Health IT Rises to the COVID-19 Challenge
The value of time has rarely been demonstrated at this magnitude in global healthcare, and in specific health IT, as it has during the ongoing COVID-19 pandemic. The world — particularly Europe — was caught unprepared. Time is everything during a pandemic and digital tools have immense potential to help win all-precious time.
Digital tools can provide actionable insights to help health organizations buy time to prevent what is preventable and prepare for what is imminent. Health IT departments are deploying solutions to rapidly set up additional care capabilities, while ensuring process and operations continuity and safety.
The scientific community still has insufficient evidence on the nature of the SARS-CoV-2 virus and its impact, so it’s crucial for global healthcare organizations to explore the lessons learned from early experiences of COVID-19. IDC has just published a study on this. Analyzing all the experiences, it’s clear that the role of health ICT is to enable a sense-predict-respond ecosystem.
Looking at two main settings, public health and hospitals, we analyzed how solutions have been deployed and the key challenges encountered.
Public Health and Population Health Management
Timely and accurate collection, sharing, and analysis of high-quality data are key for epidemic preparedness and management strategies. Platforms making data available to Big Data analytics and artificial intelligence tools can help public health bodies:
- Identify early signals of the outbreak
- Detect and forecast COVID-19 spread patterns
- Evaluate and optimize strategies to control the spread of the epidemic
Healthcare systems are also relying on technology to support strategies and initiatives aimed at empowering citizens to cope with the emergency.
- Teleconsultation and remote health services are encouraged to avoid unnecessary visits to medical facilities. Chatbots, dedicated phone lines, and telehealth services help provide access to medical advice. But this approach may hinder the elderly and the poor from accessing care, worsening already existing health inequalities.
- The fight against COVID-19 misinformation is seeing the creation of dedicated taskforces. Health authorities are partnering with global technology and social media players to stop the dissemination of fake news and to provide accurate and authoritative health information.
- Contact tracing and social distancing measures are supported by a range of technologies, including AI-enabled mobile apps as well as facial recognition, drones, and intelligent video surveillance. This approach faces data privacy regulation and discrimination challenges. Current experiences suggest that when securely orchestrating different levels of data aggregation, healthcare systems can:
- Enhance their contagion analysis and forecast capabilities
- Help citizens to manage personal risk
Hospital Surge and Respond Capabilities
The outbreak of COVID-19 is putting hospitals under unbearable pressure. The distressing situation described by staff in Bergamo, Italy, or the ever-shrinking numbers of available ICU beds in London, Paris, and Madrid are just the most glaring examples of the magnitude of COVID-19’s impact on hospitals. The WHO has listed a checklist of six key actions to support hospitals. On these points, health IT is showing it can play a crucial role in helping healthcare facilities to ensure:
- Continuity of essential services, which relies on healthcare organizations’ ability to reduce failure risks while building an emergency management function. Here, automation, IT infrastructure redundancy, and IT resources availability are key for success.
- Well-coordinated implementation of priority action, hard to run without virtual collaboration tools to organize shift, responsibilities, and handovers in a flexible way.
- Clear and accurate internal and external communication, key to ensure the enablement of a chain of command. This enables healthcare facilities to clarify priorities, department organization, and personnel allocation. At the same time it enables them to keep patients, caregivers, and the wider public properly informed and connected.
- Swift adaptation to increased demands, needed to deal with the complexity of configuring new hospitals and wards to face the emergency. This is made possible through a range of innovative actions such as repurposing and augmenting existing information systems, to leveraging new technologies such as 3D printing to address supply chain shortages.
- Effective use of scarce resources, such as AI-powered clinical decision support tools for healthcare staff that can help identify high-risk patients and expedite early identification of cases.
- A safe environment for health workers also means more remote and digital healthcare services. But remote triaging, telemedicine, and collaboration platforms require infrastructure and connectivity preparedness and healthcare workers’ digital literacy and flexibility to adapt to a fast-paced changing IT scenario.
The story does not end here.
If you want to know more about examples, best practices, and essential guidance, please check out our full report or contact us.
The IDC Health Insights team will continue to work on the role of health IT in the changing scenario of COVID-19. Please contact Silvia Piai, Nino Giguashvili, or Adriana Allocato for more information or to share your views with us.
How Is COVID-19 Impacting the Insurance Industry?
As the COVID-19 situation unfolds, governments around the world have a responsibility to look after their people, and most are doing exactly that with the resources they have at hand. Apart from government bodies and healthcare establishments, in unforeseen circumstances such as this involving loss of lives or jobs and the collapse of entire businesses, people are also looking to insurance organisations for support.
