Understanding Ukraine’s Plaсe In Global Healthcare Innovation

Published in World
Monday, 24 June 2019 10:54
The life-and-death nature of the healthcare industry might be a factor to slow the adoption of new technologies in this sphere. However, the digitalization of hospitals is underway all over the world, machine learning and bots are being applied to diagnose patients, and the internet of things is slowly making its way into our bodies.

UkraineWorld sat down with Stephen Oesterle, a Venture Partner at New Enterprise Associates (NEA), and Nataliya Siromakha, Associate VP Engineering, Kharkiv Delivery Center Head, GlobalLogic, to discuss the latest trends in healthcare innovations, Ukraine's place in setting these trends, and the ways in which Ukraine could modernize its healthcare system.

Which three key benefits has the healthcare industry received from technology adoption so far?

Stephen: Healthcare has been one of the last areas to really be impacted by digital transformation. It's been widely prevalent in media entertainment industry, retail, taxes, hotels etc. The reason that technology advancement happened more quickly there is that the data was pretty organized.

Let's take banking. I can come to Kyiv and put my bank card in, and the ATM gives me money. It knows everything about my banking story. I could not do that if I went to the hospital here and I had chest pain. Ukrainian doctors would not be able to learn much about me on the internet because the data is unstructured. Most of it is in medical records. It's written by hand. Hospital records don't speak to each other. The imaging records don't communicate with the medical record.

Therefore, three top things in which I've seen technology impacting healthcare would be three A-s: access, affordability and accountability. 

Most people don't have access to healthcare.

There are 7 billion people on the planet, only about 2 billion of them have access to health care.

We will never train enough doctors or build enough hospitals to take care of all the people. We must actually use technology to do this. That's why the evolution of wearable and implantable sensors to monitor health, their ability to connect to tablets, smartphones, to be able to monitor patient's health and advise them about it is already happening.

And it is cheap. This is really how we solve one of the biggest problems in the world — healthcare is too expensive. In the United States, we spend 20% of GDP — 3,5 trillion dollars — on it. It is an issue everywhere. China is now spending about 6% of its GDP on healthcare. It's a huge number.

While providing better access to healthcare we should be ultimately keeping track whether we are doing good or not. And if not — how could we do better. That is accountability.

How does technology adoption in the healthcare industry work on the international arena? Which countries are the main hubs of technological advancements in healthcare?

Stephen: There are two issues at play when you look at where technology is being used. First, it is regulation. Healthcare is a heavily regulated industry, and for a good reason. The only industry that it is similarly regulated is the airline industry.

When you want to bring new things to healthcare you can't just flush them out.

You have to get regulatory approval for them. Now, it turns out that certain areas of the world have less regulatory constraints. That's largely Europe: Germany, England, Italy. There you can see some of the earliest advances in technology because their regulatory process is much looser than the one in the United States or Japan or China.

The other places where you see technology being played out more quickly is where people can actually pay for it. Some technology is cheaper and that does play out in places like India. However, more sophisticated technology like an artificial heart or a new cardiac valve or a new hip replacement generally are introduced where either the system pays for it (United Kingdom), or where there is a fairly mature insurance product doing that (the United States)

In places like Israel, the adoption of technology it's not played out because it's such a small population of people. There's no market for it. That's why Israeli companies generally develop their technologies but go to the United States or Europe to ultimately commercialize them because the market is so much bigger there.

And what about China? China definitely has market and has capacity. And you also mentioned that China increased its spending on health care. Has China brought something to the table of global innovations in health care?

Stephen: China does some really good manufacturing technology. But in terms of innovation, I haven't seen a lot in China, but the situation is changing.

Healthcare, medical products come from startups for the most part. Big companies often innovate both internally and through outside sources including acquisitions and outsourced R&D. They generally buy innovation. Startups generally occur where there is venture money. Recently, there has been more of it in China. If you want to participate in the Chinese market you have to be a local company. So you're starting to see local companies being developed and funded by U.S. venture actually because that's the only way to that market.

