A look at how Smart Healthcare provides business opportunities in Taiwan
Human beings are in pursuit of a healthy living and a longer life expectancy everlastingly. As the world’s population has been increasing and the proportion of older people has grown, how to use a variety of smart technologies to improve the health care environment and convenience has become a major issue in many countries around the world. In the 21st century, the healthcare sector is regarded as one of the most promising applications in the electronics industry.
According to Deloitte’s 2018 Global Health Care Outlook report, the global health care spending is predicted to grow at an annual rate of 4.1% between 2017 and 2021, up from 1.3% between 2012 and 2016. The report indicates that combined health care spending in the world’s major regions is expected to reach US$8.7 trillion by 2020, up from US$7 trillion in 2015.
Geographically, Asia and Australasia are the fastest-growing regions in terms of the health care spending that is expected to increase from US$1,531.5 billion in 2015 to US$1,964.9 billion in 2020, with a growth rate of 5%. The growth rate in North America, Western Europe, Middle East and Africa regions are projected to surpass 4% between 2015 and 2020.
The report indicates that aging and increasing populations, developing market expansion, advances in medical treatments, and rising labor costs are major factors to drive spending growth. The growing number of people aged over 65 due to the declining birth rate and increasing life expectancy has become a great challenge for global government’s health care systems, especially to developed countries.
Life expectancy is estimated to increase from 73 to 74.1 years between 2016 and 2021, bringing the number of people aged over 65 to more than 656 million, or 11.5% of the total population. The percentage of Taiwan’s older population is above the world average. Based on the statistics from the Ministry of the Interior, the proportion of the elderly population aged 65 and over was 14.18% in June 2018, and life expectancy in Taiwan reached 80 years in 2016.
The increase in aging population presents more demands for health care systems. With rising consumer awareness and standard of living, the “smart” health care systems should take user convenience and quality improvement into consideration.
According to Deloitte’s report, the smart health care should have features as following,
Advanced electronics technology and a variety of digital solutions are at the core of smart healthcare. Nowadays, some medical devices like blood glucose machine, ECG, blood pressure monitor, pulse oximeter and other connected healthcare monitoring systems are integrated with Internet of Things (IoT) functionality and applied to the homecare application. Healthcare personnel can use those connected devices for physiological monitoring on chronic patients and solitary elderly in real time. Besides, there are more and more new wearables like smart band and watch to be used as mobile healthcare devices for sleeping or heart rate monitoring. The mobile gadgets could utilize big data analysis on the cloud to provide personalized healthcare information to users.
According to the forecast of an US-based research firm Grand View Research, the global smart medical device is expected to reach US$24.46 billion by 2025 from US$3.58 billion in 2016, growing at a CAGR of 24%.
The medical market was considered to be closed and conservative to nontraditional players like technology companies. The electronics companies who specialize in 3C applications show interests in the field, but they are not familiar with process validation and related regulations which are essential parts of medical device manufacturing. The aforementioned prevent the new companies from easily entering this business area. They find it difficult to enter this industry and have more hesitant attitudes. When the smart technology is introduced into the medical device market, it opens the door for the electronics practitioners.
High barriers to Entry?
Dr. Shuenn-Yuh Lee (李順裕), Professor at Department of Electrical Engineering, National Cheng Kung University (NCKU) said that it is not so difficult for the electronics companies to develop healthcare products. He pointed out the key factor to hinder the development—the stakeholders of the two areas don’t have full understandings of each other. Consequently, he has established Guardian Patch Alliance (健康貼身守護神小聯盟) under the Ministry of Science and Technology (MOST) program. It combines the resources of the Department of Electrical Engineering, Industrial Design, College of Medicine of National Cheng Kung University, aiming to bridge electronics and medical industry players. Also, the alliance assists research teams and new startups to enter the healthcare field.
In 2002, Professor Li established the Communication and Biologic Integrated Circuit Laboratory (CBIC Lab) in the Department of Electrical Engineering. The lab has been dedicated to the design of medical electronic chip that integrates analog/mixed-signal and radio frequency (RF), physiological signal detection and proprietary algorithms. The SoC is called wireless ECG acquisition system (Guardian Patch), and the applied systems are currently undergoing clinical trials. The prototype chip has been developed, and a number of patents have been granted.
The “Guardian Patch Alliance” aims to promote the idea and concept of the lab. Currently, the alliance wants to aggregate electronics and medical industry players as well as makers to join the alliance. The cooperation and resource sharing among diverse groups are helpful to drive innovation and new product development as well as growth momentum in the Taiwan IT industry. The Lab has created a number of innovative products, such as ECG-monitoring smart clothing, driver drowsiness detection system, and Trianswer Smart Block which is a development module for wearable products.
