Zurcher Stephen A.

English

Zurcher, Stephen A.

Waseda University Repository

?     ?193Healthcare Information Technology Trends in the Developing WorldJournal of Asia-Pacic Studies ?Waseda University? N . 17 ?October 2011?Healthcare Information Technology Trends in the Developing WorldStephen A. Zurcher?is paper explores the basis for creating sustainable businesses in the healthcare information technology industry in the developing world. It will examine the opportunity for new business and social models based on the usage of information technology within the healthcare industry in developing countries. Both a published case study and author collected surveys of ongoing businesses based on the use of open source electronic medical records in developing countries are analyzed.Keywords: healthcare system, developing world, business planning, business plans, bottom of the pyramid, electronic medical records, open source soware, OpenMRS, openEHR, Wharton societal wealth program, sustainability1.?Introductione author delivered a lecture to Professor Sadahiko Kano?s Waseda University Healthcare Policy and Information Study Group on June 25, 2011. is paper is based on that presentation. e author has a doctorate degree in the usage of electronic medical records in Japan, Korea and the United States ?2005? and has worked in the enterprise network and systems management soware markets for over twenty years. e authors? knowledge will be applied to the challenge faced by companies in the developing world in the healthcare industry to create a sustainable business model that is not dependent on outside funding to maintain. A cited case study will be used to illustrate this paper and also preliminary data collection from business rms based on the use of electronic medical records in developing countries will also be included.2.?Possibility of protable business for the Bottom of the Pyramid segmentIn the ground breaking article by C. K. Prahalad and Allen Hammond ?Serving the World?s Poor, Protably?1, the point was made that the world?s poor, rather than needing to be sustained by assistance from the developed world, has the potential to create protable businesses on its own. is major shi in perception of what the authors have termed the bottom of the economic pyramid provides a possible path of escape for the world?s developing economies from the cycle of poverty and dependency that has been predominant since the end of the colonial era.Graphically the authors portray the world?s economic output in the simple diagram ?updated by the author? shown in Figure 1.? Research Fellow, Waseda University Institute of Asia Pacic Studies. Professor of Management, Kansai Gaidai University, Osaka, Japan?     ?Stephen A. Zurcher194So even though the per capita income at the bottom of the pyramid is low compared to the more developed ?Tiers 2 and 3? or fully developed ?Tier 1? segments, the aggregate income of the 5 billion plus members of the bottom of the pyramid sector is valued at $5 trillion dollars, about that of Japan as a whole and approximately one third of the USA total economic output in 2010.An interesting point the authors make about the bottom of the pyramid buying patterns is that, despite what one would assume, the prices paid for basic goods within the less developed communities are oen higher than in those areas of more auence. Table 1 is a simple outline of such price dierences between two such communities in Mumbai, India.3Why the poor pay more for basic goods, when demand on a per capita basis is higher, is beyond the scope of this article. But the fact that the poor do pay a premium for basic goods is interesting as we look at the use of healthcare services in the developing world.Figure 1?e World Pyramid2Table 1.?Price dierences between poor area and auent area ?example in Mumbai, India?Item Poor Area Auent Area Premium Paid by poorCredit fee annual interest 600% 12–18% 53 timesWater per Cubic meter $1.12 $0.30 37 timesPhone call per minute $0.4–0.5 $0.25 1.8 timesMedication for diarrhea $20 $2 10 timesRice kilo $0.28 $0.24 1.2 times?     ?195Healthcare Information Technology Trends in the Developing World3.?Business eorts examples in healthcare for the Bottom of the Pyramid segmente aggregate $5 trillion in spending by the Bottom of the Pyramid segment, of course, is divided into many segments. Not surprisingly the largest segment is food, but healthcare itself is a signicant portion at an estimated $158.4 billion in spending, as shown by the top le square in Figure 2 that outlines this point4:An example of successful business that has taken advantage of the spending on healthcare in the developing world is a company called Vestergaard–Frandsen based in Denmark.5 e company was founded in 1959 and has a variety of products specically designed for use in the developing world. ese products include mosquito nets, water ltration devices and tent tarps that kill ies to prevent the spread of disease. One particular business success that has saved thousands of lives as well is the work Vestibular–Frandsen did with the Carter Center, founded by former US President Jimmy Carter, to help lter water so that the spread of guinea worms in the consumption of pond water is prevented.Larger companies such as Procter & Gamble are now also expanding their business eorts within the healthcare eld in the developing world as economic growth in Europe, the USA and Japan slows. Recently General Electric transferred its headquarters for its 115 year old medical imaging technology to China from the USA to take advantage of the growth opportunities in healthcare in China.6 e expenditure on healthcare in Asia makes up the majority of the worldwide bottom of the pyramid spending on healthcare. Asia represents $95.5 billion of the worldwide total. Of that amount about Figure 2?Estimated Bottom of the Pyramid market size by sector?     ?Stephen A. Zurcher19650% is spent on medicines,7 which is similar for other regions such as Africa and Latin America,4.?Electronic Medical Record and Free Open Source Sowaree healthcare industry is a data driven process. Metrics are recorded by doctors in every engagement with the patient, for example, temperature, blood pressure, blood count, etc.8 In most of the developed and developing worlds that data is recorded on paper and led into hardcopy collections. Recently hospitals in Japan, the USA and other locations have started to migrate to the health metric data collection and storage from a paper based method to an automated digital process. e product that is used to do this work is usually called an electronic medical record ?EMR?.In the developing world the benets to digital capture of health data are quite signicant for the patient, the hospital and potentially the country as well. Tracking patient usage of medications to insure proper usage, for example, can positively aect the outcome of the individual patient and, in the case of communicable diseases, for the country. But the challenges to deploy an advanced information technology system in resource challenged environments are signicant. In Japan, according to a recent study on EMR usage in the country, the cost of setting up an EMR solution is $10,000 per bed.9 In the developing world that gure would stop any deployment of EMR at all. As a result of the high cost of commercial licensed soware for EMR from traditional vendors, a growing trend in the developing world is the use of free open source soware ?FOSS? for EMR. Licensing fees for such products are generally free. e products are coded in such a manner that the source code is viewable and modiable, given licensing requirements, by any users of the product. Customization therefore is very easily done with FOSS EMR soware, the primary limitation being programming resources to make changes.Open source soware is a major trend within the commercial information technology market. Notable successes include the Linux operating system and the Open Oce productivity suite that is now currently maintained by Oracle Corporation ?which is being used to write this paper?. Regarding EMR development, there are currently at least twelve EMR products available commercially that are based on FOSS practices.10 e author volunteered briey in 2010 for one such product, OpenMRS ?Medical Record System?,11 which has been developed and maintained at the historic Regenstrief Institute12 at Indiana University in Indianapolis, Indiana, USA. OpenMRS is currently in use in over 30 countries in both the developing and to a lesser degree developed world as well. It has gained a strong foothold in Africa, in Kenya for example, where there is a long term relationship between medical schools of Indiana University and Moi University under the name of Indiana University–Kenya Partnership.135.?Business modelDespite the low to zero cost of FOSS EMR soware licensing, there is a challenge that any healthcare information technology company faces in building a sustainable business model, that is ?     ?197Healthcare Information Technology Trends in the Developing Worldprotable, for their eorts. In the literature review for this paper, I found many examples of FOSS EMR deployments in the developing world that were determined to be technically successful but did not address how the eort would continue on in the developing country beyond the initial phases of setting up and achieving working status of the EMR solution.14 e challenge for any rm in starting up a new business is to create a viable business model that captures expected costs and compares that to projected income to determine if enough prot from the eort will be created to keep the business viable. A business plan is the standard document used to determine protability of a rm. is is a huge challenge for any business as it starts up and continues to operate from month to month or quarter to quarter. is challenge for healthcare information technology rms in the developing world is the primary focus of this paper.Fortunately there exists an organization based out of the Wharton School of Business at the University of Pennsylvania that addresses the business challenge which social business rms will be confronted with, that are attempting to do social good through its business eorts to improve the lives of its customers ?as in the case of Vestergaard–Frandsen of Denmark, cited above?. e institution is called the Wharton Societal Wealth Program, which was established in 2001 with the goal of helping to create business models for rms that have the dual goal of achieving social good via its eorts and also to be protable. e Wharton Societal Wealth Program has created guidelines for social ventures to follow that will help them to become successful.15 Of interest to this paper is an EMR case study in Botswana they have recently documented.16e Wharton Societal Wealth Program helped to create a business in Botswana, located close to South Africa, based on the use of EMR in the country. e social goal for the project was to help reduce the incidences of AIDS related deaths in Botswana. A prot goal of $80k per year was set as a target. Doctors at the leading healthcare clinic in Botswana were consulted on the EMR deployment prior to its implementation to try to assure acceptance by them of the new information technology solution. A pilot study was approved and an exit strategy was created in case the business proved to be unsuccessful. ese points are part of the formula that the Wharton Societal Wealth Program recommends to be completed prior to the inception of a social venture. It is essentially a specialized business planning exercise for the rm engaged in a social business venture.e revenue model of this project was based on an assumption that the EMR solution would provide clinical data for pharmaceutical rms who promote their drugs to the local patients. at turned out to be not possible due to patient privacy concerns, so the revenue model was switched to a more standard support fee arrangement by the new business that would be paid potentially by the clinic. At the time of the writing of this paper, the business model for this project was still uncertain and there is a chance that the project may be cancelled.e author was able to contact via the OpenMRS project leaders in Indianapolis four rms that are using the FOSS OpenMRS solution in their respective countries. A brief survey was collected from these four rms, located in Asia and the Americas, regarding their use of FOSS for their customers and ?     ?Stephen A. Zurcher198the existence of a business model for their eorts. e four rms had from 2 to 5 years of experience in working the healthcare information technology business. e number of employees ranged from 10 to over 50 per rm. e number of patients for the rms ranged from 1,000 to over 2,500. e number of years that each rm has worked with OpenMRS ranged from 2 to 5. ree of the four rms worked with other FOSS or had written their own soware for their business eorts. Each rm did have a business plan in place and had written that business plan at least a year ago. Each rm at this point was not protable but expected to be protable in the next year, other than one rm that dened itself as a non-prot and therefore did not intend to be protable in the traditional sense.6.?ConclusionsAlthough the developing world is oen overlooked in terms of business development by major rms and by academic business journals, Prahalad and others have made the point that there is a potential market for new business activity within the Bottom of the Pyramid segment. ere already is a large healthcare segment currently with the Bottom of the Pyramid countries on aggregate. is paper has focused on an emerging market segment that is the intersection of healthcare and information technology called electronic medical records. It is composed by free and open source soware primarily for reasons of product cost and easy customization to local requirements. A challenge, however, for the rms that are attempting to build a business, oen a social business that intends both to provide social good for customers and to make a prot, is to have a sustainable business model.Since the number of rms I have collected data from is quite small, these results cannot be considered statistically relevant. I am reporting the results only for illustrative purposes. It is noteworthy, however, that each of the rms did have a business plan in place and had one for over a year. Also noteworthy is that none of the rm was currently protable, but has plans to be protable in the next year. Given the EMR case study results for the Wharton Societal Wealth Program in Botswana and the preliminary survey results above, it is clear that a successful business model for FOSS EMR solutions in developing countries has not been established yet either in the academic literature or in the eld for EMR usage in the developing world. More research is needed in this emerging area of healthcare information technology in new markets.Further research by the authore author plans to expand his survey of businesses in the developing world to another FOSS EMR solution. at solution is called openEHR,17 which also has a worldwide deployment of their product. Regarding OpenMRS, a worldwide meeting taking place in Rwanda in the fall of 2011 is scheduled and, if possible, the author will continue his engagement in person with the OpenMRS implementers at that meeting. The author has also been contacted by a major university in a developing nation in Asia that is planning the deployment of an EMR solution on a nationwide basis. ?     ?199Healthcare Information Technology Trends in the Developing Worldis engagement is also scheduled for later in 2011.References1 C. K. Prahalad and Allen Hammond, ?Serving the World?s Poor, Protably?, Harvard Business Review, September 20022 Ibid, page 73 Ibid, page 84 World Resource Institute, ?e Next 4 Billion: Market size and Business Strategy at the Base of the Pyramid?, 2007, page 295 Donald G. McNeil Jr., ?A Company Prospers by Saving Poor People?s Lives?, New York Times, February 3, 20096 Rachael Layne, ?GE Moves 115-Year-Old X-Ray Unit?s Base to China to Tap Growth?, Bloomberg News, July 26, 20117 World Resource Institute, ?e Next 4 Billion: Market size and Business Strategy at the Base of the Pyramid?, 2007, page 358 William M. Tierney et al., ?Experience Implementing Electronic Health Records in ree East African Countries?, MedInfo 2010, C. Safran et. al. ?Eds.?, IOS Press, 20109 Shinji Kobayashi, et al., ?Open Source Soware in Medicine and its Implementation in Japan?, e Journal of Information Technology in Healthcare 2009, 7?2?, pages 95–10110 Cecily Morrison et al., ?Report on Existing Open-Source Electronic Medical Records?, University of Cambridge Technical Report, February, 201011 OpenMRS Community, http://openmrs.org/12 Regenstrief Institute, University of Indiana, http://www.regenstrief.org/13 Indiana University–Kenya Partnership, http://www.iukenya.org/14 Iwan T. Pambudi et al., ?Patient Record Information System ?PaRIS? for primary health care centers in Indonesia?, Technology and Health Care, 12 ?2004?, pages 347–35715 James D. ompson and Ian C MacMillian, ?Making Social Ventures Work?, Harvard Business Review, September, 2010, pages 66–7316 Ibid, page 7217 e openEHR Foundation, http://www.openehr.org/home.html

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Healthcare Information Technology Trends in the Developing World

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