Within the next 10 years, the Chinese healthcare market will be the single largest market in the world.

Let's transition to Ukraine. How does Ukraine contribute to the world's progress in healthcare-related technologies?

Stephen: You already are developers of innovation in healthcare. In fact, Ukraine has a lot of similarities to Israel. You have some very high-quality science and engineering. There are really good technical universities and you have a legacy of people working in the engineering environment.

In my opinion, Ukraine has a really good opportunity to take this engineering talent and develop interesting things in the medical technology world, medical device world, automotive as well.

Connectivity, IT is very common in your country. That's why Ukraine has a very good chance to move this talent to develop products on their own.

There are two factors that might hold this process back. First, you need risk capital. There has to be significant capital around that's intelligent. I know that you have some wealthy people, but they're not necessarily intelligent investors. However, that's generally seasoned venture capital people who know how to run companies and how to manage them. I don't think that the venture capital world in Ukraine is mature enough to fully help build companies.

Second, you also need a culture of entrepreneurism — which was suppressed by the Soviet Union. The other place that I see that heavily suppressed is Japan, but that happened for different reasons. You don't see a lot of medical innovation in Japan because the Japanese culture doesn't celebrate individualism. The Japanese people don't like it when someone tries to stand out on their own as opposed to the United States where people celebrate individuality. Meanwhile, in Soviet Ukraine for many decades there was no incentive to be an entrepreneur. That's why there is not much business legacy there's here.

I think Ukrainians are starting to see opportunities. You saw the potential in software. There's a lot of entrepreneurism around software and there's is no surprise that GlobalLogic has more than four thousand software engineers in Ukraine. There were a lot of really interesting companies that started up here. One of the beauties of innovation in software is that it is not capital intensive. You don't need huge amounts of money to develop a software company and you don't need huge amounts of time to create a product. The average life cycle developing a medical device is twelve years. And it's very expensive because you have to do clinical trials to prove that they're safe and effective.

For software, it doesn't take a lot of money — it takes a lot of imagination. Ukraine's already winning at that.

Nataliya: Software development in Ukraine is a very open and dynamic area. Our engineers have a lot of innovative ideas that we are bringing on the table to our partners. These ideas are helping our partners to review their product plans and their strategy.

 

Let me show you a few examples of how Ukrainian engineers can influence the industry. For instance, there is telemedicine and there is a need to assess patient condition distantly. We have an app for skin cancer recognition. You just take a picture of your mole or some suspicious skin area. Machine learning algorithms will assess it and give a probability of some issues. But the process doesn't stop there. If you are able to connect to your doctors and send them a picture with all that assessment, they could decide whether you need to visit a clinic or not.

We are also working on virtual reality prototypes, including the ones for Google Glass. Healthcare is not only software or systems that support doctors, the sphere also includes factories that are manufacturing all the medical instruments and devices. Our prototypes help to set up production on healthcare factories. The process is very strict there: you have to document each and every step in order to be able to review all those steps later. Technologies that we developed and provided to our customers support such recording using Google Glass. Thus, workers of the factory do not have to fill in any forms — the whole production process is automatically recorded.

We are able to be innovators indeed. We just need open markets and bright minds that are graduating from the universities.

Ukraine is currently implementing a healthcare reform which is mostly focused on administrative aspects: how the hospitals are organised, how the state finances healthcare etc. Digitalization of state hospitals is almost non-existent. The state spends 7.1% of its GDP on healthcare, which is not that much. In such conditions, is there a place for technological development? If yes, how should it be handled?

Nataliya: The whole idea of healthcare reform is actually to change the focus from the money that is simply coming from the government. Healthcare institutions now change the focus on serving specific patients.

Due to the reform, state financing is being distributed between hospitals solely based on the number of assigned patients, not the number of patients that are staffed by per day. This is a perfect stimulus for our hospitals to apply the digital transformation. Their goal now is to minimize the spending on each patient, to serve patients quicker and better so that they don't come back with any complications. So if patients have few visits, they are satisfied and healthy, hospital wins. This is a matter of efficiency now.

