Leveraging insight: The neglected strategic capability

High quality insights are crucial for telcos

Each year telcos invest in external insights from strategic and tactical research houses, alongside primary research budgets. This investment is a response to the ever-evolving trends that are shaping the industry, the need to understand them and support decision-making. It is therefore critical that telcos develop the capability to leverage them well.

What drives the need for insight?

Learning and seeking evidence drive the insight needs across the business. This ranges from individuals drafting a one-off client proposal, to strategy teams developing the corporate response to an emerging opportunity. The breadth of the insight need has implications for research buying and funding practices, as well as how insight is distributed.

Being in the business of external insights, STL Partners is always keen to understand how telco customers use insights and what research management practices they deploy to derive more value from insight services. STL Partners asked Olga Holin, a seasoned research buyer with recent telecoms experience, to talk to a group of her peers and synthesise their perspectives on what “good” insight practice looks like.

The report examines the drivers for external insight acquisition and the types of insights typically acquired. It outlines the insight management approaches at four telcos (representative of Olga’s sample) and highlights the benefits and challenges of each. It then sets forth several guidelines for operators and other organisations to ensure insight quality and derive more value from insight acquisitions going forward.

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Why are external insights necessary?

Across all the organisations we spoke to, respondents agreed that research insights were necessary and valuable, chiefly to drive learning and aid business decision making. The stated reasons for acquiring research include:

  • To identify future growth opportunities and threats in order to plan and innovate accordingly,
  • To inform and educate employees, thereby complementing existing capabilities,
  • To validate internal assumptions and build a deeper understanding of the business and its environment,
  • To assess business performance in context and validate effectiveness.

While some of this insight could conceivably be generated internally, the value drivers of external research over an internal function are:

  • “We don’t know what we don’t know” – To gain access to topics and trends potentially not on the organisational radar. Drawing on the expertise from external sources allows organisations to capture insight more easily and assures no threats or opportunities are missed.
  • To remove blind spots in internal thinking – To challenge mental models, by providing objectivity to change the way an organisation might perceive a certain technology or topic.
  • To influence senior executives – To strengthen the credibility of business cases and market overviews. The insights of analyst houses with strong reputations make analyses more convincing to senior management. As one telco put it, “They don’t always listen to us, but they usually listen to external reputable sources.”
  • To increase the speed of internal knowledge acquisition and learning – To develop the knowledge of employees quickly (they don’t have to find the information, just contextualise it).
  • To secure quality information – To ensure information is robust, unbiased, consistent with industry definitions (external agencies validate information via multiple sources and have no vested interests to protect).
  • To supplement limited internal insight resources – To answer information einquiries more quickly and through experts versus having to recruit internal experts to understand an emerging area.
  • To get access to information that might otherwise be unattainable (e.g. competitor information).
  • To seed change – The outside and informed perspective of a research house can highlight a need for change that may not be recognised due to internal mindsets and environment.

The value to the organisation of having these insights will be influenced by the extent to which findings can inform learning or decisions in more than one part of the business – and the longevity of the findings (how quickly they go out of date) or whether they have a future focus.

External insights may only be required to address needs in a limited business area at a specific point in time, e.g. where a product team wants to know how a newly launched product is faring versus competitor offerings. This type of insight can be considered tactical insight, as it provides the information to enable quick adjustments and decision making in the shorter term, more likely the type of decisions taken by middle managers.

Strategic insights, on the other hand, can generally inform decision making across the organisation more broadly. The topics are relevant to more than one area (e.g. digital transformation) and over a longer period (they say something about the future).

Strategic insights are able to influence decision making at an executive level, equipping teams for discussions around larger investments and those concerned with long-term returns rather than immediate gains. This is illustrated below.

 Tactical versus strategic research

external insights

Source: STL Partners

The nature of the research has implications as to how it should be managed to maximise value.

Table of Contents

  • Executive Summary
    • Recommendations to maximise insight value
    • Telco insights challenge
    • Next steps
  • Introduction
  • Why are external insights necessary?
  • Insight management across the research lifecycle
    • Basic insight management process
    • Advanced insight management process
  • Telco insight management case studies
    • Telco 1
    • Telco 2
    • Telco 3
    • Telco 4
    • Set-up versus research type
  • How to increase the value of research in organisations
  • Index

Related research

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Telehealth regulations: a turning point

​Telehealth regulations: a turning point

Countries are facing a turning point in the expansion of telehealth, having been left with flexible and fragmented regulations following Covid-19. Regulations play a crucial role in either restricting or expanding access to telehealth services. Not only will this article deep dive into Germany, a pioneer in regulating telehealth, but it will also highlight the key opportunity that telehealth regulation poses for telcos.

What is telehealth?

Whilst the terms telehealth and telemedicine are often used interchangeably, STL Partners understands telehealth to be a form of digital healthcare transcending geographical boundaries by utilizing video and voice communication technology. Telehealth has the capacity to increase the accessibility and convenience of healthcare and thus it has the potential to improve health outcomes for many people.

How can telehealth be regulated?

Telehealth regulations, as well as recommendations and guidelines, vary greatly between countries and can often be unclear and complex. There are multiple strategies that are used at the national, or occasionally federal, level to regulate telehealth services.

 

Figure 1: Telehealth regulations encouraging or restricting adoption

Strategies to expand the use of telehealth can simply include legalising platforms, devices, or mobile applications to facilitate telehealth or going further to incorporate these telehealth enablers into public health frameworks. Financial incentives are also an effective way of advancing telehealth use, paying health specialists the same amount of money for virtual consultations as they would receive for their face-to-face appointments.

As well as refusing to legalise telehealth, other obstructive policies can include: necessitating initial or regular face to face consultations to access virtual services; limiting telehealth to certain services, blocking access to virtual specialist care; preventing access to electronic records or data transfer, inhibiting effective virtual consultations; and blocking prescriptions via digital services.

Unsurprisingly, the Covid-19 pandemic has accelerated the use of telehealth services to varying extents globally. In fact, McKinsey estimate that telehealth use has increased 38 times from pre-pandemic levels. This rapid expansion of telehealth has been facilitated by temporary regulations and the waiving of pre-existing legislation, resulting in a fragmented and diverse landscape of telehealth regulation.

 

Figure 2: Global examples of current telehealth regulations following COVID-19

Source: STL Partners with insights from DLA piper report

Thus, it is clear that Covid-19 has brought about regulatory changes to telehealth in varying forms across the world. Some countries, such as South Korea and Japan appear to remain hostile to permanently easing legislative barriers to accessing telehealth. In contrast, positive changes such as introducing seemingly permanent telehealth incentives, as done in France and the USA, indicate that some countries are looking to expand their use of telehealth.

Now is a crucial turning point for telehealth regulations in many countries, as flexible and temporary forms of legislation in place due to Covid-19 will need to be evaluated. Using Germany, a forerunner in telehealth regulations, as an example, it is helpful to envisage the future of telehealth regulations and legislative changes to ensure a positive, accessible, and secure expansion of telehealth.

Deep Dive: Germany

Unlike many countries which are looking to potentially alter their telehealth regulations due to the experience of Covid-19, Germany had an established regulatory framework for telehealth prior to the pandemic. The progressive German Digital Healthcare Act of 2019 unlocked widespread possibilities for telehealth use. The act made Germany the first country in the world to allow prescriptions, reimbursements, and medical advice through digital apps with eleven currently approved in the country, aiding various issues including depression, sleep disorders and headaches.

Covid-19 has further accelerated telehealth use in Germany: remote treatment has been legalised; it is now mandated that patient records must be available electronically; and, from 2022, e- prescriptions legally must be offered as an option to patients. Furthermore, since the pandemic, medical apps can be given a ‘fast track’ route into the market so that they are available for healthcare professionals to use within 3 months.

These regulations, which actively encourage the use of telehealth services, mean that the mobile medical app market in Germany will continue to grow, by an estimated 23.6% by 2026. The new legislation requires apps be approved by a regulatory body, also allowing telehealth to be effectively integrated into the public health system.

Whilst the German example isn’t the only pathway countries can choose to follow as they look to regulate telehealth services, it serves as a good example of how telehealth can become a trustworthy, convenient, and accessible part of a country’s health system.

What do changing telehealth regulations mean for telcos?

Covid-19 has accelerated the adoption of digital healthcare by at least four years (see this STL report for further details) and the rapid changes in telehealth regulations globally suggest that an exponential increase in telehealth use is imminent. This inflexion point, coupled with operators’ potential advantage to play in this space (trusted and heavily regulated brand, local player, skills in data management and security etc.) makes telehealth an exciting opportunity for telcos looking to go beyond connectivity and instead work across the value chain.

Thus, telcos, particularly those operating in countries looking to expand telehealth use through regulatory changes, should capitalise on this opportunity by building experience and credibility in the industry.

Many telcos have already recognised this potential opportunity in telehealth. Prior to Covid-19 we highlighted TELUS as an innovator in digital health as well as ten other telcos that were exploring the industry. Furthermore, undoubtedly sparked by the pandemic, increasing numbers of telcos are entering the telehealth industry such as HKT launching a new consultative app ‘Dr Go’ and Verizon acquiring BlueJeans to expand its telehealth services, both in 2020.

Author:Izzy Montgomery, Consultant at STL Partners, specialising in digital health.

Digital health insights pack

This 24-page document will provide you with a summary of insights from our healthcare research and consulting work:

  • Key trends in the healthcare industry
  • The role for telecoms: applications and business models
  • Strategies for success: where to start
  • How STL Partners can support you

Request the free digital health insights pack by clicking on button below:

Get in touch with our Digital Health Leads

Amy Cameron

Senior Analyst & Digital Health Research Lead

Darius Singh

Senior Consultant & Digital Health Practice Lead

10 telco healthcare services

10 telco healthcare services

In our research into the healthcare opportunity for telcos, we’ve outlined the three layers of the value chain they can participate in: connectivity, enabling platforms and services, and applications and solutions.

Here we give some industry examples of how what telcos are doing in each of those layers of the value chain. As illustrated below, in the applications and solutions layer, there are also a range of different business models telcos are adopting. On the B2B side, in yellow, operators can develop or acquire health IT capabilities which they provide to healthcare organisations, or they can act as a channel partner / reseller for other B2B health applications. On the B2C side, telcos can likewise partner with third-party providers and market services to their existing customer bases, usually with some kind of discount attached, or they can develop and launch their own services.