At heart, the industry must be an enabling and uplifting force for its customers during their most vulnerable financial situations.
Insurance is a centuries-old business which has witnessed many global pandemics. Over the years, the likes of the Spanish Flu in 1918 (which, by the way, wasn’t Spanish at all!) and the more recent Ebola outbreak have taught insurers enough to be prepared. Insurers constantly factor such risks into their models and analyse potential implications. They employ dedicated catastrophe response (CAT) teams such as those for natural disasters.
But it’s not as simple as it sounds. COVID-19 is an unprecedented situation that is putting tremendous pressure on even the world’s richest and most powerful nations and their healthcare systems.
Remember: no one saw this coming or was prepared to scale up to the unique demands of current circumstances.
For life insurers, broader financial adversity due to outbreak-led business interruption and stock market crashes can impact earnings from investment portfolios. But early signs point to claims losses being manageable in proportion to natural disasters.
The effect in the general insurance and non-life sector is broad and touches multiple lines of business. These can be travel, commercial property policies (including business insurance and business interruption coverage), director and officers (D&O) liability policies, and health insurance.
How Are Insurance Organisations Responding?
As with nations, how insurers respond to customer needs in this crisis depends greatly on their operational and technology preparedness. We expect that a number of inefficiencies in technology, systems and processes will be exposed as insurers handle huge volumes of customer enquiries and claims. Most insurers, for example, have already issued warnings to customers about service disruption and long contact centre wait times due to having fewer staff.
Insurance organisations around the world have been warming to the idea of flexible working models to meet the demands of a millennial workforce, but many are in the very early stages. The COVID-19 crisis will put insurer organisations’ remote work capabilities to a tremendous test as a result.
Matters of Technology
We believe insurers that offer proactive and empathetic customer engagement will manage the crisis better and retain customers when the tide turns. This includes:
- Coverage applicability and health and safety advice
- Round-the-clock availability across human and virtual channels
- Predictive claims capabilities and automated payouts powered by data and analytics
- Frictionless claims through smart systems and processes
- An agile, smart workforce enabled by technology
Digital platforms that enable the collaboration of diverse stakeholders (insurers, emergency services, hospitals, employers, mental health consultants, etc.) to work together and help customers in their desperate times are important too.
A good example of technology’s role has already been demonstrated by Ping An Insurance in China. Its technology expertise has helped it to deal with the crisis more effectively and to support some other banks and insurers too. The technology enabled Ping An to get its customers, employees and agents to work online from the early days of the outbreak.
Matters of Transparency and Trust
If you browse through the websites of some insurance carriers and industry bodies, there is ample advice and information to policy holders on the coronavirus and how it affects their coverage. While many promise support and assistance to customers in their time of need, this comes with huge caveats — at least for now.
Over the years, insurance carriers have added multiple exclusions or have charged additional fees to offset exclusions for pandemics and similar events.
Customers, naturally, will ask what is the point of insurance policies if they don’t cover unforeseen circumstances. In the future, how can I trust that I am covered adequately for my financial risks? Why do I pay the same premium when the risk exposure in a lockdown is low (e.g., car insurance where the car is not being used for work or leisure)?
So, where does the problem then lie: with insurers or customers?
To be fair, on the insurer’s part, the pandemic has so far been one of a kind and no business could have adequately prepared itself or its customers. We should also remember that insurance is a business that must take care of its solvency and commercial viability amid great regulatory pressures and uncertainties — and policy provisions and exclusions are tools towards this.
From a customer’s point of view, though, this raises serious questions about transparency and trust. Of course, businesses or corporates have a responsibility to understand their specific risks and losses, cover these accordingly through insurance and understand the nuances of their contracts. But it’s also the responsibility of insurance providers to be as transparent as possible.
Insurers already have a bad reputation for complex communications, be it the “legalese” of policy documents or the level of transparency with respect to disclosures. A global crisis such as COVID-19 will exacerbate this.
It’s a real possibility that trust in financial institutions such as insurers could hit an all-time low following the outbreak. Now is the time to focus on what is not covered than what is covered. You can’t blame policyholders if they become more wary than ever in a post–COVID-19 world when it comes to purchasing or renewing insurance.
What Should Insurers Focus on Post–COVID-19?
Though denial of coverage due to exclusions will frustrate a lot of business/corporate customers, we believe that the pandemic will lead to huge demand for more comprehensive business insurance/business interruption cover. Customers will expect such insurance policies to address the many gaps revealed during the crisis. Insurers must capitalise on the opportunities and up their investments in innovative products and services.
