Telehealth Market in Africa

The regulatory environment for telehealth in South Africa was relaxed due to COVID-19, fostering heightened innovation and widespread adoption in the sector.

ROSE TUYENI PETER

Economist, Percept

Anja Smith

Economist, Percept

PERCEPT, SA

Percept is a South Africa-based, multi-disciplinary consulting firm started by Shivani Ranchod and Dave Strugnell, both actuaries. We have quite a broad skill set, including actuarial analysis, data science, economics, public health, and health financing. Much of our donor-funded work is in the public health sector, where our telehealth and innovation work is situated. We identified examples and initiatives with wider population-level benefits not only limited to a small private sector population, as typically found in Sub-Saharan Africa.

Our telehealth or telemedicine work is much more South Africa-focused, while the innovation work speaks more broadly to the primary healthcare innovations happening on the rest of the continent, especially in East Africa, where there are a lot of exciting projects happening at this time.


TELEMEDICINE TRENDS IN SA

Our telemedicine work was borne out of a need to document recent changes in the telemedicine and digital health landscape due to COVID-19.

Before the Covid-19 pandemic, South Africa’s regulations were very onerous around telehealth and did not allow for first-time consultations between healthcare professionals and patients through telemedicine. These regulations have now been relaxed due to the need to protect healthcare workers and keep patients out of health facilities where COVID-19 infections can occur. Now first-time consultations between health workers and patients can occur via telemedicine.

The relaxation of these restrictions has led to much innovation and the entry and expansion of new and existing players and their offerings in the market.

We have developed a series of three papers documenting these changes, two of which are available on our website, and one is forthcoming. The insights we provide are based on interviews with the private sector players, and they track the significant growths we have seen in the telemedicine market, especially in direct doctor-to-patient telemedicine and other areas.

The first report in the series, ‘The Nurse Can See You Now,’ provides an overview of the barriers and opportunities in the South African telemedicine market.


IMPACT OF COVID

Pre-Covid-19, there was a moderately hostile environment towards some types of telehealth precisely because of the regulations. During these times, there were some very successful telemedicine models, particularly in what we have been calling the provider-to-provider models, where a health professional provides telehealth services to another health professional, such as a nurse dialling in a doctor to get specialist assistance, and messaging Apps for health workers such as Vula which facilitated patient referrals.

Due to COVID-19, there has been an increase in demand for direct-to-patient telemedicine services, and a relaxation of regulations has led to an increase in supply. Although data shows that as COVID-19 lockdowns eased, direct-to-patient consultations declined, they are still higher than pre-Covid levels. This trend will need to be monitored over time, especially as the funding model becomes more conducive and people become more accustomed to telemedicine.

Please refer to the Case Notes from the Frontier report for more detailed case studies on six telemedicine providers in South Africa.


INNOVATION IN AFRICA

Our Africa innovation mapping series of reports aims to showcase some interesting technology-enabled tools in the primary healthcare setting that can help make primary healthcare more affordable, more accessible, and more equitable. We researched solutions that have proven themselves in different regions and spoke to organizations in predominantly low- and middle-income countries like Rwanda, Ghana, Kenya, and Mozambique.

The series of innovation briefs we produce first attempts to create a framework for categorizing these innovations and secondly aims to describe some of these innovations in more detail. For instance, with Babyl, we explore telehealth and telemedicine in the Rwandan healthcare system and the solutions their national health insurer has specifically adopted.

We examine apps used by community healthcare workers in the primary healthcare context and actual examples in lower-income settings like Mozambique and Kenya. We also considered how patient wearables and support can help decongest healthcare facilities.

The briefs also look at the environmental factors that enable or impede innovation, looking at specific lessons from the different case studies and thinking about it more broadly.


THE BABYL CASE STUDY

Babyl is an ongoing telemedicine initiative by the UK-based company Babylon in Rwanda. In the UK, Babylon provides telemedicine services to the NHS. Under the Babyl project, Babylon is adapting its product offering to African markets. And Rwanda is the first African market where it has been rolled out at scale.


BARRIERS TO ADOPTION

While the innovations we mainly considered originated from the private sector, the reality in Africa is that scaling these innovations heavily depends on public sector adoption. Therefore, an inability to integrate the technology and data systems in a public sector context will leave the adoption of these solutions to only a tiny market in most African countries.