10 examples of telco-led healthcare services

10 telco healthcare services

Source: STL Partners analysis

Of the examples highlighted here, Turkcell and Jio are two particularly interesting cases. Both of them have for the most part developed capabilities internally, although Jio has also started to partner with a growing range of medical services companies to expand its reach.

Turkcell’s hospital IT system

Turkcell has developed sophisticated health IT capabilities across a number of city hospitals as part of public private partnership (PPP). It began developing these capabilities in 2017 with Yozgat and Adana City Hospitals, and has since continued with three more hospitals in 2018 and 2019. By 2019, it had digitally processed more than 10 million patient records.

Key features available so far include:

  • Patient medical record management
  • Patient check-in, appointment and lab result collection kiosks
  • Patient information screens
  • In-hospital patient, staff and asset tracking
  • Hospital CCTV and security
  • Central help desk
  • Service operation centre
  • Analytics on hospital visitor numbers, locations, with customised dashboards for administrators

Turkcell’s ambition is to expand this initial solution into a broad ranging digital health campus solution for hospitals. (See the full presentation to the ITU here.)

Turkcell’s digital hospital campus ambition

Turkcell digital hospital solution

Source: Turkcell

Jio Health Hub

Since 2017, Jio has been developing a health and fitness app, with the aim of providing consumers with a holistic health management solution. Key features included in the app so far are:

  • Booking lab tests and check-ups, including discounts for some services and access to virtual consultations
  • Weight management, diet and nutrition consultation
  • Access to health information
  • Manage and share personal medical records with doctors, family and friends
  • Access a directory of doctors, dieticians, physiotherapists, attendants, counsellors
  • Locate nearby pharmacy and blood banks

The Jio Health Hub was first launched in 2017. Over the following years, Jio partnered with partnered several healthcare providers to expand its services, including iCliniq which brought access to doctors across 60 specialties. However, Jio Health Hub has only really begun to scale since the beginning of the COVID pandemic when the need for digital health services became immediate. So far the app has achieved 1 million downloads, and in June 2021 it began allowing users to book COVID vaccination appointments and download CoWIN Certificates (India’s version of a COVID vaccination passport).

Other telcos’ digital health services

For more detail on the other solutions noted here, follow the links below.

  • Verizon‘s BlueJeans
  • STC‘s connectivity and application enablement solutions
  • Orange-owned Enovacom‘s interoperability solutions
  • Vivo Brazil‘s partnership with Teladoc
  • Telefónica‘s partnership with Tunstall in Spain

 

 

Digital health insights pack

This 24-page document will provide you with a summary of insights from our healthcare research and consulting work:

  • Key trends in the healthcare industry
  • The role for telecoms: applications and business models
  • Strategies for success: where to start
  • How STL Partners can support you

Request the free digital health insights pack by clicking on button below:

Read more about digital health

Webinar

Telcos in health webinar

In this session Amy Cameron and Yesmean Luk looked at the opportunities for telcos in health. As a growing industry, with a national focus and significant digitisation challenges, healthcare is an attractive vertical for telcos seeking to build new revenues beyond core communications services.

Read more

Research

5G’s healthcare impact

This report explores the impact of 5G on the healthcare industry. It illustrates the benefits and example use cases, as well as quantifying the potential efficiency gains, that 5G will enable.

Read more

Research

TELUS Health: Innovation leader case study

Healthcare is an attractive vertical for telcos to address with digital solutions. Although many telcos have made attempts to capture this opportunity, TELUS stands out as an example of the value of a long-term commitment to healthcare. In this case study, we examine TELUS’ strategy in health, evidence of its success, and draw out lessons for other telcos

Read more

Five top strategic questions for telcos exploring a healthcare play

Five top strategic questions for telcos exploring a healthcare play

Through our healthcare practice, we’ve spoken to many telecoms operators about the potential opportunity for them in the healthcare market. We’ve found that there are a few key strategic questions come up most frequently. The answers depend a lot on what kind of telco you are, and what kind of telecoms and healthcare market structures you operate in, among other factors. But there are also some takeaways that apply broadly, which we’ve outlined here.

Five key strategic questions for telcos exploring the healthcare vertical

5 strategic questions for telcos exploring health

1. Why is healthcare an attractive vertical for telcos?

  • It has national or sub-national economies of scale, where every country or even every state/province/region has different funding structures, investment priorities and levels of maturity. While the underlying technology can cross borders, implementation is highly localised as any new solution must fit into existing systems and workflows. Telcos are therefore much better placed than global technology companies to understand and address local healthcare needs and priorities.
  • As a very large sector accounting for between 5-10% of most countries’ GDP, capturing even a small share of the opportunity could make an impact on telcos’ top line
  • It places a premium on security – both in terms of data privacy and cybersecurity – which telcos, as locally regulated companies and often with strong brand reputations on trust, are well placed to address
  • It is relevant to everyone, so investment into improving healthcare outcomes has the potential to create a strong sense of pride and purpose for a telco’s employees and benefit its relationships with government and society.

Despite the arguments for prioritising healthcare, it may not be the right opportunity for all operators. We identify four key areas of consideration for telcos making decisions about vertical prioritisation:

4 main considerations for telcos investing in health

2. Why is now a good time to enter the healthcare market?

  • COVID has given a $300bn boost to digital health globally across four key application areas. Not only has it forced a change in regulations and acceptance among healthcare workers and patients due to social distancing rules, but it will also be a crucial in enabling healthcare systems to cope with backlogs of patients who deferred treatment throughout the pandemic
  • Meanwhile, the level of digitisation in healthcare is low compared with other industries, so there are still many big problems to solve (and therefore valuable business to develop) for healthcare providers and patients
  • 5G will have a significant impact on enabling a wider range of digital health solutions to work well at scale, so building expertise in healthcare applications could provide a road to monetisation (beyond connectivity) for telcos’ 5G investments

3. Where should telcos play in the value chain?

  • Beyond network as a service, which we believe will be table stakes for any telco addressing advanced enterprise and consumer use cases, telcos could offer application enablement platforms and/or digital health applications themselves
  • Over the long term there is significant opportunity for integration across the healthcare system with secure messaging and data sharing between providers and between providers and patients. This will become more significant as the range and scale digital health applications expands over the coming years.
  • However, to play an integration role, telcos must first gain the trust of healthcare providers and patients, and the digital health software and application players working with them. This may be difficult for telcos to achieve without first-hand experience in developing and launching digital health applications (often through acquisitions or partnerships).

4. What kind of roles are telcos playing in the application enablement / data management layer of the value chain?

As illustrated below, most telcos playing a significant role in the healthcare vertical are playing across all three layers (and occasionally even employing doctors and clinicians).

Telcos presence in the healthcare value chain

  • TELUS: Insurance claims processing through its initial acquisition of Emergis (2008), and the development of a health data exchange platform that powers its EMRs and national e-prescription service, and which is provides to telecoms operators entering their national healthcare market other countries
  • Swisscom: National healthcare data hub that harmonises data between patient records (nationally mandated), healthcare agencies, and physicians’ practices (enabled by Curabill and PortX acquisitions in 2012)
  • Orange: Acquisition of Enovacom (2018) which provides software that helps to secure and manage communications between hospitals and their patients
    • 5K healthcare providers in France, Canada, Switzerland, Belgium, UK
  • KPN: Acquisition of e-Zorg (2016) which manages the vast majority of data transfer between healthcare organisations and ISVs in the Netherlands
  • Telstra: Combination of capabilities across its health IT portfolio in pharmacy, hospitals and care homes to create new specific solutions that link between healthcare players, e.g.:
    • Real-time prescription tracking database
    • National cancer screening contracts

See details of these operators’ strategies in our report on Telcos in health: How to crack the healthcare opportunity

5. Is there a B2C play for telcos in the healthcare sector?

  • This is an extremely tough market because it operates at global economies of scale – Google/Fitbit, Apply, Samsung, Ping An Good Doctor, etc.) can tap into huge existing customer bases, and consumer health accounts for a tiny proportion of their R&D budgets so they can afford to try many more things than a telco could
  • However, there may be pockets of the market where telcos could leverage their physical reach and customer bases to carve out a niche. Assisted living is the standout opportunity, although the experiences of leading telcos in health suggests that building credibility in providing healthcare devices and applications to consumers is not a quick win. Telcos should see this as a B2B (for care institutions) as well as a B2C opportunity.
  • For telcos with reach into their national healthcare market, a mid- to long-term differentiator could be the ability to help integrate the global players’ personal health records into local healthcare providers’ EMR systems.

 

Digital health insights pack

This 24-page document will provide you with a summary of insights from our healthcare research and consulting work:

  • Key trends in the healthcare industry
  • The role for telecoms: applications and business models
  • Strategies for success: where to start
  • How STL Partners can support you

Request the free digital health insights pack by clicking on button below:

Read more about digital health

Webinar

Telcos in health webinar

In this session Amy Cameron and Yesmean Luk looked at the opportunities for telcos in health. As a growing industry, with a national focus and significant digitisation challenges, healthcare is an attractive vertical for telcos seeking to build new revenues beyond core communications services.

Read more

Research

5G’s healthcare impact

This report explores the impact of 5G on the healthcare industry. It illustrates the benefits and example use cases, as well as quantifying the potential efficiency gains, that 5G will enable.

Read more

Research

TELUS Health: Innovation leader case study

Healthcare is an attractive vertical for telcos to address with digital solutions. Although many telcos have made attempts to capture this opportunity, TELUS stands out as an example of the value of a long-term commitment to healthcare. In this case study, we examine TELUS’ strategy in health, evidence of its success, and draw out lessons for other telcos

Read more

TELUS Health: Communicating an innovative healthcare vision

Case study overview

The healthcare industry is proving to be one of the most interesting avenues for operators to explore as a way to drive new growth for their businessesHowever, the journey towards success in the industry is not easy and operators must define a clear strategy now to gain future credibility. 

STL Partners’ Digital Health practice area is tailor-made for operators that are looking for a trusted advisor to help them navigate this unchartered territory. See how we have supported our long-time partnerTELUS Health, on its journey to harness the digital health opportunity.  

