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My Proximie

Premal Pajwani has spent almost 30 years as an analyst and investor in the global healthcare industry. He is the Founder & CEO of PRP Advisory Ltd, a healthcare consultancy and advisory practice. What follows is an interview that has been edited for clarity.

There are three broad observations to make with regards to the impact of COVID-19 on the $10+ trillion global healthcare industry:

First, it’s important to recognise the remarkable sacrifices being made on the frontline by doctors, nurses, care workers, and support staff. They are the heart and soul of the global healthcare industry and their value to society will need to be re-appraised. Second, and what has been particularly heart-warming, is the level of cooperation and collaboration between key stakeholders in the battle against COVID-19 and the urgency with which the industry has responded. The pandemic is global and, fortunately, so is the response, especially by researchers and scientists. Third, the healthcare industry has an opportunity to repair its bruised reputation in areas such as pricing and access and, so far, the response has been reassuring and encouraging.

The level of collaboration has been simply phenomenal. Many are throwing aside decades-long rivalries and building important bridges across medical specialities, modalities, geographies.

It is these connections and collaborations and the rapid sharing of cross-sectional expertise which will help us out of the pandemic and also create a blueprint for tackling future challenges.

In the area of treatments and vaccines, for example, there are hundreds of projects underway by large Pharma, smaller Biotechs, university labs, private foundations, and government agencies. Medical device, health technology and life science companies have done their part in ramping up the production of vital equipment, ventilators, test kits, and hospital supplies, often open-sourcing designs to ease bottlenecks. Hospitals and clinics suspended profitable surgeries to accommodate COVID-19 patients. And insurers agreed to absorb COVID-19 related costs and are leveraging their analytical strength to support access and care.

Headwinds ahead

Although I remain cautiously optimistic on the availability of treatments and vaccines by 4Q, it is possible we will not have an ideal option widely available for another 18–24 months. The risk of a second or third wave is all too real and achieving herd immunity takes time. So, even though the healthcare industry is macro-economically more resilient than many others, there clearly will be headwinds. We have seen a significant reduction in patient interactions with doctors leading to the postponement of treatments and surgeries. Hospitals, clinics and providers are facing significant pressures which could lead to some closures and consolidation. This could lead to delays in new equipment purchases over time. There will also be a slowdown in the rollout of new drugs and devices and a delay to clinical trials. The rise in unemployment could see a shift of patients from private commercial insurance to government plans, with downstream implications for all healthcare players. And, as we have seen in prior recessions, cash-strapped patients will look at “buy-downs” choosing lower-priced treatment options where possible.

Having said this, the industry is financially better funded than others and has repeatedly shown its ability to adapt. It has also been on a decade-long innovation upswing across all the three key sub-segments — BioPharma, Medical Technology and Services. In fact, the speed and agility with which the industry has responded is a testament to decades of investments in R&D and a willingness to explore risk-sharing collaborative models.

Learn and adapt

A broader question is how the industry will adapt in a post-COVID-19 world. The changes I anticipate in the mid-term include efforts to rework the role of hospitals, clinics and the primary care network, an accelerated adoption of digital health technology throughout the industry and most functional areas, a greater acceptance of telehealth, telesurgery and digital therapeutics, efforts to de-globalise production lines and supply chains, a regulatory push to create better pandemic preparedness in terms of healthcare buffers and system capacity, a significant ramp in the % of GDP spent on healthcare in emerging economies, and greater funding into R&D of infectious disease helped by creative funding models. It’s also fair to assume that competition from non-healthcare players will increase.

Of these changes, the rapid adoption of digital technology and the broader construct of telehealth will be most significant in the near-term. There are so many instances where online consultations are equally effective and offer significant convenience to both docs and patients. The two biggest barriers in the past were physician reluctance and lack of reimbursement. Both of these have been pierced by the pandemic. Reimbursement is rapidly improving and docs are incentivised to adopt this as a way to reduce the risk of infection.

Telesurgery is also likely to see rapid adoption helped by technology advances including network speed, robotics, augmented reality and AI. Travel will remain challenging for the foreseeable future making proctoring and mentoring more difficult. Medical tourism is also likely to remain constrained for a while. However, there is no reason why patients cannot receive the same expert care from a surgeon sharing their knowledge remotely, even from another country. Surgical platforms like Proximie are seeing fast adoption because it allows experts to remotely guide a local surgeon during a procedure. Such a portal can also help educate and train surgeons on new products and treatment protocols quickly. This is a relatively low-cost, easy-to-use technology that is effective and can be rapidly deployed anywhere globally.

Platforms that can help save time, money and lead to better patient outcomes are what healthcare systems need especially given the ongoing pressures. For me, this a perfect example of a win-win-win. And it is collaborative and innovative solutions such as this that gives me hope that we will find a way out of this pandemic, a bit bruised perhaps but also more resilient and stronger.