The best way for hospitals to become more efficient is actually to go digital.

Having all the chronic medical records, storing all the information about the patient and being able to consult with specialists from outside the hospital is key. It will take hospitals some time to understand how this revenue economy works and how to make it better, but this will happen.

Surprisingly, a positive thing is that all these hospitals are not digitalized at all. They still have everything on paper, they don't have fast computers and fast internet. However, this also means there is nothing to transition from. They have to create the digital systems from scratch and that is faster and cheaper.

Stephen: This is an interesting opportunity for Ukraine. There's not a lot of money. There's a lot of people. If you look at who consumes healthcare, it's generally people with chronic diseases: heart failure, diabetes, chronic lung disease, high blood pressure, asthma. These are all chronic diseases that can be monitored. There are sensors to monitor these conditions which are relatively inexpensive. You can transmit those data wirelessly to some database where you can begin to use various forms of machine learning.

You can do this with a bot. You don't need a person. It's been proven and this really works, for mental health even. You can just utilize mobile technology, wearable implant sensors, smart algorithms. This way, you can manage large populations of patients better than doctors.

Ukraine is not spending a lot of money on healthcare, and the infrastructure is not well developed. Then why bother building it? There's a new infrastructure — a digital one, where would you want to do that? So I'm pretty enthusiastic about it because you have in Ukraine some of the best software capability in the world, and you could really make a digital revolution in healthcare. The timing is perfect.

GlobalLogic engineers in Kharkiv have been developing R&D solutions for healthcare for some 15 years. How many of these developments have been actually implemented in Ukraine? And how many have been applied abroad?

Nataliya: The products we are working on are being applied worldwide. There are more than 20 million patients who are using devices that have been developed with the help of GlobalLogic.

We are also developing systems that are being applied in clinical trials in more than 70 countries across the globe. Those systems are being localized for all those different languages. We use these technologies in Ukraine as well. There are a lot of products that we see in our hospitals, airports, emergency care.

We also produce specific products and systems for care homes. This sphere is rather developed in the U.S. and Canada, but not in Ukraine. Our care homes do not have such systems since they are not digitalized at all.

In Ukraine, there are a few aspects which might potentially slow down the development of R&D solutions for healthcare — corruption, brain drain, and, since 2014, war with Russia. Which of these actually impact the development?

Nataliya: I don't think these problems are influencing IT industry overall and specifically our healthcare domain.

IT industry in Ukraine is growing. The trend of growth is 20% to 25% per year.

The trend has been persistent even during the last years. GlobalLogic has shown 32% growth of revenue in 2018 in Ukraine.

But what is affecting us is actually the availability of professional engineers. That is what we can get from universities. We work very closely with IT departments there to influence curriculums. We teach university teachers and lecturers. We provide universities with materials for teaching. We are working with students from their first year in university and we influence all the programs. We not only influence the I.T. specialists, but we also influence the specialities that are supporting IT — business analysts, project managers.

We do all this because we understand that that's the major risk for us. If the quality of education, the quality of an average engineer greeting from the university would fall, we as a company would fail and suffer.

We do understand there is a huge gap between education and business. In any country, education is usually behind business by at least a couple of years. That's the nature of education: you have to see what's going on in the world, gather the information, create a theory, make a lecture, and only then it gets to the students.

We want to minimise that gap. That's why our engineers go to universities. They teach students. They work with them on some specific tasks. That's our major investment in Ukraine.

The interview has been edited for length and clarity

 
 
VITALII RYBAK
analyst and journalist, Internews Ukraine and UkraineWorld

 

https://ukraineworld.org/articles/reforms/understanding-ukraines-plase-global-healthcare-innovation?fbclid=IwAR0DxXPrMtfUadjfF4Pb4BmuODIn0zmE4xQ-C7z6GeJ13X6lX_q28DaiinE 

 

 

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