STL Partners and TELUS Health have a longstanding relationship. Over the years, STL partners has helped TELUS Health to:  

  • Organise and facilitate an event at MWC to engage with potential operator partners while promoting TELUS Health’s Platform and the digital health opportunity for telcos; 
  • Develop a comprehensive whitepaper on TELUS Health’s strategy; 
  • Synthesise key learnings from the TELUS Carrier Health Summit and promote TELUS Health as a thought leader in the digital health space 

Digital health insights pack

Find out how we can help you:

  • Develop insights-led marketing
  • Position your company as a thought-leader
  • Engage with telco decision-makers

STL’s insight, interest, and work on Telco 2.0 provided an invaluable perspective on TELUS’s activity over the last ten years in the health vertical and helps TELUS to work with other telcos internationally in health

TELUS Health

VP

Project deliverables

Organised and facilitated an event at MWC

STL Partners and TELUS Health engaged in a consulting project in 2018. As part of the project, we designed, facilitated, and recruited for an event at MWC that promoted the digital health opportunity for telecoms players as well as TELUS Health’s platform and its journey to success.  

During the event, STL Partners team and TELUS CTO delivered presentations and opened conversations with potential operator partners. Overall, STL Partners recruited 25 participants from various telecom operators who were interested in learning more about the ways operators can engage in the digital health sector.  

Example deliverables

Developed a comprehensive whitepaper

STL Partners wrote an independent case study on TELUS Health’s strategy to:

  • Educate internal stakeholders within the wider organisation on the company’s health strategy
  • Help TELUS communicate its healthcare vision with the telco community as it embarked on its international growth strategy

To produce the report, STL Partners conducted an in-depth interview programme with C-suite executives from both TELUS and TELUS Health. The findings of the report were shared during the TELUS Carrier Health Summit which STL Partners facilitated.

Promoted TELUS Health as a thought leader

In 2019, STL Partners participated at TELUS Carrier Health Summit in Toronto, Canada. As a result, we published a report on the key lessons from the event that might be useful to internal and external stakeholders.

In 2020, STL Partners organised a telco health strategies webinar that featured presentations from TELUS Health and Babylon Health. The event gathered various players from the telecom space and helped promote TELUS Health’s thought leadership among members of the wider community.

Cloud players in health: how can telcos compete?

Cloud players in health: how can telcos compete?

 

In this article we explore what the cloud players are doing in health, and identify where telecoms operators can look to compete or collaborate in the digital health market.

The digital health opportunity has never been better

The healthcare industry presents a vast opportunity, comprising roughly 10% of the world’s GDP. Although it’s an industry that has traditionally lagged behind others in terms of digitalisation, it is now undergoing a transformation. This is being accelerated by the COVID pandemic, which has highlighted the importance of technology in society, particularly in healthcare. Finally, some big regulatory and cultural barriers to digital health adoption have fallen and the healthcare sector is ready to change.

The healthcare opportunity has not gone unnoticed by the cloud players and internet giants. Over the past decade, Facebook, Amazon, Microsoft, Apple and Google (FAMGA) have gradually been building up their healthcare portfolios through partnerships, acquisitions, investments and internal development. With their huge in-built customer base and vast budget and resources, they are well positioned to succeed in the digital health space.

However, this leads to the question – do FAMGA post a competitive threat to telcos building digital health businesses in their local markets? How can operators hope to achieve success, when they are up against players that have a significantly greater reach and abundance of resources?

In this article we explore what the cloud players and technology giants are doing today in healthcare, then assess the strategic implications for telecoms operators considering or actively developing digital health businesses.

What are FAMGA doing today in healthcare?

Facebook

Facebook has a wealth of diverse users who use its apps regularly and share a great deal of personal information on them. Accordingly, its healthcare offerings look to leverage these unique data sets to detect potential health threats for individuals and encourage them to adopt a healthy lifestyle. Their health play includes:

  • A preventive health tool integrated into the Facebook mobile app, that considers a user’s age and gender and reminds them to get check-ups when required. It also connects them to relevant local medical service providers.
  • A suicide prevention tool, where AI analyses users’ activity on Facebook and detects when they express suicidal tendencies. It then prioritises the severity of the case, and trained staff determine what help to offer the user.

Amazon

For many people Amazon is the first port of call for an online purchase, and AWS is currently the leading provider of cloud computing services. Amazon is looking to leverage this loyal user base, as well as its extensive distribution network to address healthcare pain points in the US. While this includes leveraging its cloud computing and AI capabilities in health, Amazon is equally focused on cutting the fat in the US’ care and prescription drug delivery systems.

  • Amazon joined the online pharmacy business in 2018 with a $753 million acquisition of PillPack, an online pharmacy with licenses to distribute in almost every state. Two years later customers can still order their prescriptions directly through PillPack, but it is now also possible to buy prescription medicine on Amazon’s main website, with free two-day delivery for Prime members. Amazon is integrated with most health insurance plans in the US.
  • Haven was a joint venture launched in 2018 between Amazon, JPMorgan Chase, and Berkshire Hathaway that aimed to provide low-cost and accessible healthcare solutions for the three companies’ employees. Its ambition to disrupt the healthcare market was ultimately not realised, and It will shut down at the end of February 2021, though the three companies aim to continue collaborating informally.
  • In late 2019 Amazon acquired Health Navigator, which uses analytics and AI to improve patient diagnosis and care. It offers clinical content in the form of APIs, and Amazon plans to integrate it into its Amazon Care offering.
  • Amazon Care launched for Amazon employees in September 2020. It is a virtual and in-person offering, that includes telemedicine via app/chat/video, prescription medication delivery and follow-up visits by a nurse to the employee’s office or home.
  • Amazon has designed software for the voice assistant Alexa that enables it to handle and communicate confidential patient information. It is HIPAA compliant and it has partnered with three hospitals as part of the program.
  • Amazon’s work in the AI space includes a speech recognition service called ‘Amazon Transcribe Medical’ that takes physician’s speech and inputs it directly into medical records in text form. They also have a partnership with University of Texas Health Science Centre, Cardinal Health and Virtusa to use AI in medical research, and a Next Gen Stats partnership with the NFL that is investigating AI/ML to improve player health.

Microsoft

Microsoft is a highly trusted technology and cloud computing company that owns the world’s most popular workplace apps, and popularity has continued to grow over the last year with daily users of its Teams platform jumping from 20 million in November 2019 to 115 million in October 2020 as a result of COVID-19. Its healthcare initiatives are primarily focused on supporting the healthcare sector’s transition to cloud computing/cloud based infrastructure and adoption of machine learning and AI. They include:

  • AI for health, which is a five-year, $60 million philanthropic program to help healthcare organisations fight global health challenges and use AI/ML to boost patient health.
  • Microsoft Cloud for Healthcare is their first industry-specific cloud offering. It brings together cloud computing capabilities (including Azure, Dynamics 365 and Microsoft 365) to ‘enhance patient engagement, empower health team collaboration, and improve clinical and operational data insights’.
  • Microsoft has also partnered with various companies including:
    • Providence – AI to improve electronic health records (EHRs). They are also building a high-tech hospital together.
    • AstraZeneca – AI Factory for health (a healthcare AI accelerator)
    • Novartis – AI innovation lab to accelerate development of new medicines
    • Nuance – building modern healthcare solutions, including speech recognition for clinical use, where AI software listens to physician/patient conversations and converts them to reports
    • Rutgers medical school – app to prevent sudden infant death syndrome

Google

Google has a wealth of experience in handling and searching large data sets and stands out from the other hyperscale cloud providers for its strong analytics and AI capabilities, which it is building on in digital health. It has made many moves in healthcare and has 57 digital health startups in its portfolio (as of January 2020).

  • Google Health is a branch of Google that was started in 2006. It carries out research, develops clinical tools and partners with healthcare organisations to develop solutions. Its work includes using AI/ML to analyse patient data (e.g. detecting heart disease risk, diabetic retinopathy, cancer), which has resulted in a reduction in false positives and negatives compared to doctors.
  • Google partnered with Ascension (a major private healthcare system in the US) in 2019 to move its EHRs to the cloud and create a search tool to improve search capabilities for doctors.
  • Google acquired DeepMind, an artificial intelligence company and research laboratory, in 2014. The DeepMind health team joined Google Health in 2019 to work on developing tools and technology to improve patient care and clinical workflows.
  • EHR voice assistant Suki helps clinicians complete administrative tasks. Google is also working on a voice recognition solution that will listen to physicians and not only transcribe the patient interaction, but also interpret it and produce notes on the most important and relevant parts of the conversation.
  • Google acquired Fitbit in January 2021 for an estimated $2.1Bn, revealing ambitions in the wearables market.

Apple

Apple is one of the most trusted technology companies and enjoys a highly brand loyal userbase. Its work in digital health focusses on enabling both consumers and enterprise users to manage data easily across systems.

  • The Apple Health app is a dashboard that shows users their health metrics, compiled from compatible apps/devices.
  • HealthKit platform is a developer framework that enables sharing of health data between compatible apps and services.
  • is a software framework for apps to let people better understand and manage their medical conditions by tracking their day to day health and medications. This data can then be shared with care teams. Johns Hopkins Medicine, Stanford Medicine, and Emory Healthcare are amongst those using CareKit apps.
  • ResearchKit is a software framework for apps to help researchers gather data by making it easier to enrol participants for studies (e.g. by recruiting through CareKit or HealthKit users) and gather regular data.
  • The Apple smart watches have increasingly advanced healthcare capabilities including:
    • Sensors capable of measuring a user’s blood oxygen levels. Users will be able to enter a study on asthma and heart failure, and the role of blood oxygen and heart rate metrics in detecting respiratory illnesses.
    • Heart rate sensors to detect unusually low or high heart rates, and an ECG tool that can identify arterial fibrillation
    • Sensors that can detect when someone’s taken a hard fall and likely injured themselves
    • Sleep tracking
    • Medical ID, so first responders in medical emergencies can access critical patient information such as allergies or emergency contacts

Where can telecoms operators compete?

Cloud players in healthcare

Areas where it’s not worth competing

  • Amazon, Microsoft and Google are the leading players in the cloud computing market, and previous attempts by telcos to compete in core cloud have not proven successful. Instead, telcos could look to deliver edge cloud services to healthcare providers to alleviate the data privacy and sovereignty concerns of the industry.
  • Personal health records are another area where attempting to compete may be difficult, as Apple already have a significant hold of the personal health market. Even the cloud companies have struggled in this digital health area, with Microsoft and Google’s offerings (HealthVault and Google Health) having both failed – although Google’s acquisition of FitBit shows renewed ambitions.

