COVID-19 Impact on Asia-Pacific Hospitals: Short- and Long-Term Trends

In association with GRG Health, L.E.K. Consulting has been closely monitoring the impact of the viral outbreak on hospitals in Asia Pacific (APAC). Through our biweekly surveys of hospital administrators and clinicians from China, India, Japan, Australia, Thailand, Indonesia and the Philippines, we have been weighing the increased burden on APAC healthcare systems caused by COVID-19 and how hospitals are responding to the rapidly developing situation. Our survey gauges the impacts on hospital morale, preparedness levels and inpatient capacity and lays out insights on post-COVID-19 planning of hospital operations.

So far we have administered three surveys, one during the period April 27-May 8, the second from May 11-May 22 and the last one from May 25-June 12. The surveys are a valuable metric to track the evolving needs of hospitals as the situation further unfolds. From the collected data, we can identify some definitive short-term changes across the market landscape, which are paving the way for long-term trends to emerge.

China — prepared but cautious

Having combated the virus from its onset, China’s hospitals are ahead of their APAC counterparts on a number of fronts and are in fact geared up to fight a second wave if required. Moreover, hospitals in China had begun carrying out elective and semi-elective procedures at 60%-70% of pre-COVID-19 levels by the end of the second quarter. They are equipped with an ample number of personal protective equipment (PPE) kits to resume hospital operations in a smooth manner.

It should be noted, however, that even though China is headed towards recovery, there still remains a long way to go to completely reverse the COVID-19 impact on hospital operations. Due to a greater emphasis on infection control, surgeries are taking longer; hence, pre-COVID-19 volumes have not been achieved yet. While this may seem like a short-term change, it is very likely that this is the way hospitals will function for a long time — or at least until a vaccine is discovered.

Rest of APAC — safeguarding health and preserving growth 

Largely, other major APAC countries appear to be experiencing recovery trends similar to China’s (see Figure 1). Our survey indicated that hospitals in Japan and Australia expect elective and semi-elective procedure volume to be at 60%-70% of pre-COVID-19 levels by the end of Q2 2020, whereas their counterparts in Southeast Asia and India are expecting to reach the same operational level only in Q3 or Q4 2020. The impact of COVID-19 on inpatient capacity has again differed by country. While hospitals in the Philippines, India and Indonesia report the highest impact and expect the situation to persist over the next few weeks, inpatient capacity levels in Japan, Thailand and Australia are expected to improve as the infection rates slow down.

Regardless of their position along the recovery curve, hospitals in all countries are prioritizing three functions: investment in infection prevention and control, conservation practices for PPE, and clinical staffing levels. The resurgence of the virus is a key concern and hospitals would be remiss if they do not prepare for it, based on the lessons they have already learned.

Accelerated adoption of digital tools

COVID-19 implications for APAC healthcare systems have been profound; however, most pronounced has been the shift towards digital health. Our second survey focused on the digital engagement of healthcare professionals (HCPs) and its effect on stakeholders in the ecosystem. It was found that a significant proportion of HCPs (~40%) used digital or remote engagement tools to deal with medical reps or to complement their in-person interactions. Most of the remote digital users (80%-90%) are HCPs who have used the engagement tools moderately or extensively during their practice, and most of them expect to continue using these avenues post-COVID-19.

The role of digital health in ensuring connectivity between patients and doctors during this critical time highlighted its relevance even in a post-COVID-19 world. Though in-person interaction can never be negated, digital interaction in healthcare is here to stay. To increase the adoption of digital health tools, providers will have to broaden their capabilities to meet more of doctors’ expectations. In our survey, HCPs indicated that lack of localized content, poor platform design and insufficient update frequency are key barriers to increasing their use of digital engagement tools. Our survey further indicated that medtech companies in particular will need to improve their digital interaction capabilities in order to better satisfy their users.

Strengthen relations with suppliers

Apart from the heightened use of digital health tools, hospitals also want to upgrade their relations with suppliers and medtech providers. They are hoping to cultivate direct relationships that can help them procure supplies and manage risks more efficiently. Within this framework, hospitals are also looking to evolve from a simple exchange of services or goods to partnerships that ameliorate day-to-day operations. To keep up with the dynamic marketplace conditions, some hospitals are even seeking more consigned inventory, so as to not tie up their capital in unwanted stock. These are some considerations that suppliers must look at to create mutually beneficial working relationships.

Conclusion

As we continue to closely monitor the rapidly evolving situation in APAC through our biweekly surveys, we find a gamut of responses from different countries. While China has hit normalcy in pre-COVID-19 levels of inpatient capacity and volumes of elective medical procedures, other countries are at different stages of the recovery curve. In order to gain an edge over competitors, companies in the healthcare ecosystem must skew their strategies according to the requirements of the specific markets they are targeting. More than that, to ensure growth in the region, these players need to anticipate likely shifts in customer needs and spending behaviour. As far as new opportunities go, service-oriented partnerships are an emerging theme and need to be thoroughly explored and pursued to establish long-lasting and symbiotic relationships with hospitals.

Please feel free to leave your questions and comments about these findings and your expectations of similar surveys in the future.