How do you think COVID has changed the diagnostics space and healthcare segment?
COVID-19 pandemic placed unparalleled challenges on modern healthcare systems and became a catalyst for change – a defining moment for all of us in healthcare to re-imagine the future of healthcare.
In the past few months, the healthcare industry has vividly demonstrated its resilience, agility and ability to bring innovations to market quickly. It won’t be wrong to say that we’ve made a decade of progress in just a few months.
Healthcare industry which is usually the last to adopt digital interventions was the first to make use of tele-health services in preventing, diagnosing, treating, and controlling diseases during COVID-19 outbreak. As we have seen the crisis unfold; healthcare has been delivered at locations previously reserved for other uses. Schools, hotels and dormitories have become hospitals. There are mobile vans for sample collection and make-shift centres in parking lots for testing.
Many countries including India built thousands of intensive care unit (ICU) beds in just a few weeks, vaccine trials started months sooner than they normally would, millions of healthcare workers risked their lives to care for critically ill patients.
It’s been truly inspiring to witness this transformation. And although we’re far from out of the crisis, our industry has made tremendous progress in these months that is now reshaping healthcare delivery across the spectrum.
During the crisis, even medical diagnostics emerged as the first line of disease containment and the most critical public health measure implemented at an unprecedented scale in human history. WHO’s T3: Test. Treat. Track initiative to prevent the spread of COVID has put diagnostics in the spotlight and highlighted an increasing requirement for better testing capabilities and importance of quality. People have started to understand molecular/ genetic testing and hence this has resulted in the increase of investments, by large private labs like SRL, to set up more RT PCR labs across the length and breadth of the country.
The ongoing crisis has also reinstated the fact that the healthcare and diagnostics sector can reap out great benefits for a country like India. Our country can very well be turned into the ‘Laboratory of the World’ with the government joining hands with the private sector, by redirecting its focus on life science, healthcare and diagnostics. The future of healthcare will be shaped by innovative and modifying care delivery models for integrated and value-based care.
How has the role of the diagnostics sector evolved over the years? Moving ahead, which are the segments that have promise?
70% of decisions that medical experts take on patient treatment depends on diagnostics tests, but at the same time, the diagnostics industry in India accounts for only 5% of the total health system costs.
However, with the Covid pandemic, the segment is coming out in front and has probably opened up both awareness of tests using RT-PCR technology and also expanded the availability and capacity across the country. The consumer is going through an attitudinal shift towards understanding their immunity better and a preventive approach. At a larger level, with growing awareness amongst consumer, large chains are working towards improving their accessibility across geographies, ensuring the highest level of tests being available through the hub and spoke model.
There has been a drastic shift in consumer preference for the digital and growing demand for online booking, thereby bringing diagnostics to home. We have witnessed a 60-70% growth in this segment as Home collection has become the preferred mode for tier 1 cities, post the pandemic, and we foresee this to continue even post-COVID. The recent pandemic has increased both the awareness of RT-PCR technology and the capacity across the country. While routine blood tests will remain the mainstay of the overall industry, there is a definitive trend towards genetic testing.
In the tissue diagnostics space, digital pathology is the next biggest revolution in the making and we are continually evolving and investing in AI and technology. With an AI system, subjectivity to screening digital pathology slides can be reduced and linked to the Big Data system to explore references to similar cases reported in any part of the world. Hence, in continuation with our transformative efforts in the field of Artificial Intelligence in Pathology, we launched the second phase of our AI solution development engagement.
While the phase 1 focused on AI models in Cytology and yielded an algorithm for screening of liquid-based cytology slides for Cervical Cancer, the second phase will delve into AI models in Histopathology, majorly focusing on Breast, Colorectal, and Prostate Cancers. As a part of this engagement, our senior Histopathologists will not only lead and set processes for the AI algorithm development but will also provide research insights required for the digitalization of pathology in India. This is truly one the ‘Firsts’ in our industry and SRL is the pioneer in the category.
What are the digital trends being witnessed by the sector and how is SRL driving the change in it?
Diagnostics is the first step to disease management and is like the motor that drives healthcare to understand diseases. While it does the job via the same methods as it did for the last 100 years, the times are changing.
Slowly but surely, diagnostics is going digital. Digital technologies are pushing the field into becoming more efficient and more scalable.
Digitalization in diagnostics is also transforming the job of pathologists into a more creative and data-driven one while it is allowing patients to receive diagnoses faster and with higher accuracy.