Areas where telcos could compete

  • When it comes to remote care delivery, FAMGA have good ties to organisations in the US but may lack local partners in other countries, therefore telcos with regional relationships and expertise can have an advantage in telehealth and remote care services.
  • Public distrust of large technology companies and their use of consumer data is growing (particularly for Facebook and Google), while telcos are generally quite well trusted. Telcos could therefore leverage this brand to have more success in working with EMR/EHRs and supporting healthcare providers in their transformation of legacy systems. They will also be better placed to deal with regional-specific forms of patient data and hospital information systems (HIS), whereas the cloud players (who have a more global offering) will likely not have the regional knowledge or bespoke offerings by geography.

Areas where telcos could collaborate

  • In some of these areas, telcos could collaborate to implement FAMGA’s tech at a national level. Areas where this could be successful include SaaS, AI, personal health records, HER/EMRs, telehealth and potentially on-premise edge computing.
  • EMR/EHRs are an attractive area for this because while the cloud and internet players can produce solutions to optimise sharing of patient information across the US, this won’t directly translate to other countries which will have different needs. Telcos will be able to leverage their national or regional relationships and know-how.
  • Telehealth is also a good area to collaborate in, as telcos can provide the relationships with consumers, healthcare providers and solutions providers in countries where FAMGA do not already have them.

Telcos could leverage the strong AI capabilities of cloud players like Google to deliver AI-based analytics, diagnostics, and triage services to healthcare providers – an opportunity area which STL Partners forecasts will grow significantly over the next few years.

Author: Miran Gilmore, Consultant and member of the Digital Health Practice

Digital health insights pack

This 24-page document will provide you with a summary of insights from our healthcare research and consulting work:

  • Key trends in the healthcare industry
  • The role for telecoms: applications and business models
  • Strategies for success: where to start
  • How STL Partners can support you

Request the free digital health insights pack by clicking on button below:

Get in touch with our Digital Health Leads

Amy Cameron

Senior Analyst & Digital Health Research Lead

Darius Singh

Senior Consultant & Digital Health Practice Lead

Read more about digital health

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TELUS Health: Innovation leader case study

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Telehealth in emerging markets: Babyl closes the gap in Rwandan healthcare inequality

Telehealth in emerging markets: Babyl closes the gap in Rwandan healthcare inequality

This article has been written in collaboration with the GSMA Mobile for Development (M4D) Central Insights Unit, an initiative supported by the UK Foreign, Commonwealth & Development Office (FCDO), the GSMA and its members. Country level data on the Rwandan market, as well as information on the Rwandan healthcare system and population dynamics, has been provided by the GSMA through their market case studies and analysis. More information here.

COVID-19 has accelerated demand for telehealth solutions globally. Applications such as phone or video consultations and remote patient monitoring enable basic healthcare services to continue without the risk of virus transmission. In some markets, this has swayed policy changes e.g. in South Korea where there has been a temporary easing of telehealth restrictions amid the pandemic.

What does this mean for MNOs?

Changing needs and attitudes present mobile network operators (MNOs) with an opportunity to play a more prominent role in digital health. During the pandemic, MNOs have broadly supported government contact-tracing efforts, but some are taking advantage of the changing climate to refine and expand their telehealth propositions. You can read more about global MNO responses to COVID-19, and their changing strategies, here.

But MNOs must consider factors such as economic development, population size and spread, and even political agendas that play a significant role in shaping regional telehealth solutions and the nuanced requirements that they will need to address.

What are the big challenges for emerging markets, and how can telehealth help?

The ideal for all markets is a healthcare system that is:
1. High-quality
2. Cost-effective
3. Accessible to all

Developing markets face particular challenges with cost and accessibility, and often have large proportions of the population lacking access to physical and even digital infrastructure that is crucial for basic healthcare.

A number of telehealth providers are looking to overcome these barriers and provide solutions that could improve overall healthcare quality amongst typically underserved communities, for example in Thailand, Indonesia and Mexico.

Case study: Babylon in Rwanda

One particularly interesting example is the partnership between digital health service provider Babylon Health (“Babyl” in Rwanda) and the government of Rwanda, to offer telehealth consultations to their urban and rural populations, solving fundamental challenges around inequality to healthcare provisioning.

This is part of a broader effort to make the country a global leader in digital health and overcome basic barriers to healthcare access. The Rwandan government leveraged digital health solutions in response to COVID-19, with contact tracing, symptom surveillance, robot-monitoring and data visualisation. The market is becoming increasingly open to innovation and has been hugely receptive to Babyl’s solution.

Why is Rwanda a receptive market for telehealth?

There are some core challenges facing basic healthcare in Rwanda:

• Doctor patient ratio: Rwanda have around 1.3 doctors to every 10,000 people, compared to a global average of 15.1 (World Health Statistics 2019), putting a big strain on human resources
• Population distribution: though their population (12.3 million) is densely packed, 64% live in rural areas, without access to physical healthcare infrastructure or a stable internet connection – the latter is a particular challenge for telehealth solutions

Overview of the Rwandan healthcare system

But there are also big efforts to overcome these challenges, and healthcare is a priority for the government:

• Health insurance: Rwanda has a healthcare insurance system ensuring reasonable healthcare services that covers 90% of the population
• Smart Rwanda: the government has outlined an initiative to create a “Smart Rwanda”, driving support from investors and development partners – however, digital health is generally lagging behind in this space, and many efforts have been not-for-profit (e.g. Babyl)
• NGO funding and support: there are a number of NGOs working with the Rwandan government to support its Health Management Information System, including WHO, UNCEF and the Bill and Melinda Gates Foundation

How are Babylon addressing Rwanda’s challenges?

A big challenge for even telehealth solutions in Rwanda is the lack of access to digital infrastructure. In addition, GNI per capita is relatively low at $1,959, compared to a global average of $15,745 (World Bank, 2018) – much of the population live below the poverty line, therefore digital solutions have to be affordable, and realistic.

However, feature phones are seeing increased use, and digital literacy is improving. Key to Babyl’s success is the fact that patients can access its telehealth services via text or voice – they do not require multimedia or internet plans, making it accessible to farther reaches of the population.

Since its launch in 2016, over 1.2 million consultations have happened via Babyl in Rwanda, with over 30% of the adult population (>2million users) being registered. Patients can have consultations with a doctor or nurse, as well as prescriptions, lab requests and referrals from their mobile phone within minutes. This boosts efficiency and frees up strain on healthcare providers.

However, there are still opportunities for Rwanda to refine and expand its digital health proposition, namely through encouraging digital health start-ups to work more closely with MNOs to scale solutions and continuing to prioritise applications/services that will help overcome workforce shortages.

The future of telehealth in emerging markets

The Babyl Health example illustrates the applicability of telehealth solutions to overcoming some of the core challenges that face emerging markets.
However, more developed markets are also benefiting from investing in telehealth, and also face challenges with meeting the 3 core goals for healthcare outlined above. With COVID-19 putting additional strain on the sector, many are turning to telehealth.

Babylon alone has partnered to offer a number of solutions, for example offering virtual GP consultations and easing the strain on A&E departments for the UK’s national health service (NHS), as well as offering a range of virtual services with TELUS Health across regional markets. You can hear more about TELUS and Babylon’s partnership, including potential partnership models, here.

Telehealth is a space to watch, addressing key challenges in developed and developing markets, and making big promises for one of the most resource-strained industries. COVID-19 has only accelerated demand and presented MNOs with an ideal platform to bolster their digital health play.

Digital health insights pack

This 24-page document will provide you with a summary of insights from our healthcare research and consulting work:

  • Key trends in the healthcare industry
  • The role for telecoms: applications and business models
  • Strategies for success: where to start
  • How STL Partners can support you

Request the free digital health insights pack by clicking on button below:

Read more about digital health

Webinar

Telcos in health webinar

In this session Amy Cameron and Yesmean Luk looked at the opportunities for telcos in health. As a growing industry, with a national focus and significant digitisation challenges, healthcare is an attractive vertical for telcos seeking to build new revenues beyond core communications services.

Read more

Research

5G’s healthcare impact

This report explores the impact of 5G on the healthcare industry. It illustrates the benefits and example use cases, as well as quantifying the potential efficiency gains, that 5G will enable.

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TELUS Health: Innovation leader case study

Healthcare is an attractive vertical for telcos to address with digital solutions. Although many telcos have made attempts to capture this opportunity, TELUS stands out as an example of the value of a long-term commitment to healthcare. In this case study, we examine TELUS’ strategy in health, evidence of its success, and draw out lessons for other telcos

Read more

Identifying opportunities for growth in digital health

Case study overview

STL Partners helps our clients to identify, define and prioritise strategic opportunities to grow their revenues. We work collaboratively with key stakeholders to formulate new growth ideas and evaluate them based on our clients’ core objectives and capabilities. This approach brought together key decision makers within the organisation and created alignment.​t.

See how we supported a Tier 1 operator to:

  • Assess key trends in the healthcare market and in digital health;
  • Evaluate key lessons from other operators’ healthcare strategies;
  • Identify and prioritise strategic initiatives and develop a roadmap for growth.

Consulting services overview

Get in touch to find out how we can help you:

  • Analyse market trends and dynamics
  • Conduct market sizing and forecasting
  • Prioritise initiatives for new growth

STL Partners’ deep insight and knowledge of the market support used in shaping our healthcare strategy, and their approach drove collaboration across our team. Overall, STL over-delivered.

Manager, Strategy & Participations 
Tier-1 operator

Assessing key trends in digital health

STL Partners researched the wider trends in society and in the healthcare market, particularly focusing on the role of technology and the increased adoption of digital health solutions. Our analysis explored:

  • How the delivery of healthcare services is changing and the key factors driving that change;
  • Key technology trends that are transforming the healthcare market;
  • Different types of players in the global digital health ecosystem and the roles they play.
Example deliverables
Example deliverables

Evaluating key lessons from other operators

​STL Partners produced nine different operator healthcare case studies using both primary and secondary research.

