2004, almost 40 per cent of hospitals had implemented a PACS solution and had a filmless radiology department. Medical facilities in New Zealand are quite open to innovative technologies. Most major healthcare facilities in New Zealand have made investments in hospital clinical systems such as PACS, RIS and EMR. The majority of healthcare providers in Japan have adopted hospital administrative solutions and are adopting IT systems for clinical processes and functions. The major health informatics initiatives in India have been confined to large corporate and private hospitals such as the Apollo Hospitals Group and Fortis Healthcare. China’s health informatics market has not been developing rapidly and most hospitals still do not have any IT systems to manage administrative processes efficiently. Presently, the public health system in Australia is concentrating on replacing the disparate administrative systems with sophisticated solutions.

Challenges Facing the HIS Market

Chronic under-investment in health informatics. The public healthcare system has been spending considerably less on IT when compared with other government sectors in most Asia-Pacific countries. Private healthcare providers in the region have also ignored investment in IT systems when compared with industries such as banking and finance. Although the governments are taking steps and planning initiatives in the health informatics sector, this underinvestment has led to a weak healthcare IT infrastructure in Asia-Pacific.

High penetration of low-quality legacy systems. Allocation of low budgets for health informatics by hospitals has led to the implementation of disparate legacysystems in the majority of countries in Asia-Pacific. These systems are of low quality and make integration with new systems very difficult. The health departments of various states and territories in Australia have allocated budgets to replace the legacy patient administration systems implemented by member hospitals. This exercise has probably delayed the adoption of clinical HIS in Australia. In India, around 65 per cent of the HIS market is made up of in-house implementations and legacy systems.

Factors Driving the HIS Market

Health informatics initiatives by governments. An increased use of IT in the healthcare sector is being promoted by the governments of various countries in Asia-Pacific. The commitment shown by these governments to improve healthcare delivery through the implementation of information and communication technology is evident from the ambitious projects that have been planned in the past few years. Australia has planned HealthConnect, a nationwide electronic health record network that aims to collect,store and share health-related information electronically. Singapore has started the electronic medical record exchange (EMRX) program that is expected to help public healthcare groups, SingHealth and the NHG to integrate their electronic medical records. Malaysia has planned to construct 33 new paperless hospitals in the Eighth Malaysian Plan. ‘Medical services’ is the most prominent field in the list of seven leading areas identified by the Japanese Government under the e-Japan priority policy programmes for the promotion of effective IT utilisation.

Increasing private participation in healthcare delivery in Asia-Pacific. In South Korea, over 90 per cent of hospitals are private. This figure is around 80 per cent in Japan. The h4 presence of private participants in healthcare delivery acts as a major driver for the health informatics market. This is reflected in the h4 healthcare IT infrastructure in South Korea and Japan when compared with other Asia-Pacific countries. Private participation in healthcare delivery is increasing in countries such as China, India, Thailand and Australia.

Other important drivers expected to encourage hospitals in Asia-Pacific to implement HIS are the increase in medical tourism and the growth of the health insurance market.

Competitive Analysis

There is a h4 presence of local participants in the Asia-Pacific health informatics market. There are dominant local companies in a majority of the countries, whose presence is limited to that particular region or a few other countries in Asia-Pacific. Market concentration is high: the top three to four companies have more than 50 or 60 per cent of market share in most countries. Global participants such as GE Healthcare, Philips Medical Systems, Siemens Medical Solutions, and Cerner, also have a presence in this market.

A Shift to Clinical Solutions

Compared with North America and Europe, the health informatics markets in Asia-Pacific countries, with the exception of Japan, are nascent in terms of size. The level of adoption in most of these countries is low when compared to their counterparts in North America and Europe.There has been a definite delay in realising the effectiveness of IT in healthcare in Asia-Pacific. However, with the growing awareness and more strategic and active adoption of HIS, countries such as India,Australia and China are likely to show tremendous growth in this market. The market concentration is expected to shift from administrative to clinical solutions, as more healthcare providers in Asia-Pacific move up the technology adoption curve.