The pandemic had also made this sector realize the need for employee safety. While patient safety is of utmost importance to us, employee safety is equally important. Hence, going forward we would like our pathologists, oncologists, and technicians to have an option to work from home and hence we have established Digital Pathology labs within our reference laboratories in Gurgaon, Mumbai and Bangalore. These Digital Pathology labs will allow technicians and lab doctors to read images remotely and enabling real-time virtual collaboration between their multi-disciplinary care teams. Remote reviewing of pathological cases is also essential to prevent delay in critical patient diagnosis and care, particularly during a crisis and our work with Microsoft will also pave the way to this transformation.
The other shift that we have witnessed is the shift in customer preferences. More and more people are now opting to book online tests, home collection and telehealth is the new mode of diagnosis. There has been a 70% growth in this segment as Home collection has become the preferred mode for tier 1 cities, post the pandemic, and will foresee this to continue even post-COVID.
With the growing relevance of connected devices, IoT and wearable, a new era of self-monitoring has been ushered in. Through equipment, now available at home, and AI technologies, the role of diagnosis can be enhanced and changed drastically. The sum of this shift amount to a highly-informed customer base that is aware of their healthcare needs.
As the nation underwent a lockdown in mid-march, the diagnostic industry has faced multiple changes and developments.
The industry faced a massive decline in the B2C business as the footfall of walk-ins fell drastically and combined with restrictions on elective and OPD services at hospitals and clinic, B2B business were majorly affected in Q1 as well.
However, we gained momentum in Q2 and were able to reach our pre-Covid numbers for our non-Covid business in October. 90% of our business has been recovered and with our current strategy focused on expansion, we plan to recover our growth in the coming quarters. We are optimistic that our FY 20-21 revenues will be similar to last year, and FY 21-22 will not be impacted by the COVID crisis.
We in a way knew this was coming but as things were constantly unfolding, even the diagnostics industry faced shrinkage of manpower as healthcare workers were affected, quarantined or terrified to work and essential supply chains were disrupted due to the lockdown. As the situation was developing and more understood, protocols on testing strategy, process and pricing kept evolving and changing. While these proved a challenge, the future diagnostics players should take learnings from the situation as they plan ahead.
For future laboratories to deliver on quality care, joining forces in healthcare networks and collaborating with other healthcare providers would be the key, in order to fulfil their role as a care partner in a patient’s health journey. The ‘Diagnostics of the Future’ is envisioned to be built on smarter, safer and sustainable lab setups which will be driven by design thinking and smart technology to meet the most pressing challenges.
To provide personalized care, the laboratories would need to find newer ways to tackle changing demand for healthcare services, adopt smart integration technologies, data science and analytics. In the coming future, Clinical Lab 2.0, fueled by the pandemic, will redefine the role of diagnostics in the care continuum, aligning with value-based healthcare. For laboratories to take on their future role, another vital aspect will be to focus on their healthcare workers’ well-being and investments on training and development of human capital.
The current situation has presented business leaders with an opportunity to align themselves with a more sophisticated and flexible use of technology and a time to re-strategize and re-engineer their business model. To thrive in the future, the diagnostics players will have to balance their short-term needs with longer-term planning considerations and build the acquired resilience early.
According to you what are the segments where the government should invest to ensure accessibility of healthcare to everyone on the go? What more can India do to boost its diagnostics landscape?
India has been on a digital-first trajectory for a few years, and with the country moving towards strengthening their response to the pandemic, a drastic shift has been seen in the use of apps and digital tool for healthcare and essential purposes. The Indian digital healthcare market was valued at INR 116.61 Bn in 2018 and is estimated to reach INR 485.43 Bn by 2024. And India’s goal of becoming a trillion-dollar digital economy by 2025 is going to further open new possibilities in technology powered development of the healthcare sector. The National Digital Health Mission is an essential step by the Central government in the same direction which will make healthcare services more flexible, accessible and affordable to masses and can help make healthcare on the go a reality. While the government is increasingly taking steps to encourage healthcare start-ups, more financial support is needed to develop innovations and tools that can enable the easy interface and affordable doctor-patient consultations; connecting doctors, patients, pharmacies and diagnostic clinics.
In diagnostics space, advancements in specific technologies such as computerization, digital imaging, multiple fibre-optic communications, and robotic light microscopy are expected to drive future market growth in digital pathology. In the future, we will also see an increase in the integration of artificial intelligence (AI) into digital pathology. Most current researchers are focusing on developing AI to improve the software used in digital pathology. SRL is already working closely with Microsoft to develop algorithms that would provide tools to pathologists for faster and more accurate diagnoses of diseases such as cancer, remotely. This is especially useful in remote areas as you can get the data to the doctor in no time. This ability to serve remote areas is one of the biggest problems in healthcare. While the national government has multiplied its investment in Digital India mission in 2020 to support progress in AI, machine learning and 3-D printing, the government should look at investing more in these emerging technologies specifically for the Healthcare sector.