This included an in-depth analysis of two operators who have both made significant long-term commitments: TELUS Health and Telstra Health. Each case study evaluated the strategy, key challenges they faced, implementation approach, and level of success they achieved.

Our client leveraged these lessons when developing their own healthcare strategy.

Identifying and prioritising strategic initiatives

STL Partners led a three-day highly strategy formulation and alignment workshop at the client’s offices with key stakeholders within the organisation. This included:

  • Presenting an overview of the key current trends in digital health and key learnings from other operators’ experiences;
  • Conducting a SWOT analysis to identify the client’s strengths and weaknesses as context for evaluating strategic approaches;
  • Identifying and defining a wide range of potential initiatives;
  • Prioritising initiatives based on market attractiveness and the client’s ability to implement solutions;
  • Defining a roadmap, success metrics and next steps based on the agreed prioritised initiatives.
Example deliverables

What is digital health? 5 Application areas telcos should focus on

What is digital health? 5 Application areas telcos should focus on

What is digital health and where is the opportunity for telcos?

Healthcare is a huge industry and the adoption of new technologies such as IoT and AI will transform every part of it, from how new prescription drugs are researched and tested to enabling patients to manage their own health more effectively. Within this vast market, to help define the digital health opportunity, we have identified the five key areas in digital health telcos can make the biggest impact – through support with more flexible and powerful connectivity services, or further up the value chain:

  1. Personal health management and wellness
  2. Diagnostics and triage
  3. Virtual care and telehealth
  4. Remote monitoring
  5. Data and analytics

In this article we detail the 5 application areas, highlighting real examples of digital health use cases and the potential role of the telco. We cover more on the opportunity for telcos in digital health, and how to address that opportunity, in our recent articles “The digital health opportunity for telcos” and “Four strategies for telcos in healthcare”.

While many digital health application providers start by playing in one of these five segments, as the digital health market matures we are beginning to see more integration across the five areas as companies seek to address the full patient journey. For example, in August 2020 US-based virtual consultations provider Teladoc announced plans to acquire chronic care management provider Livongo.

 

5 main application areas in digital health

Figure 1: Five digital health application areas for telcos

Personal health management & wellness

  • Fitness trackers, e.g. Fitbit, Apple Watch
  • Assisted living sensors, e.g. wearables for elderly to track location, detect falls and raise alarms
  • Personal health records, e.g. Apple health kit
  • Prescription management apps, e.g. prescription reminders & tracking to improve adherence
  • Maternity & family apps, e.g. tracking baby growth, immunisations, medications, etc.
  • Health management apps, e.g. smoking cessation, weight management, etc.

These solutions are not linked into formal healthcare delivery and primarily work on a B2C business model approach. While some doctors might recommend use of fitness trackers or health management apps to their patients in order to encourage healthier lifestyles, today the data from these services is very rarely pulled into healthcare providers’ EMR/EHR systems.

The consumer focus of these solutions means that telcos will likely find it challenging to compete with the agility and investment capabilities of global consumer brands such as Fitbit and Apple that are leading in this segment.

However, assisted living is one particular area where we believe telcos could play a stronger role, either as a channel for digital health companies seeking to reach new customers, or supporting digital health companies with enablement tools, such as high quality location tracking, in-built or fallback connectivity. See our report Coordination the care of the elderly for more detail on applications and telco business models.

Diagnostics and triage

The aim of these applications is to improve access and availability of medical information, in order to direct patients to the best healthcare resource in the first instance, in turn reducing the burden particularly on primary care providers.

  • Phone / website information tools, e.g. NHS 111 in the UK
  • AI-enabled diagnostic software, e.g. Babylon Health symptom checker, apps to assess skin abberations/dermatological issues
  • At home testing kits, e.g. for COVID or sexually transmitted infections
  • Referrals to specialists

This area is unlikely to be a strategic priority for telcos pursuing digital health opportunities, as these applications do not require particularly robust connectivity or other enablement tools telcos are well positioned to provide, and on their own are unlikely to deliver much value.

However, telcos aiming to build a presence in the digital health market should plan how to incorporate diagnostics and triage into their broader application mix, since they form a crucial step in the patient journey – and potentially will act as the link between consumer focused wellness solutions and formal healthcare services.

Virtual care & telehealth

The goal of these applications is to overcome time and geography barriers in delivering healthcare services, mainly for primary care. An area of growing interest within this field is the use of telehealth technologies to support education among healthcare professionals.

  • Phone / video consultations
  • Asynchronous care, i.e. sending in symptoms and receiving feedback or treatment at a later time
  • Online appointment bookings
  • Online / digital prescription services
  • Use of augmented reality and/or virtual reality (AR/VR) for educational and/or treatment purposes, e.g.
    • VR distraction therapy to treat anxiety or provide interactivity to immobile/elderly people
    • AR/VR for training medical staff on new skills or providing support during rare procedures
    • AR/VR and haptics to support remote surgery teams (where remote surgeons are consulting/supporting a local team that is actually performing the surgery in near real-time)
  • Connected ambulance
  • Low cost diagnostic devices that plug into smartphones, e.g. ultrasound devices like Butterfly

This is where many telcos entering the digital health market have chosen to focus in terms of applications, in particular on video consultations owing to their dependence on high quality connectivity, broad relevance across the healthcare market from GPs to hospitals and specialist services such as physio. We believe that video consultations are more likely to provide the foundations of a digital health business for operators in developing markets, where access to care is more difficult than in developed markets, and where operators benefit from relatively stronger brand power and reach across their national footprints.

That said, newly emerging fields such as the use of AR/VR in healthcare workflows are highly connectivity dependent and therefore may be valuable entry points for operators in more advanced healthcare markets.

Data & analytics

The aim of these applications is to gather data from across the healthcare system in order to improve access, and inform healthcare policy and delivery best practices

  • Personal / universal health records, e.g. a system to make patient records from all health organisations available in a single place to patients, and to healthcare providers with patient consent (see our article where we explore how blockchain is an enabling technology for universal health records)
  • Population level health analytics (e.g. understanding prescription trends at a national level, best practice in treatment of chronic diseases, tracking of delivery of population level services such as cancer screening)
  • Workflow management tools, e.g.
    • improving processes in hospital or across multiple healthcare organisations, such as Google Streams
    • using AI and analytics to optimise workflow, for example to prioritise patient visit schedules for mobile clinicians/nurses

Many telcos see supporting the development of some form of healthcare data exchange is an attractive long term prospect, since they perceive this approach to be more closely linked to their existing business model than developing one or a few digital health applications.

While we agree that telcos are well positioned to play a coordination role in healthcare, given their existing skills, reach across government, enterprise and consumers, and their national presence, it is a not an easy or a quick win. The experience of TELUS and Telstra, who are playing this role to varying degrees, demonstrates that this should be a long term ambition, that requires deep knowledge and relationships across the healthcare industry to execute.

Remote monitoring

We define remote monitoring as digital health applications where the data collected from sensors and cameras feed into EMRs/EHRs, and trigger specific notifications or actions for healthcare providers, e.g. alerting clinicians and doctors of a patient’s deteriorating health before they require an emergency hospital visit.

  • Drug adherence, e.g. devices and apps to track medication schedules, reminders, potentially included as sensors inside pills in the future
  • Chronic disease management, e.g. sensors / apps to monitor key vital signs or use of health questionnaires to support patients with diabetes, COPD, heart failure, etc.
  • Palliative care / high risk post-surgery care, e.g. daily questionnaires and vitals monitoring to assess recovery or risk levels
  • In-hospital monitoring, e.g. connected sensors on in-patients so nurses can monitor a larger number of patients at once, with alerts for ones requiring urgent attention

In our research on the potential impact of 5G on the healthcare sector, based on surveys with healthcare professionals to understand efficiency and improved health outcomes they believe different digital health use cases could deliver, remote monitoring came out as by far the most valuable application area. However, the key challenge in remote monitoring is proving the business case, since implementation costs are still relatively high, and proving a negative (i.e. that a patient avoided a hospital visit) is difficult in practice.

Growth across the application areas: The impact of COVID

The modelling above, which estimated the potential impact of 5G-enabled digital health use cases, was conducted in 2019. The caveat of this is that the base assumptions and growth rate do not account for the impact of the COVID-19 pandemic.

Though we touch on the qualitative impact of COVID in our recent article “How COVID is changing digital health…”, we will be exploring the quantitative impact across these five application areas, including whether the digital health boom will be long lasting or begin to plateau and decrease, in our upcoming research “Assessing the post-COVID digital health market value”. If you would like more information on accessing this research, or the coverage of the model, please do not hesitate to get in touch.

Amy Cameron is a Senior Analyst at STL Partners, specialising in new opportunities for telcos in the enterprise market, including the healthcare vertical.

Digital health insights pack

This 24-page document will provide you with a summary of insights from our healthcare research and consulting work:

  • Key trends in the healthcare industry
  • The role for telecoms: applications and business models
  • Strategies for success: where to start
  • How STL Partners can support you

Request the free digital health insights pack by clicking on button below:

Read more about digital health

Webinar

Telcos in health webinar

In this session Amy Cameron and Yesmean Luk looked at the opportunities for telcos in health. As a growing industry, with a national focus and significant digitisation challenges, healthcare is an attractive vertical for telcos seeking to build new revenues beyond core communications services.

Read more

Research

5G’s healthcare impact

This report explores the impact of 5G on the healthcare industry. It illustrates the benefits and example use cases, as well as quantifying the potential efficiency gains, that 5G will enable.

Read more

Research

TELUS Health: Innovation leader case study

Healthcare is an attractive vertical for telcos to address with digital solutions. Although many telcos have made attempts to capture this opportunity, TELUS stands out as an example of the value of a long-term commitment to healthcare. In this case study, we examine TELUS’ strategy in health, evidence of its success, and draw out lessons for other telcos

Read more

Telco health strategies: Learning from TELUS and Babylon’s telehealth partnership

Telco health strategies: Learning from TELUS and Babylon’s telehealth partnership

With the right strategy and appetite for a long term commitment, healthcare can be a very promising growth vertical for telcos. In this webinar, Amy Cameron will outline telcos’ right to play, potential business models and focus areas for telcos in health.

