Is Russia Ready for Health 2.0?
The Wikipedia article about health care in Russia starts like this: “Russia has more physicians, hospitals, and health care workers than almost any other country in the world on a per capita basis. However, since the collapse of the Soviet Union, the health of the Russian population has declined considerably as a result of social, economic, and lifestyle changes.”
The Russian health care system has been going through major changes to improve access and quality of delivery. Currently, health care expenditures account for roughly 4% of the GDP (vs. 15.2% in the US) and this number is projected to grow to 10-14% over the next few years. The reform that started in 2009 will continue through 2015. It is expected that about 40% of resources allocated to health care restructuring will be spend on improving infrastructures, including information technology.
Last week I was invited to be part of the conference “Health Plus Technology: Russia and Global Outlook,” jointly sponsored by the Skolkovo Foundation, Life Sciences Angel Network and viamedix. I was part of the opening panel on ‘Technology Intervention to Healthcare,’ which was trying to answer to the following questions: What is fueling the Health 2.0 movement — in the US and globally? What countries/regions are leading the way? And what are the factors and conditions of the industry’s acceleration? The Russian health care system could use a shot of Health 2.0, and so the underlying question was: Is Russia ready for a paradigm shift from top down to bottom up health care innovation? Is Russia ready for Health 2.0?
At the same time, answering a request to produce a Health 2.0 Russia CIS, I took this speaking engagement as an opportunity to meet a few important stakeholders and potential partners. The question ‘Is Russia for Health 2.0?’ took another meaning for me.
Since our first conference in San Francisco in 2007, our group has been asked to travel and participate in many international conferences. We now have a good idea of what’s happening in the industry around the world, and we’ve had a chance to form an opinion on the boosters and obstacles to a rapid development of the movement. Nonetheless, true to the Health 2.0 style, I decided to make my answer a collaborative effort so I sent a quick poll to our 50+ chapter leaders around the world asking them what these boosters and obstacles were in their part of the world. In less than 6 hours — some of them are not sleeping enough! — I had 46 responses from around the globe. This is one of the many reasons we love our chapter leaders. Below is a compiled version of their responses.
The conditions they identified as factors of acceleration for the Health 2.0 industry in their regions were:
· An entrepreneurial culture
· A critical need for innovation and/or some major health challenges that the system is unable to address on its own
· A well-oiled financing machine (including in early phase with Angel investors)
· A supporting ecosystem (health authorities, universities, medical centers, mentoring programs)
· Open health data
· Empowered patients driving demand
The conditions they identified as putting a break on the acceleration of the Health 2.0 movement were:
· Stakeholder resistance — especially from health professionals who, in many cases, are asked to do more and face increased liability with no extra compensation
· A buyer still TBD … Who should pay for Health 2.0 is still an open question. (Reimbursement systems are not adapted — especially for health promotion/wellness initiatives and patients in many places are not used to pay for health services)
· A low digital penetration or poor digital infrastructure
· A hostile environment for health entrepreneurship (Rigid regulations / Lack of patent protection / Fragmented health delivery system / Single payer system / Key stakeholders not playing the ‘open’ game / Lack of relevant human resources)
· A very short term view on health investments / A lack of budgets and incentives for innovation
· Security and privacy concerns
There is no doubt the US is leading the Health 2.0 charge. This is where most of the Health 2.0 innovation is happening and this is where most of the initiatives are getting funded. Of course the size of the US market is always attractive, but we’re seeing European companies move or open offices in San Francisco just to be closer to the action. The US gathers a lot of favorable conditions: critical need, strong entrepreneurial drive, dynamic financing system, good digital and mobile penetration … They’re even starting to open data and compensate physicians for their participation and added responsibilities.
What about Russia? They have the critical need and a system that is probably too fragmented to respond to these challenges on its own. Although mainly a centralized single payer system, it counts no less than 56000 health care operators and MEDSI, the leading private chain of clinics only represents 1.3% of the market. Their financing mechanisms could use a little oil (no pun intended), but they have resources. The demand for private health services is supported by the growth of the middle class and government investments that will increase in the years to come. The Internet penetration is expected to grow from 33% in 2009 (compared to 70% in the US) to 55% in 2015 and mobile penetration is already very high. The entrepreneurial spirit is happening in the technology sector while health care entrepreneurs are still catching up and would benefit from more exposure to the developments of the rest of the global Health 2.0 community.
Are we ready for Health 2.0 Russia CIS? There’s no doubt the conference would attract a large audience, from the region but also from around the world … especially if it is held in the summer! Stay tuned for an official announcement.
Pascal Lardier is the international director of Health 2.0