South Africa has a significant private healthcare sector compared to other African countries. Around 17% of its population has private insurance, and a third uses private health services on an outpatient basis. This indicates that South Africa may have a more remarkable ability to pay for private healthcare services than other African countries, limiting the market potential elsewhere in Africa.


REGULATORY ENVIRONMENT

South African telemedicine regulations have been temporarily relaxed, but there is uncertainty as to whether they could return to the way they were before. However, the general perception is that this is unlikely. While Percept has not spoken to regulators and therefore cannot report with certainty on the future of telemedicine regulations, it has been observed that in the public sector, telemedicine is now becoming a part of the permanent solution of delivering primary health care services. This indicates that the regulation will at least become more relaxed. One of the recommendations of the No More Waiting Room series of reports is that the regulation itself needs an entire overhaul because there are aspects of it that are not in line with how people engage with online services, such as requiring written consent from telemedicine clients and physical copies of these consent forms. There is an adaptation that is needed in the regulation itself.


CHALLENGE

The difficulty is that there is often significant enthusiasm about telemedicine because the technology is impressive, and it sounds wonderful that you can now access services remotely. But the reality is that with wide-scale user adoption, people feeling comfortable with the technology, and discussing the same depth of medical problems remotely, these initiatives will be able to gain traction.

There is also the difficulty of assessing impacts because the health outcomes that are actively measured often take a long time to change. The Babyl brief mentions that Babyl has commissioned a proper study on cost-effectiveness, which is still ongoing. But there are some questions about sustainability from a financial perspective, at least in the short term, because it requires so much investment to get people to use it on a sufficiently large scale for the business case to make sense. This is something to keep in mind with all telehealth-specific offerings – without users feeling comfortable with the technology and seeing the value proposition in the technology, it will be tough to generate significant profits over the longer term.


ADOPTION

Telemedicine or the innovations around it are not standalone offerings. They will not replace a doctor or nurse or anything like that. They will improve efficiencies and potentially bring down costs, but they need to be integrated with how doctors and nurses already provide health care. And they need to be sufficiently close to their existing workflow so that you are not creating more work for people and not making it more onerous for patients to access care. So, while some might want to think of it as a total replacement for specific health services, it is not. Telemedicine is an additional way of providing health care.

PROFITABILITY

Although the initial investment may seem like an additional cost, the goal is to save costs in the long run by efficiently triaging patients. This way, many patients won’t have to go to health facilities and can receive care at home if possible. Additionally, patients will be sent to the most appropriate facilities instead of crowding hospitals when they need a lower level of care.


BIG PICTURE

There are benefits of potentially reaching patients who would not otherwise attend facilities. When taken into context, there are many African countries where we have high levels of communicable diseases like TB, HIV, and now COVID, that have consequences beyond the individuals, and these diseases can spread. However, you want people to engage with the system instead. And given the hours, many public facilities are open, for example, between 8 a.m. and 4 p.m. or 7:30 a.m. and 3:30 p.m., as is the case at least in some settings in South Africa, it is tough for people who are employed actually to attend a health care facility. And suppose care can be made more convenient to people who would otherwise not easily be able to access health care. In that case, we may reach populations we never reached and achieve better control of the health conditions and burdens that health systems face.


THE MARKET

While we cannot speak to the sector’s profitability, we have observed increased players entering the South African market. Some are already existing practice management software companies that are now adding telemedicine services to their existing product offering. These companies already have some level of profitability in other areas, which is kind of a start-up offering for them.

Also, some medical aid schemes in South Africa are branching out into providing telemedicine services as part of their product offering and as a way of capturing their own patient market and doctor networks and accessing more patient data. This is something to be aware of for players entering the market. Some big dominant players have a competitive advantage in accessing telemedicine users, both clinicians and patients. So, though new, it is becoming an increasingly competitive market.


MARKET BARRIERS

Regulations in South Africa are an issue. Also, certain dominant players operate in ways that make it challenging for new market entrants and could pose a barrier to entry and competition.

There is also the issue of infrastructural deficit in Africa that makes it very difficult to provide digital health services because data and the internet are expensive, and they are not widely accessible to everyone.

Even electricity is a factor. Across some prominent African cities, you see little kiosks where people charge their cell phones just because electricity is not always available in their homes. This could be an even more significant challenge in rural areas. So, infrastructure is a significant constraint.