In the context of COVID-19, telehealth is clearly a key opportunity in healthcare. To understand what it really takes to succeed in this market, we are joined by David Thomas, Managing Principal of Global Health Strategy at TELUS, and Mairi Johnson, Head of Corporate Development at Babylon Health.

With them we discussed:
– How do they work together?
– What are the potential partnership models between telcos and digital health players?
– What are the pre-requisites for telcos to build successful partnerships in health?
– And open to your questions

Webinar preview: Digital health – a new priority for telcos due to COVID?

You’ll need to submit your name and email to access the recording

See our other forthcoming webinars or catch up on any you’ve missed

Presenters & Panellists

Amy Cameron

Amy Cameron

Senior Analyst

STL Partners

Mairi Johnson

Mairi Johnson

Head of Corporate Development

Babylon Health

David Thomas

David Thomas

Managing Principal of Global Health Strategy

Telus

Recent health research to complement the webinar

May 2020

Digital health in South Korea: five examples of digital health beyond telemedicine

South Korea has widespread 5G coverage & high demand for 5G services. There is growing investment in digital health from its leading telecoms operators.

Read more

how covid is changing digital health and what it means for telcos

June 2020

How COVID-19 is changing digital health – and what it means for telcos

The COVID-19 pandemic has led to a rapid increase in adoption of telehealth solutions globally. What does this mean for telcos investing in digital health?

 

Read more

How telcos can coordinate care of the elderly healthcare

April 2020

Coordinating the care of the elderly

Telcos are well placed to enable the healthcare sector to meet the rising demand for secure and reliable in-home monitoring and treatment for the elderly.

 

Read more

The digital health opportunity for telcos

An overview of the opportunity in digital health for the telecoms industry and how telcos should address the healthcare market

Our overview of the digital health opportunity gives you some of our current thinking around healthcare and the role for the telecoms industry. Read more specialist research and articles on digital health, and get in touch with our healthcare specialists, on our digital health hub.

What is digital health?

The landscape of the healthcare industry is changing on a global scale. Populations globally are growing, ageing and, particularly within developing markets, becoming wealthier. This creates a strain on the healthcare industry not only due to the increasing number of patients who need access to medical services, but also because older and wealthier populations bring a corresponding rise in chronic/non-communicable diseases (NCDs). The focus of health systems is therefore moving from the treatment of acute, one-off, illnesses towards the routine management of longer-term diseases and health issues (e.g. diabetes, COPD). These patients require more constant care, leading to a significant rise in demand on medical professionals and medical infrastructure.

How to drive efficiency with technology in digital health

The healthcare industry remains, even in developed or high-income markets, one of the least digitised sectors globally. Many hospitals still run manual, paper-based operations. In order to address the growing demands of patients, the healthcare industry must transform, adopting technology to drive efficiencies within the sector.

Digital health: A definintion

Digital health is the development and implementation of solutions across the four pillars of technology laid out above, which will help support the industry in addressing its resource issues. Trends around big data, machine learning/artificial intelligence (ML/AI), the IoT, edge computing, and 5G will help the industry move towards better, more preventative and more tailored care.

Why telcos should focus on digital health

A real opportunity for telcos to move beyond core connectivity

Telcos globally are facing big challenges. Connectivity services are becoming increasingly commoditised and operators are seeing a steady decline in core revenues. Across both consumer and enterprise markets, telcos are at risk of becoming seen as only utilities.

There has been a lot of hype around new network technologies such as 5G, edge computing, the IoT, and the new revenues they could bring to the telecoms industry. However, even with these new technologies, providing connectivity alone will not drive sustainable growth for operators. With a connectivity only approach, even if average revenue per user (ARPUs) for new services start higher initially, they are unlikely to remain high and will face the same commoditisation as seen with 4G services.

At STL Partners, we are therefore urging the operators to move beyond their core connectivity offerings and play further up the value chain, exploring the vertical opportunities within application enablement and solutions and applications. This will enable them to build stickier, value add offerings, and capture a larger share of wallet.

Healthcare offers a strong opportunity to do just this. We see the reason as twofold:

1. The healthcare industry is one of the least digitised sectors worldwide: There are many opportunities for digitisation across the healthcare market where other industries have existing capabilities. Partners can therefore introduce a wealth of potential new technologies, applications, and services to help drive efficiency.

2. The healthcare industry has a limited amount of IT/technology expertise: The industry is therefore ripe for a partner with strong technological capabilities to deliver end-to-end services to the healthcare providers. Most providers do not have the internal skills to develop, implement, and manage new technological services – this is an opportunity to provide professional, education, and integration services beyond traditional offerings.

Not only does the healthcare market therefore offer a lot of potential opportunities for IT transformation and the introduction of digital services, but also, we believe that operators are well positioned to seize and capture this opportunity.

A strong right to play for telcos in healthcare

In the majority of circumstances, telcos with a well-defined and committed strategy can build a strong right to play in the healthcare space, even versus the internet giants and hyperscalers such as Google and Amazon. This is because:

• The operator is a regional brand: operators have a strong local presence in their respective regions – this brings a level of trust, credibility in understanding local needs, trends, and regulations, and often existing relationships with key government and regulatory bodies. Competition from global players will therefore be limited given lack of local presence and expertise. The operators’ regional brand also brings market access and reach to smaller more niche solutions providers who see the operators as potential channel partners to enter new markets.

• The operator has a local workforce: Because the healthcare industry has a relative lack of technical maturity and IT expertise, co-development and end-to-end implementation of solutions will be essential in driving adoption. The regional field force of the operators can work directly with healthcare providers to develop bespoke end-to-end solutions and educate clinicians on how to use/manage the new infrastructure. This is something which the healthcare industry needs from its partners and is something which, due to their productised business models, the hyperscalers cannot deliver.

• The operator is heavily regulated: operators are regulated by local governing bodies. A key issue in addressing healthcare is the perception of reliability, security, and data privacy – a perception which telcos live up to. This also gives operators a rare advantage over hyperscale/global internet players (e.g. GAFA), who are often under fire for the data security and are perceived as being relatively unregulated in comparison to operators.

• The operator has longevity: Given their size, ties with governing and regulatory bodies, and integration into daily life, telcos can give healthcare providers a high level of confidence that they will be around for the long haul. Healthcare providers do not want to invest resources into building and implementing a solution with an enterprise that won’t be there in a few years – they need the security that the solution and support will be around for the many years that they are using it. This is especially true in healthcare, due to the relatively slower pace of change in the industry.

Healthcare offers telcos a sustainable role for lasting growth

As well as operators providing a sense of reliability to healthcare providers, the healthcare industry offers operators a more stable opportunity relative to other verticals. Healthcare spending per capita is increasing globally and governments are unlikely to cut this spending – healthcare is a universal need and, as populations grow and increase in wealth, there is little to no scope to reduce total spend. Furthermore, given that in many markets healthcare sits within the public sector, the industry faces fewer external capitalist pressures. There is therefore less potential volatility in the sector and within the ecosystem, contributing to the stability and longevity of the opportunity for telcos.

This is not to say that the healthcare industry has a wealth of money to spend on IT and transformation – providers are having to do more and more with their money to make ends meet as demands on medical infrastructure increase. However, for operators who can show the value of their solutions and services in driving significant efficiency gains for providers, they will be able to create a permanent role for themselves as a partner in the healthcare ecosystem.

How to address the digital health opportunity

There are different segments of the healthcare industry and therefore different strategies telcos should adopt to address each one. We give an overview of these in our recent article – Four strategies for telcos in healthcare. However, we outline four key takeaways from across our consulting and research below.

1. A well-defined mergers and acquisitions (M&A) strategy will be essential

In order to move into the healthcare industry telcos will need to build industry expertise and credibility, especially if they are looking to play further up the value chain. Telcos can solely partner to play in the healthcare sector but, if a telco wants to have a significant presence, then we believe M&A is a necessity – it enables telcos to build expertise in the industry, a better understanding of market dynamics and challenges, and credibility with healthcare providers and IT buyers.

M&A can also enable telcos to build stronger capabilities more quickly bringing solutions to market and reaching customers faster, without the dedication of internal development teams, who may have little knowledge of healthcare end-users needs and priorities.

However, telcos should take a gradual approach, taking time to learn about the market and develop a clear strategy and entry point. They should target acquisitions that can help them work towards a specific goal. Otherwise they risk buying into a part of the healthcare market where they cannot scale.

2. Taking a connectivity “plus plus” approach may leave value uncaptured

There are different models telcos could employ to capture a higher proportion of the value offered by the sector. One option is to leverage their existing strength in connectivity. Telcos could continue to offer traditional networking services (e.g. Private networks, managed LAN, IoT platforms, eventually network slicing) to healthcare providers as to build a stronger presence and customer base in the industry. From there, operators could upsell their customers, learning more about their pain points, and delivering higher value services on top of their connectivity portfolio.

However, moving up the value chain from connectivity is difficult. By taking a bottom up approach, operators lose the credibility to offer vertical specific applications and solutions – why would healthcare providers trust their broadband provider to credibly deliver a healthcare solution? The go-to-market strategy isn’t appropriate and companies such as O2 Telefónica are a good example of how this can stunt success. Read more about O2 Telefónica in our recent telcos in health case studies report.

Furthermore, specialist healthcare applications providers and the internet giants are moving the other way – from solutions and applications down. They are therefore building the expertise and credibility necessary to capture the higher share of wallet in the applications and integration layers, and either bundling in or independent of the underlying connectivity.

Addressing opportunity for telcos in digital health
Although it is initially more difficult for them to do, operators should consider starting with a solutions and applications approach, and then targeting application enablement or a health data exchange as a long term strategy.

3. Co-development will be pivotal in addressing the market

The healthcare industry lacks IT expertise. This is why it offers telcos the opportunity to move beyond connectivity and offer end-to-end services, supporting the providers in implementing and managing new digital solutions.

However, telcos who want to succeed in the healthcare space should engage healthcare providers long before it gets to the commercialisation of solutions. This is because it is the clinicians – the doctors, nurses, carers, who will be using these applications on a daily basis and if they do not understand the application, or trust that it is useful to their routine, they will not adopt it.

Having gone through decades of education and training, medical professionals do not want to feel like they are having a new process or technology forced on them against their will, changing practices they have developed over many years of specialist work. Therefore, through the development process, operators should engage healthcare providers to co-develop solutions that work for the clinicians and that clinicians understand. This will help drive credibility and adoption.