The pandemic in the country led to various innovations and techniques with an aim of accessibility to the people across India. These innovations can now be leveraged to provide on the go healthcare services, especially in rural and Tier 3, 4 and 5 towns of India. One such way is Mobile Units, which can be fitted with ECG, ultrasounds and various other elements and can be made accessible to smaller towns and cities, which face a challenge of infrastructure and human resources. Such units were also used for COVID sample collection across the country. Buses were transformed into mobile units enabling the safe collection of samples. Although slowly, the country is moving towards building a stronger healthcare system and owing to pandemic numerous avenues and opportunity has been opened for India to take point on.
Another such opportunity would be to look at getting more and more people under health insurance so that out of pocket expenses are reduced. Despite the testing cost in India valued at 1/5th of the cost of the USA, a significant number of middle and lower-income families cannot afford them in India. Schemes like Ayushman Bharat when combined with diagnostics can present a great opportunity for the segment and the poorer patients in the country. This has the potential to provide individuals access to diagnostic services with a simple Ayushman ID. If diagnostics tests and OPD coverage can be covered under medical insurance for paying patients and by government schemes like PM-JAY for weaker sections of the society, the healthcare segment can be made stronger and more integrated.
Union Budget 2021 expectations for healthcare?
While the healthcare segment has been a key focus area and part of country’s development plan through various comprehensive initiatives including Swachh Bharat, Ayushman Bharat, Skill India, National Digital Health Mission and now ‘Mission Covid Suraksha, the long-term response to the pandemic needs a significant part of budget allocation. The healthcare policies need to take into account the entire value chain of healthcare – prevention of diseases, treatment and health insurance. It is vital to connect all three to achieve the goal of universal health coverage.
We have also witnessed how during Covid India’s middle class was worst hit by the pandemic followed by the upper middle classes. Hence, the government should work towards getting more and more people under health insurance so that out of pocket expenses are reduced. Although the cost of testing in India is valued at 1/5th compared to the USA, a large number of middle and lower-income families cannot afford them in India. Combining diagnostics with schemes like Ayushman Bharat will have potential to provide individuals with access to diagnostics services with ease. It is time for the government to open up micro-insurance and ailment-focused schemes that are innovative and viable for lower & middle income groups.
The pandemic has reinstated the fact that, the government needs significant investments in funding researches on infectious diseases and strengthening the capabilities of institutions like the National Institute of Epidemiology in Chennai, the National Centre for Disease Control in New Delhi, the Centre for Infectious Disease Research in Bengaluru, and the National Institute of Virology in Pune. Avian flu, SARS , MERS, Ebola, Nipah, etc, are a clear example of the warning signals that the governments worldwide have ignored this segment for a long time, and now with bacterial infections becoming increasingly resistant to antibiotics, common infections can potentially become life-threatening in the future. To achieve this, it will be pivotal for the government to join hands with the private sector, while redirecting their focus on life science, healthcare and diagnostics. Public-private partnerships can play a very significant role in capturing greater space in the health sector.
What is your outlook for the year 2021? How do you envisage it?
In the last few months, the healthcare sector has been undergoing a constant wave of transformation. From shifts in care settings to heightened expectations for stronger cost management and better consumer experience, healthcare providers like SRL have been nimble and adaptive to the changing scenarios. Going forward, in my view, businesses that can make bold moves in response to the market transformations and collaborate with other healthcare providers to play a vital role as a care partner in a patient’s journey are going to be profitable and successful.
In the wake of COVID-19, the initial scramble to shutdown OPD and elective surgeries and switch to a predominantly remote care model is now giving way to a more measured assessment of healthcare needs of the population, evaluation of the care delivery models using telehealth technologies as enablers, and a long-term survival strategy for hospitals and health systems. The change in consumer mindset also gave way to the increasing demand for home visits vis-à-vis lab walk-ins. And it is expected that the healthcare sector, in general, will further embrace technology and automation to better leverage growth.
Besides, in 2021 we will continue to utilize our people and technological resources to withstand our leadership in the Reference laboratory segment with a focus on Next Generation Diagnostics. The current clinical practices are going to be impacted by the groundbreaking genomic testing, which is triggering a revolution to start a period where the medicine is preventive, personalized, predictive and participatory, and rooted in the human genome project. We will continue to work towards making our market share stronger across geographies that we operate in by way of consolidating organic growth and constantly evaluating inorganic growth opportunities.
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