Professor Li pointed out that Taiwan is seen as Asia Silicon Valley for its complete semiconductor industry supply chain coupled with a large number of experienced electronics branding companies. Also, there is well-developed local medical system along with lots of top medical professionals. The Guardian Patch Alliance acts as a platform, and bridges the two elite groups that have little chance to cooperate with each other. He insists, “At present, Taiwanese medical electronic devices companies still focus on OEM and ODM businesses. If the device manufacturers work with the electronics companies to learn their technical and marketing expertise and experiences, they are possibly to create their own brands.”
However, medical electronics devices like automotive components are severely monitored by global government authorities. The products must comply with relevant regulations and pass stringent product safety verification process before product rollout or being allowed to be used for clinical use. In Taiwan, the medical electronics devices are administered by the Food and Drug Administration, Ministry of Health and Welfare. The complicated medical device-related regulations make up the barriers for the electronics industry players to enter into a market.
Professor Li indicated that, in the case of wearable medical devices, there are two basic safety certification standards to pass. One is IEC 60601-1 that applies to safety and essential performance of medical electrical equipment and systems for use in the home healthcare environment. In the United States and European Union, there are additional individual regulations in accordance with this standard. The other is the ISO series of standards, including ISO 13485—a quality management system of medical devices and ISO 14971—application of risk management to medical devices. As the consumer electronics industry, these certification bodies have professional test labs, and provide consulting or inspection services.
To pass the product electrical safety test or ISO quality management system might not be so difficult. It’s not brain surgery. However, the clinical trial of medical devices could be a great headache. Taiwan’s medical devices mainly comply with the United States Food and Drug Administration (FDA) regulations, which comprise low, medium and high risk levels. The products that meet medium and high risk level need to get approvals regarding efficacy and safety before they can be sold. If the products were already approved by the U.S. FDA and EU and to be sold outside the two regions, the products’ clinical trial data is applicable to inspection.
Tough challenges in Taiwan Healthcare Electronics Industry
Established in 2017, a startup company Taiwan Main Orthopaedics Biotechnology developed smart surgical glasses that feature Mixed Reality (MR) and machine learning technologies. When a doctor wears the smart glasses during an operation, he can see scanned medical images projected on the human body to find the position of the organ precisely to ensure accurate surgery. It’s very useful for the high-risk orthopedic surgery on spine correction.
The company participated in the CES 2018 with the Ministry of Science and Technology. It stole the show with its extraordinary smart surgical glasses and attracted the USC School of Medicine that actively asked the company for clinical cooperation. It takes five years from conceptual design phase, production of finished products, to undergoing clinical trial in an operation. The glasses will be approved to sell this year. The founder and CEO Min-Liang Wang said the company was going through a tough time over the past few years.
NeuroSky, founded in 2004 in Silicon Valley by a Taiwanese team, specializes in Electrocardiogram (ECG) and Electroencephalography (EEG) sensor technology. The company’s EEG solution can accurately measures brainwave signals and monitor brain activities through biomedical signal processing and algorithms like monitoring the attention levels of individuals. The product can be used in education and entertainment, available with an app.
Taiwan’s population is aging at an alarming rate. The demand for long-term care has been increasing drastically. Taiwan healthcare device providers are ready for this booming market; however, they’ve got a long way to go to pass the strict medical regulations.
There is a legal grey area for many Taiwanese medical electronics device companies, especially for the startups who would like to make a fortune by making high-end medical electronics products. Founded in 2016, MicroMED specializes in biomedical micro-electro-mechanical System (MEMS) technology. The company developed an implantable drug delivery system which can be used to inject targeted drugs for cancer treatment. However, it requires a large amount of money for testing and passing related medical regulations. To survive in the market, the company found the animal testing market that needs implantable drug delivery devices before the drugs are approved for sale.
The PCs and smartphones play a leading role in the IT industry. However, those industries enter the mature period and the markets are in a slowdown. Taiwanese electronics companies are seeking the next “killer application”. The car electronics and electric vehicle markets are among the most popular applications in these two years. Though there are not so many global leading car makers in Taiwan that can provide business opportunities for local car electronics vendors. Quite a few Taiwanese companies have made their mark in the car electronics field with their long-term efforts.
The healthcare applications are believed to be a new emerging market segment with high growth potential to Taiwanese electronics companies. The healthcare industry in Taiwan is booming because of the implementation of National Health Insurance. High demand for healthcare related resources might also drive the industry growth. With closer cooperation among technology companies and medical industry players, there will be a high possibility to establish an unrivaled healthcare industry ecosystem. To foster the industry development, it’s important facilitate regulatory compliance and simplify certification processes. Furthermore, it’s crucial to boost cooperation and share resources among industries, governments and academia to develop global leading brands and to create an ideal environment to deploy smart healthcare solutions and services.