4. Patience will reap rewards

The healthcare opportunity is not a quick win. It will take time to build the necessary presence and capabilities to make a significant and lasting role. TELUS Health, an organisation which offers a benchmark for what operators could achieve in healthcare, began its journey over a decade ago. By continuously building and building expertise, following a clear and patient strategy, with strong buy-in from C-level down to the field force, TELUS Health has built a practice which now accounts for ~8% of TELUS’ total revenues. It has carved out a permanent role in Canada’s healthcare system, and so that 8% will only continue to grow. For more on TELUS Health, download our free case study here.

Telcos looking to pursue the opportunities in healthcare must define a clear strategy and stick with it, highlighting tactical opportunities along the roadmap to justify and secure investment but understanding that healthcare is a long term play for lasting revenues and growth.

A role for telcos in the Coordination Age

The role of telcos in the digital health ecosystem

At STL Partners, we have written extensively about the move of the telecoms industry into a new age. The Coordination Age, which has come about due to global challenges around resource availability and efficiency, reflects that there is a greater need for more effective coordination and sharing of data/information across governments, enterprises, consumers, the internet, processes and things. Read more on the Coordination Age and the role for telecommunications here. This is especially true in healthcare where, as we have mentioned throughout, a lack of resource coupled with growing demands is creating a need for significant efficiency gains.

Furthermore, the healthcare ecosystem is fragmented and complex – from governments to insurers to GP practices to hospitals, there are a wealth of stakeholders who need better coordination between each other, in order to share insights and drive efficiency gains for the sector. We see this as a clear opportunity for telcos to help coordinate, creating as-yet unknown opportunities and deriving lasting value.

Digital health insights pack

This 24-page document will provide you with a summary of insights from our healthcare research and consulting work:

  • Key trends in the healthcare industry
  • The role for telecoms: applications and business models
  • Strategies for success: where to start
  • How STL Partners can support you

Request the free digital health insights pack by clicking on button below:

Read more about digital health

Webinar

Telcos in health webinar

In this session Amy Cameron and Yesmean Luk looked at the opportunities for telcos in health. As a growing industry, with a national focus and significant digitisation challenges, healthcare is an attractive vertical for telcos seeking to build new revenues beyond core communications services.

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5G’s healthcare impact

This report explores the impact of 5G on the healthcare industry. It illustrates the benefits and example use cases, as well as quantifying the potential efficiency gains, that 5G will enable.

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TELUS Health: Innovation leader case study

Healthcare is an attractive vertical for telcos to address with digital solutions. Although many telcos have made attempts to capture this opportunity, TELUS stands out as an example of the value of a long-term commitment to healthcare. In this case study, we examine TELUS’ strategy in health, evidence of its success, and draw out lessons for other telcos

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Four strategies for telcos in healthcare

Four strategies for telcos in healthcare

A rocky start for telcos in health

Historically, telcos have found it hard to succeed in the healthcare vertical. We believe this is because they underestimated the complexity of healthcare delivery and patient data, and the slow pace of change in working practices within the sector.

Many telcos initially approached healthcare from the consumer angle, believing that their reach into the consumer market coupled with connectivity made them good candidates to deliver telehealth (video consultations with doctors) or personal health services directly to consumers. However, most telcos abandoned their ventures after initial failure to identify the right payer, and slow take-up of telehealth as doctors, patients and governments are still not convinced that video consultations can replace face to face ones.

On the data complexity side, a couple of examples are BT’s contract to digitise around 50mn patient records in the UK, and Telstra’s contract to develop national cancer registries in Australia. In both cases, the operators underestimated how much patient records varied between GPs, hospitals, and even within departments. This fragmentation means that digitising healthcare data in a way that makes it easy to share across multiple different stakeholders in the sector is a mammoth task, which requires a strong understanding of how the healthcare sector works, and also of how doctors, clinicians, patients and governments want to use it to improve healthcare outcomes in future. While BT has stepped back from the digital health market since then, Telstra has successfully overcome these challenges and is now scaling up its government health solutions.

Although most developed countries’ healthcare providers have made significant progress in digitising patient records and setting up systems to share basic information, a lot of valuable data remains difficult to share securely, interpret and use to develop new services to improve the efficiency and quality of healthcare outcomes.

However, thanks to the increasing sophistication of consumer health propositions from Fitbit, Garmin, Apple, etc., consumers have become far more aware and demanding of digital health solutions.

We believe the combination of improving health IT systems, more demanding patients, the growing maturity of analytics and AI, and rising cost pressures on healthcare systems together are creating a tipping point for growth in digital health.

So what’s the opportunity for telcos?

Based on our in-depth research of more than ten telcos’ development of digital health businesses, including TELUS, Telstra, Swisscom and KPN, we believe operators should take different strategies in different parts of the digital health market.

  1. Consumer wellness and self-care: This part of the market includes consumer facing applications and devices to help improve fitness, monitor health KPIs and conditions, etc. This is a highly competitive, global market where leading players are already well established, and we are even beginning to see consolidation, e.g. through Google’s acquisition of Fitbit. It is not well suited to telcos’ strengths, although telcos with a presence in their local healthcare markets may be attractive partners for global consumer wellness players seeking to link into the formal healthcare market.
  2. Remote care delivery & monitoring: Many of the devices and applications used in this segment are similar to the consumer wellness market – but the difference is they are provided by, paid for, and prescribed by healthcare providers (doctors, nurses, clinicians, etc.). These include services to manage chronic conditions, as well as to improve access to health services, such as online appointment bookings, prescription management, video consultations and personal health records. Developing services that fit into healthcare providers’ workflow, are easy for patients to use, and adaptable to different users’ needs takes significant time and effort, but healthcare providers lack the resources to pull all the pieces together themselves. For this reason, we believe that in most cases telcos should partner to deliver end-to-end services in this category. Depending on a telco’s strategy, they may also develop or acquire a small number of solutions in this area.
  3. Insurance and administrative reform: This is the biggest segment of the digital health market today, covering all the IT systems that help hospitals, GPs, labs, insurance companies etc. manage patient records and day to day activities. These systems are crucial for enabling improved data sharing across the industry and development of more sophisticated remote care and delivery solutions. In the hospital market, there are some large global players, but in most cases healthcare providers’ needs are dependent on the structure of the local market so most software providers tend to be locally based. This has been the main entry point for telcos seeking to build their presence in the healthcare market, and an important area to have a foothold in to play a coordination role.
  4. AI-enhanced healthcare delivery: As the digital health solutions across the first three categories become more sophisticated, it will become possible to apply advanced analytics to improve nearly all aspects of healthcare delivery. In many cases, AI models will work well across multiple geographies – for instance Google’s AI breast cancer screening tool delivered similar results in the US and the UK (in both countries it was more accurate than human radiologists). As in any application of analytics, access to data is the fundamental requirement, so this opportunity will be more accessible to telcos that are managing data through other solutions (this doesn’t necessarily have to be patient records, it could be operational information about how healthcare services are used or delivered).

Note that this view of the digital health market is built around the potential opportunities for telcos, so it excludes areas that are less relevant for them, such as drug discovery and development.

Digital health insights pack

This 24-page document will provide you with a summary of insights from our healthcare research and consulting work:

  • Key trends in the healthcare industry
  • The role for telecoms: applications and business models
  • Strategies for success: where to start
  • How STL Partners can support you

Request the free digital health insights pack by clicking on button below:

Read more about Virtualisation, SD-WAN & NFV

Webinar

Telcos in health webinar

In this session Amy Cameron and Yesmean Luk looked at the opportunities for telcos in health. As a growing industry, with a national focus and significant digitisation challenges, healthcare is an attractive vertical for telcos seeking to build new revenues beyond core communications services.

Read more

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5G’s healthcare impact

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Read more

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TELUS Health: Innovation leader case study

Healthcare is an attractive vertical for telcos to address with digital solutions. Although many telcos have made attempts to capture this opportunity, TELUS stands out as an example of the value of a long-term commitment to healthcare. In this case study, we examine TELUS’ strategy in health, evidence of its success, and draw out lessons for other telcos

Read more

Telcos in health webinar

Telcos in health webinar

10 case studies show how to crack the healthcare opportunity

First broadcast: 26 November 2019

In this webinar Amy Cameron and Yesmean Luk looked at the opportunities for telcos in health.

As a growing industry, with a national focus and significant digitisation challenges, healthcare is an attractive vertical for telcos seeking to build new revenues beyond core communications services. But it is also notoriously slow to change and carries a high reputational risk if anything goes wrong.

Through ten case studies on telco plays in healthcare – including both successes and failures – they outlined the key considerations and potential strategies for telcos targeting the healthcare opportunity.

 

You’ll need to submit your name and email to access the recording

See our other forthcoming webinars or catch up on any you’ve missed

Our presenters

 

Amy Cameron, Senior Analyst, STL Partners

Amy has worked on projects including how telcos should approach new technologies like AI and blockchain and adjacent verticals like healthcare. Before joining STL in 2017, Amy was Head of ICT Research at BMI Research, as well as the lead analyst covering telecoms markets in the Middle East and Africa. Amy speaks fluent French and intermediate level Mandarin and holds an MSc in Chinese Politics from the School of Oriental and African Studies.

Yesmean Luk, Consultant, STL Partners

Yesmean is experienced in consulting assignments on NFV/SDN implementation and the Internet of Things. Before joining STL, she worked as a consultant at Deloitte and a business analyst at IBM. Yesmean holds a Global MSc in Management from the London School of Economics, specialising in strategy and international business, and a BSc (Hons) in Economics and Econometrics from the University of Kent.

Recent healthcare research to complement the webinar

May 2019

Telcos in healthcare: Winning in a long game, Babylon, and the impact of 5G

Insights on the role for telcos in healthcare, the main lessons learned to date, and the impact of 5G on healthcare and telcos within it. From the TELUS Carrier Health Summit, Toronto, May 2019.

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October 2019

Telcos in health – Part 2: How to crack the healthcare opportunity

We look at nine telcos’ approaches to the healthcare market to identify keys areas of opportunity and lessons on what it takes to succeed.

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January 2019

Telcos in health – Part 1: Where is the opportunity?

We look at overarching trends in digital health and how telcos, global internet players, and health focused software and hardware vendors are positioning themselves to address the needs of resource-strained healthcare providers.

