Financing digital technology in the healthcare sector
By Nick Hoof, Head of Healthcare Sales UK, BNP Paribas Leasing Solutions UK
The healthcare industry is under immense pressure. Medical staff and skills are in short supply, budgets are getting tighter, and patients’ expectations are changing. At the same time demand for services is increasing and the cost of healthcare – both to deliver and receive – is going up. According to the Economist Intelligence Unit, global healthcare expenditure will reach $8.7 trillion (£6.6 trillion) by 2020, up from $7 trillion (£5.3 trillion) in 2015.
Healthcare providers need to contain these rising costs, while simultaneously improving their service delivery. By no means is this a straightforward task. New technologies have the potential to improve how healthcare is delivered. However, these innovations are not always immediately affordable. For the increasingly cost-conscious healthcare provider, leasing presents an alternative method of procuring critical resources.
The benefits of leasing
Most people are already familiar with the concept of leasing. Due to the high cost of purchasing a mobile phone outright, for example, many users choose to access their devices through a contract. This financial agreement stipulates the length of the contract and payment terms. Leasing operates in a similar way. Rather than face an exorbitant upfront cost, organisations can spread their budgets over a defined period – all the while, enjoying access to the asset of their choice.
Leasing is an increasingly vital part of the digital health industry. It provides healthcare practices and practitioners with affordable access to diagnostic equipment such as MRI and X-ray machines, office hardware and software such as computers and CRM systems, as well as home health monitoring devices like blood sugar readers. This, in turn, benefits the patients. They receive efficient, quality service, and enjoy a more satisfying healthcare experience.
Not only does leasing offer healthcare providers with affordable access to these connected technologies, it can also cover equipment maintenance, security services and upgrades. Healthcare providers can manage their budgets more effectively thanks to predictable costs built into the contract. There’s greater flexibility with leasing due to the variety of available options: they can either purchase the technology over time with regular payments, or simply hire the asset for a defined period. Plus, it’s tax efficient – rental payments count as a business expense.
A leasing agreement helps healthcare providers stay current with the latest and most efficient equipment. Rather than being stuck with obsolete, outdated equipment, healthcare providers can easily upgrade their assets at the end of their leasing contract. This is a huge benefit as technology is continually updating. Here are five trends that are revolutionising the future of healthcare.
Artificial Intelligence (AI)
Artificial intelligence and automation can help healthcare providers carry out many administrative tasks. Payment and appointment reminders are increasingly automated, and virtual assistants or bots are being used to create detailed patient reports, as well as schedule appointments. It’s a far more efﬁcient approach – and it saves healthcare providers valuable time and money.
AI is also being used in drug testing and development, precision medicine and diagnosis. Research from OpenText shows that one in four patients believe that AI will give them a more accurate medical diagnosis. Forrester has predicted an investment boost of 300% in AI in 2017 alone.
Wearable health tech, like a Fitbit, is increasingly common. They help people monitor their general health, like heart rate, sleep quality and exercise regimes. More specialised wearable health devices, such as Withings Wireless Blood Pressure Monitor and the Rapael Smart Glove, help people with neurological and muscle injuries.
These smarter devices that can track a patient’s vital signs and bodily functions at home, and relay the information back to the doctor in real-time, lessen the need for patient-physician interaction. This saves hospitals, clinics and practices valuable time and money. CSS Insight predicts that wearable technology market will be worth $34 billion by 2020.
Virtual reality (VR) and augmented reality (AR)
Virtual reality and augmented reality can improve the medical teaching and learning experience. Medical students, for example, can enhance their skills with immersive practice scenarios. VR and AR experiences can also provide patients with physiotherapy support, almost like an exercise video, but far more realistic.
Patients may soon search and ﬁnd their nearest deﬁbrillator and emergency care units using AR-based apps. Surgeons will be able to prepare better for a difficult operation by enacting each step – which could reduce the time they spend in-theatre. Fast Company has estimated that VR and AR markets will soon be worth a combined $150 billion.
Internet of Things (IOT)
The potential of Internet of Things technology in healthcare is huge. For example, a smart inhaler or insulin tracker that is connected to hospital databases and patient management software can improve treatment. Plus, the patient can be reminded via a mobile app to take their medicine.
This means that patients who battle with mobility, or those who are managing a chronic condition, can monitor their health needs from home. This means doctors can tend their patients and still have time to focus on other areas such as research. Bain has predicted that by 2020, annual revenues for IoT vendors selling interconnected hardware, software and comprehensive solutions could exceed $470 billion.
3D printing costs are falling which makes it more accessible to healthcare providers. Breakthroughs include 3D-printed skin for burn victims, airway splints, live tissue with blood vessels, drugs, and various types of medical equipment.
3D printing can help – and save – lives affordably. The technology is also getting more and more sophisticated and, in fact, Gartner predicts that by 2019, 10% of people in the developed world will be living with 3D-printed items on or in their bodies. Frost & Sullivan predict that the 3D printing market in the healthcare sector will be worth $6 billion by 2025.
Keeping pace with digital innovations
New technologies have the potential to transform how healthcare is delivered for the better – and provide patients with a far better and more efficient service. However, it’s an expensive business keeping up with digital innovation and the healthcare industry is watching its spend. Leasing is an important financial solution that can help healthcare practices access these new technologies without breaking the bank.
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