Another focus area will be digital transformation (DX). Most insurers that have pursued DX are stuck in a deadlock, and this will have a negative impact on their current response to the crisis. As and when the COVID-19 crisis eases, insurers must prioritise measures to break the deadlock and accelerate their DX efforts in collaboration with the right technology partners. These efforts will give them the platform, technology and skills to face future crises.
Lastly, post–COVID-19, contextual and clear communication should be the norm. Insurers must be more transparent than ever in their coverage and communication and reinforce trust in the idea of true, hassle-free financial protection at the time of need.
COVID-19: Developing Digital Strategies with “Bottom-Line Obsession”
The impact of COVID-19 will be felt in European business for some time. This pandemic has created unprecedented turmoil in the economy at a time when authorities in the region have limited financial firepower to ease its negative consequences. The deadly combination of a large amount of outstanding debt and interest rates close to zero is limiting the capacity of monetary policy to stimulate growth. The impact is an accentuated downward trend of European GDP growth. In the last quarter, the economy grew only 0.1% — the weakest growth since 2013 — and the rest of 2020 looks increasingly concerning. IDC believes that this situation will force European organizations to develop their digital strategies with “bottom-line obsession”.
Figure1: European GDP Growth
COVID-19 Has a Minor Impact on Digital Investments
Moving forward, technology will play a critical role in the recovery of the European economy. As the pandemic has highlighted the potential of digital to multiply our productivity with automation, intelligence, and connectivity. Therefore, regardless of the imminent economic downturn in Europe, organizations in the region will continue to invest in their digital initiatives — but the pressure on financial outcomes will increase.
IDC’s research shows that the growth of spend on digital technologies will be a third of our pre-corona–crisis forecast (Dec 2019), but the recovery will be fast, since the increase of spend on cloud, 5G, and collaborative tools will make up for the decrease in investment in other digital technologies.
Figure2: European Enterprise Spend on Digital Technologies
Bottom-line Obsession: Every Single Dollar Counts!
The imminent economic downturn in Europe has only a slight impact of the nominal spend on digital technologies, but it is sending a clear message to business leaders: the era of digital experimentation is over. What comes next? The Era of the Bottom-line Obsession. It is time to bring financial discipline to digital initiatives!
Over the past decade European firms have invested billions on pilot projects to test the potential of digital technologies. However, the majority of these projects never scaled because they were created in isolation, with little or no coordination with the broader organization. The outcome is a massive waste of resources. In 2019 alone, companies in the region invested $256 billion on digital initiatives, but only 26% of those organizations delivered ROI from digital investments. Nonetheless, the economic downturn is refocusing digital strategies in the region towards the delivery of profit growth.
The Ultimate Balancing Act: Profit & Risk
Profit is of utmost importance, but even in the era of bottom-line obsession, profit growth isn’t the only metric that matters. The coronavirus pandemic has showcased the weakness of global value chains. The just-in-time approach that business schools swore by in the 90s enables cost efficiencies but is not fit for the new normal. When global pandemics, trade wars, political upheaval and climate changes become the norm, just-in-time practices leave organizations unprotected against sudden shocks and supply shortages – unless they can adapt in real-time to these conditions.
Covid-19 has a tangible impact on production in European organizations due to a lack of flexibility of their logistic processes. Manual processes have stopped most companies in the region from shifting suppliers and order volumes when COVID appeared on the horizon. The manual nature of inventory management also impairs end-to-end visibility along the value chain, obstructing business leaders from reacting to threads beyond the first tier of suppliers.
IDC believes that value chain digitization will become a top priority for European organizations. The confluence of IoT, Cloud, 5G, AI and RPA has the potential to optimize the whole process from raw material to product/service delivery, in order to reduce cost and risk along the value chain.
The Key to Success in Times of Uncertainty – Unwavering focus on Business Outcomes
The era of digital experimentation has given us some valuable lessons, but big question marks on the business value delivered by digital initiatives. If you are a digital leader, your sphere of influence will potentially grow in 2020 and beyond, but the new normal requires a new mindset. In case you are still wondering which areas of your business are ideal for adoption of disruptive technologies, we invite you to start asking different questions to uncover the potential value that digital initiatives can deliver around three critical areas: profit, risk, and time to market.
The figure below shows that only a few organizations in Europe have generated value across profit, risk and time to market.
Figure 3: Limited Delivery of Business Value across Profit, Risk and Time to Market linked to Digital Transformation
Source: IDC Digital Executive Sentiment Survey, 2019 N=379
Source: IDC EMEA, Multicloud Survey, Multiclient, August 2019 N=664
IDC recommends that organizations ensure that every new digital use case that is being discussed in these uncertain times has the potential to deliver on at least one of these business metrics in a significant fashion by the end of 2020.