Read more

Telcos in health – Part 2: How to crack the healthcare opportunity

This report is a follow-up from our first report Telcos in health – Part 1: Where is the opportunity? which looked at overarching trends in digital health and how telcos, global internet players, and health focused software and hardware vendors are positioning themselves to address the needs of resource-strained healthcare providers.

It also build on in depth case studies we did on TELUS Health and Telstra Health.

Telcos should invest in health if…

  • They want to build new revenue further up the IT value chain
  • They are prepared to make a long term commitment
  • They can clearly identify a barrier to healthcare access and/or delivery in their market

…Then healthcare is a good adjacent opportunity with strong long term potential that ties closely with core telco assets beyond connectivity:

  • Relationships with local regulators
  • Capabilities in data exchange, transactions processing, authentication, etc.

Telcos can help healthcare systems address escalating resourcing and service delivery challenges

Pressures on healthcare - ageing populations and lack of resources
Chart showing the dynamics driving challenges in healthcare systems

Telcos can help overcome the key barriers to more efficient, patient-friendly healthcare:

  • Permissions and security for sharing data between providers and patients
  • Surfacing actionable insights from patient data (e.g. using AI) while protecting their privacy

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Why telcos’ local presence makes them good candidates to coordinate the digital and physical elements of healthcare

  • As locally regulated organisations, telcos can position themselves as more trustworthy than global players for exchange and management of health data
  • Given their universal reach, telcos make good partners for governments seeking to improve access and monitor quality of healthcare, e.g.:
    • Telco-agnostic, national SMS shortcodes could be created to enable patients to access health information and services, or standard billing codes linked to health IT systems for physicians to send SMS reminders
    • Partner with health delivery organisations to ensure available mobile health apps meet best practice guidelines
    • Authentication and digital signatures for high-risk drugs like opioids
  • Healthcare applications need more careful development than most consumer sectors, playing to telcos’ strengths – service developers should not take a “fail fast” approach with people’s health

Telcos have further reach across the diverse  healthcare ecosystem than most companies

The complexity of healthcare systems - what needs to be linked
To coordinate healthcare, you need to make these things work together

However, based on the nine telco health case studies in this report, to successfully help healthcare customers adopt IoT, data-driven processes and AI, telcos must offer at least some systems integration, and probably develop much more health-specific IT solutions.

Case study overview: Depth of healthcare focus

Nine telcos shown on a spectrum of the kind of healthcare services they provide
Where Vodafone, AT&T, BT, Verizon, O2, Swisscom, Telstra, Telenor Tonic and TELUS Health fit on a spectrum of services to healthcare,

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TELUS Health: Innovation leader case study

Introduction

Why healthcare?

Healthcare is one of the few sectors where, in every country, there is a huge and ongoing need. This demand will only rise as populations age and grow, exacerbating significant pain points relating to costs and funding models, and unmet needs. Meanwhile, the combination of cost pressures, the sensitive nature of health data and the complexity of healthcare systems have left it as one of the least digitised sectors. Thus, many telcos have identified healthcare as a sector where there is significant opportunity to drive efficiency through new services leveraging their network infrastructure and customer reach.

In some respects, telcos are well positioned to fill the healthcare sector’s needs. For example, enabling doctors to offer virtual care to patients through secure messaging or video chats, and to share electronic health records with patients and other doctors more easily, seem like low hanging fruit. However, in practice this is much more complicated; hospitals, primary care providers (general practitioners, family doctors), specialised clinics (e.g. mental health, physiotherapy) and pharmacies all store patient records in different systems (that are not necessarily digitised), and have different views on how to securely share data between each other. Every healthcare system also has a unique funding model, ranging from predominantly privately funded through insurance providers or out of pocket payments, like the United States, to single payer models like the UK, where the National Health Service accounts for more than 80% of healthcare spending, and budgets – including IT solutions – are closely tied to electoral and economic cycles.

These synergies have prompted a number of telcos to launch consumer health services or to pursue opportunities in the health IT market. Besides TELUS, AT&T, Verizon, Vodafone, Telefónica, NTT DoCoMo, Telstra, Deutsche Telekom AG and BT have all been active in healthcare. We explore their strategies and differences in comparison with TELUS’ approach on page 33. Why TELUS? This report focuses on TELUS Health, which has one of the longest and the most committed investment into the healthcare sector by a telco that we are aware of. We see it as a leading example of how telcos can build a business in healthcare, as well as in other sectors that are not instinctively linked to telecoms.

To put the Canadian healthcare market, which TELUS entered ten years ago, into context:

  • Canada’s healthcare system is fragmented between 13 provincial/territorial systems and the federal level.
  • The payer model is split between the government (70%) for necessary hospital and physician services and private insurers (30%) for supplemental care and drug prescriptions.
  • Healthcare spending accounted for 11.1% of GDP in 2016, on par with other developed countries globally.
  • The huge geographical distances mean that the 19% of Canadians living in rural areas have very limited access to specialist care.
  • Adoption of electronic medical record (EMR) systems among family doctors and specialised clinics started from a low base of 20% in 2006, rising to 62% in 2013 and 80% by 2017.

Why TELUS got into healthcare: a viable growth opportunity

Starting in 2005, led by the CEO Darren Entwistle, TELUS executives came to a consensus that just focusing on connectivity would not be enough to sustain long term revenue growth for telecoms companies in Canada, so the telco began a search into adjacent areas where it felt there were strong synergies with its core assets and capabilities. TELUS initially considered options in many sectors with similar business environments to telecoms – i.e. high fixed costs, capex intensive, highly regulated – including financial services, healthcare and energy (mining, oil).

In contrast with other telcos in Canada and globally, TELUS made a conscious decision not to focus on entertainment, anticipating that regulatory moves to democratise access to content would gradually erode the differentiating value of exclusive rights.

By 2007, health had emerged as TELUS’ preferred option for a ‘content play’, supported by four key factors which remain crucial to TELUS’ ongoing commitment to the healthcare sector, nearly a decade later. These are:

  1. Strong correlation with TELUS’ socially responsible brand. TELUS has always prioritised social responsibility as a core company value, consistently being recognised by Canadian, North American and global organisations for its commitment to sustainability and philanthropy. For example, in 2010, the Association for Fundraising Professionals’ named it the most outstanding philanthropic corporation in the world. Thus, investing into the healthcare, with the aim of improving efficiency and health outcomes through digitisation of the sector, closely aligns with TELUS’ core values.
  2. Healthcare’s low digital base. Healthcare was and remains one of the least digitised sectors both in Canada and globally. This is due to a number of factors, including the complexity and fragmented nature of healthcare systems, the difficulty of identifying the right payer model for digital solutions, and cultural resistance among healthcare workers who are already stretched for time and resources.
  3. Personal commitment from the CEO, Darren Entwistle. TELUS’ CEO since he joined the company in 2000, Based on personal experiences with the flaws in the Canadian healthcare system, Darren Entwistle forged his conviction that there was a business case for TELUS to drive adoption of digital health records and other ehealth solutions that could help minimise such errors, which was crucial in winning and maintaining shareholders’ support for investment into health IT.
  4. Healthcare is a growing sector. An ageing population means that the burden on Canada’s healthcare system has and will continue to grow for the foreseeable future. As people live longer, the demands on the healthcare system are also shifting from acute care to chronic care. For example, data from the OECD and the Canadian Institute for Health Information show that the rate of chronic disease among patients over 65 years old is double that of those aged 45-64 (see figure 3). Meanwhile, funding is not increasing at the same rate as demand, convincing TELUS of the need for the type of digital disruption that has occurred in many other sectors.

That all four of TELUS’ reasons for investing in healthcare remain equally relevant in 2017 as in 2007 is key to its unwavering commitment to the sector. Darren Entwistle refers to healthcare as a ‘generational investment’, saying that over the long term, TELUS may shift into a healthcare company that offers telecoms services, rather than the other way around.

Contents:

  • Executive Summary
  • Healthcare can be a viable investment opportunity…
  • …But there are risks
  • Introduction
  • Why TELUS got into healthcare: a viable growth opportunity
  • How TELUS got into healthcare: buying a way in
  • Overview of the Canadian healthcare system
  • The payer model
  • Access to healthcare and demographics
  • TELUS’ objectives and evidence of success in healthcare
  • Build a new revenue stream
  • Synergy: supporting telecoms revenues
  • Differentiate brand among consumers
  • Drive better health outcomes
  • Understanding TELUS Health’s strategy
  • TELUS Health’s three step strategy
  • eHealth market challenges: how is TELUS responding?
  • Comparing TELUS with other telcos: a deeper dive
  • Lessons for other telcos
  • Challenges of the digital health market
  • Healthcare is a long-term play
  • Healthcare matrix: mapping the healthcare sector for telcos

Figures:

  • Figure 1: Snapshot of TELUS Health business
  • Figure 2: Public vs. private healthcare services in Canada
  • Figure 3: Rate of chronic disease rises dramatically among seniors
  • Figure 4: TELUS Health’s reach in the healthcare market
  • Figure 5: TELUS Health is outpacing TELUS in revenue growth
  • Figure 6: TELUS Health’s contribution to TELUS revenues
  • Figure 7: Healthcare investment contributes to improving customer loyalty
  • Figure 8: How do consumers feel about TELUS?
  • Figure 9: TELUS vs. other Canadian telcos’ consumer brand score and rank
  • Figure 10: BC pilot of HHM shows reduction in hospital admissions
  • Figure 11: TELUS acquisitions
  • Figure 12: Methodology for building collaborative solutions
  • Figure 13: List of collaborative solutions and end-users
  • Figure 14: Roadmap for eClaims solution
  • Figure 15: Roadmap for PharmaSpace solution
  • Figure 16: Roadmap for Mobile EMR solution
  • Figure 17: Patient engagement is central to TELUS Health’s target growth opportunities
  • Figure 18: Home health monitoring overview
  • Figure 19: Results of HHM trials across two health authorities in British Colombia
  • Figure 20: Healthcare in TELUS ad campaigns
  • Figure 21: Sample of TELUS Health investments and partnerships
  • Figure 22: Telco digital health strategies
  • Figure 23: Healthcare Matrix scoring criteria
  • Figure 24: Where are telcos’ strengths in digital health?