• Thursday, March 28, 2024
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BusinessDay

How tech firms are growing healthcare business

‘States should leverage PPP to deliver universal health coverage’

The disruption that investment by technology companies have brought into Nigeria’s healthcare business has come to stay and continues to drive significant growth in the back and front ends of service delivery.

These companies are leveraging tech solutions to tweak the supply chain of care – from manufacturing to distribution, diagnostics, telemedicine, facility management and self-care services, among others.

As adoption of tech increases, those focused on servicing hospital needs have gained wider reach and are expanding to other segments of healthcare, compared to the slow growth trailing digital care services that target consumers directly.

Lifebank’s revenue nearly doubled to over $1 million in 2021 from $600,000 in 2020, after diversifying into two products other than its core base of delivering blood supplies to hospitals.

The logistics company introduced AirCo, an oxygen plant in Nasarrawa State last year to address the dire demand for oxygen in hospitals. The plant uses predictive technology to generate medical oxygen, with a production capacity of 100 cylinders.

It also unveiled StockBank, a distribution system that distributes medical consumables across care centres in Africa. Lifebank eyes control of large stakes in the supply of personal protective equipment (PPE) on the continent as it builds on the future of StockBank.

Lifestores Pharmacy is another tech-driven company that runs an efficient retail drug business, buying directly from manufacturers and importers to supply several hospitals. Its partnership with top local and international suppliers helps it reduce the risk of fake drugs, which remains a scourge in Nigeria’s pharmaceutical industry.

It makes over $300,000 yearly, running its own chain of pharmacies and supporting affiliate pharmacies with tech solutions in store operations, inventory management and data capturing at points of sale, among other things.

Analysts are positive that the growth of tech-enabled infrastructure such as this will be sustained as gaps in Nigeria’s healthcare structure offer attractive opportunities for investors to tap. Health indices in Nigeria remain one of the worst in the world and investors are upping efforts to solve these challenges.

Olamide Brown, the founder of Flying Doctors Healthcare Investment Group, tells BusinessDay that the business-to-business segment of healthcare is growing significantly as businesses embrace these technology companies and the work they do.

“Technological innovation is really transforming healthcare. Tech companies are changing the way that other businesses in healthcare run more efficiently.

“I think the healthcare sector is attractive in Nigeria and we haven’t even scratched the surface. It will remain an area for private investment. There are different sub-sectors and opportunities across the healthcare value chain,” Brown says.

Lifestores also integrates consumer products that allow people to speak with pharmacists, book free vital signs checks or order their medications digitally. An additional feature of its services is a programme dedicated to chronic diseases, giving millions of patients more personalised care.

In terms of healthcare facility management, more than 400 health facilities in three countries, including Nigeria, use Helium Health tech solutions for medical records keeping, telemedicine and multi-channel billing.

Its solution enables healthcare funders such as health maintenance organisations (HMOs) or donor agencies with transparent payment systems and equally helps patients to access personal records, including prescriptions and lab results.

After the COVID-19 pandemic struck in 2020, Helium Health activated its telemedicine platform. The move saw over 20 percent of its existing customers jump on the product as healthcare experts, especially doctors, needed ways to interact with patients outside the hospital walls and patients also were finding new healthcare providers.

It has also widened its portfolio to include a healthcare financing product that issues health facilities collateral-free loans.

Consumer-targeted services

Tech companies are also changing the way consumers of healthcare access services. From the comfort of their phones, patients are able to access doctors, book appointments and get medications.

HealthPlus, one of Nigeria’s leading retail pharmacy chains, launched a mobile application last December, enabling patients to see pharmacists online, order their medications and receive it at home.

The e-pharmacy has a partnership with Jumia Logistics to ensure the delivery of healthcare products to its customers across the country.

However, the growth of consumer-targeted services is still slow at the moment.

The digital care segment has not seen so much uptake across demographics in Nigeria, except within the upper-middle class where people are slowly becoming more open to telemedicine services and are also using more health monitoring apps, analysts tell BusinessDay.

A 2021 market intelligence report titled “Innovations in Health Product Distribution in Sub-Saharan Africa” showed that user retention seems low among companies that target consumers directly, while provider-facing companies report much higher levels of retention.

Companies in this segment are banking on the potential of improved internet penetration in rural communities where quality care is scarce and urban areas that are affected by poor internet speed.

The accessible market is over 35 million Nigerians and could grow further by 25 percent year-on-year, Oluwatobiloba Banwo, Helium Health’s head of private sector strategy, told BusinessDay in a report earlier.

“We have seen MTN’s announcement that they are doubling down on last-mile internet penetration in Nigeria and that’s exciting because we know that the number of smartphones will continue to increase. We know that data costs will continue to go down and we know that it is going to be more affordable for people to be able to access the internet. So all of these points to the fact that business-to-consumer (BTC) value is coming but it depends on the number of smartphones and data cost,” Brown states.

Overall, analysts agree technology innovation will increasingly play a huge role in healthcare growth as companies jostle to outdo themselves with new initiatives.

Read also: LASHMA partners PharmAccess to expand quality healthcare delivery

But companies will also have to deal with competition coming from traditional care providers who are now transforming their services into digitally accessible products.

For instance, Samuel Adekola, national chairman, Association of Community Pharmacists of Nigeria (ACPN), says the association is also seeing growing adoption of technology platforms by members and will continue as no one wants to be left behind in a fast-changing market.

“There is huge potential in technology platforms because it increases accessibility without much inhibition. As a stakeholder, we approve it. But Nigerians must know that you cannot just go to any online platform to order drugs if it is not certified,” according to Adekola.