Digital platforms and big data-driven sustainable innovation in smart healthcare investments

Morea, D.

;Moro Visconti, R.;Mazzitelli, A.

2020-01-01

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Abstract

Latest Organisation for Economic Co-operation and Development (OECD) figures show that health spending grew by less than 2% in 2017 with provisional estimates pointing to around 2.5% growth in 2018. OECD spending on health as a share of Gross Domestic Product (GDP) remained at around 8.8% on average in 2017, according to OECD Health Statistics 2019, updated in November 2019. This is due to factors like ageing population and faces public budget constraints that force countries to find out innovative solutions. Sustainable technological advances are so essential to make infrastructural healthcare investments “smart”. Healthcare is a core pillar of the socio-economic ecosystem, and it can strongly benefit from digital investments. Digital healthcare solutions, such as software or internet-connected devices created for detection or treatment of medical indications, are creating a digital disruption in healthcare. New research indicates that digital health solutions will save the American healthcare system more than $100 billion over the next four years. Technological innovation can strongly benefit from the alliance between public and private partners: while the former provides (in most developed countries) universal healthcare coverage, the latter are an indispensable partner for their skills and expertise. Remuneration of private engagement may conveniently follow pay-for-performance patterns and investments are increasingly patient centric. Digitalization is a key factor, since it can transform, for many chronical diseases, in-patients into out-patients and eventually home-patients, with strong economic savings and meaningful life quality improvements. Digitalization is a main driver of m-health or e-health strategies. M-health is most commonly used in reference to using mobile communication devices, such as mobile phones, tablet computers and PDAs, and wearable devices such as smart watches, for health services, information, and data collection. Public authorities can choose between several options when they want to build new hospitals, ranging from Traditional Procurement to Public-Private Partnerships typically backed by Project Finance schemes. Within this evolutionary framework, this paper examines with an interdisciplinary approach which is the possible impact of digitalization on healthcare infrastructural investment. A primary input factor is represented by big data (often ignited by Internet of Things wearables) that can be collected in real-time, stored in cloud, and eventually processed with artificial intelligence (machine learning) paradigms, fueling interoperable databases and easing the safe exchange of sensitive information with blockchain applications. In this synergistic process, digitalization works as a catalyzer that eases cooperation among different stakeholders. To the extent that the primary stakeholders (the public player, private investors with their sponsoring banks, patients, etc.) cooperate using digital platforms as an exchanging interface, they can co-create additional value that can soften the aforementioned public budget constraints. Additional value for money is a by-product of this virtuous cycle and it can be conveniently apportioned among the stakeholders. Check-and-balance factors can prevent excessive private rents, for instance through increased competition. A win-win strategic model may so be designed around a patient-centric and public vision. This comprehensive evolutionary vision has seldom been treated in the current literature. In particular, healthcare supply chain bottlenecks have hardly been considered with a technological approach that takes into account also the socio-economic implications. This paper proposes some feasible solutions for overcoming some of these criticalities, fostering resilience and long-term sustainability. A case study, generalized from a real sample of healthcare infrastructural investments, will show how a typical Project Finance business model (for the construction and management of a new hospital) can react to the introduction of digitalization and big data. A sensitivity analysis will show which are the potential economic and financial gains, in terms of improved marginality. A further analysis will concern evolutionary trends that may be considered with stochastic modeling that incorporate real-time big data to re-engineer the business plan. The study will also consider the interaction between supply and value chain when the healthcare model “goes digital”. The paper will analyze in its discussion section some trendy research streams that can ignite future investigation, concerning, for instance, digital B2B/B2C interactions among the players that share a common 24/7 marketplace. Further research avenues will be synthetically recalled in the discussion, concerning, for instance, cyber-security challenges. To the authors’ best knowledge, there are no comprehensive studies that analyze the research question of this paper. The research is innovative, and it might shed some light both on the traditional stakeholder relationships, re-engineered around digital platforms, and on the specific healthcare sector, looking for patient-centered satisfaction and sustainability.