Conclusion
As Covid-19 fundamentally shakes up how we live, learn, socialize and work, governments across Europe are taking drastic measures to keep citizens safe and healthy. IDC believes that the response of organizations in these uncertain times will shape the market perception of their brand in the next 10 years. Therefore, Corona-Kindness has emerged as a theme in the European enterprise context, as many firms are proactively looking for innovative ways to help their customers in this situation. IDC believes that organizations will have to redefine value at three levels:
- Financial Value: As highlighted earlier – the bottom-line obsession for organizations linked to digital investments will become the new normal in this time of crisis. By the end of 2020, there will be a requirement to deliver top-line and bottom-line performance in line with market expectations. CEOs will continue to be measured at this level, regardless of the current circumstances.
- Ecosystem Value: Relevance (and performance) in the digital era is not just about capitalizing on unique core competencies. It is also about linking with key partners, suppliers, emerging start-ups and even competitors in the ecosystem to get to scale.
- Societal: It is becoming clearer that it is not just about doing well (i.e., financially) as an organization but also doing good. Examples of Corona-Kindness leveraging technology are proliferating the industry. And this is a fantastic development. But it goes beyond COVID-19. It needs to become part of environmental, social impact and broader sustainability discussions to deliver the required effect over the longer term.
Delivering business value at these three levels will only be possible for organizations that leverage the power of technology to maximize productivity, drive collaboration with the ecosystem and share resources with the community. Hence, IDC believes that Digital Transformation initiatives will accelerate post COVID-19 as the new normal will increasingly be ‘Tech Everywhere’.
COVID-19 and its Impact on the Banking Industry
European central banks have little ammunition with which to deal with the COVID-19 pandemic. Governments will soon be forced to balance the health of their citizens with economic stability and their own debt.
After more than a decade of unprecedented economic growth, the world is facing another global economic recession. Since the 2008 crisis, governments have had time to accumulate enough wealth to prepare for the next crisis.
But to keep the economy going, most European governments and central banks have largely exhausted their toolsets (quantitative easing and low to negative interest rates).
According to ECB data, only three EU member states (Germany, the Netherlands and Malta) have better debt-to-GDP ratios than before the 2008 crisis. The ability of some countries to dash out massive aid programmes is limited at best and will quickly spur new debates about mutualising debt in the European Union.
Government Aid Packages Are a Risky Call
In the past two weeks, European governments have been introducing aid programmes to ease the economic pressure brought about by the COVID-19 outbreak and the inevitable economic downturn that will follow.
The size of those programmes is astronomic. Germany plans an €822 billion economic aid package — amounting to 26% of annual German GDP — and says it will make more available if needed.
The UK Treasury introduced a £330 billion package — 15% of annual GDP. The Czech Republic plans to guarantee loans to business to the tune of 19% of GDP.
But the aid bridges only a limited and unknown period. Governments are making a risky call. If the pandemic triggers a full-blown recession causing widespread defaults, mass unemployment and severe loss of life, the relief and stimulus funds could fail to revitalise the economy and even larger amounts will be needed.
This could pave the way for the next sovereign debt crisis given the prevalence of debt-financed government responses in Europe.
Impact on the Banking Sector
Though banks are not being hit by the novel coronavirus as directly as other retail institutions, they are at the forefront of public attention.
Banks sit at the heart of the economy and provide funding to corporates and individuals. Their stability is crucial to keep the system up and running.
Tens of thousands of consumers are now being placed under quarantine or lockdown. As a result, they might lose their ability to pay for credit, particularly mortgages.
Also, business loans, especially to small and medium enterprises, are at risk due to the forced shutdown. But entire industries such as travel and F&B will be hard hit, as they will have no way to make up for the lost revenues in the future.
Other industries, such as manufacturing and retail, will suffer now but may see increased activity once things go back to normal.
How Banks Should Respond
Banks have already started waiving fees, increasing credit card limits, and granting mortgage payment holidays and access to fixed saving accounts to those impacted by the virus.
At this difficult time, it’s important to make the impacted clients feel that a bank has their back and to offer payment holidays or short-term cash-flow support. This is clearly also in their own interest, but this is only a temporary fix.
Generally, banks should not have a problem with liquidity and offering clients a mortgage payment holiday due to record low interest rates. But they should be reassessing the risk profiles of their customers and particularly reclassifying borrowers impacted by the coronavirus as high risk.
If the COVID-19 crisis lasts longer than one or two months, this option will increasingly become untenable. Of course, unless the state steps in and forces a moratorium on debt or lends directly to the customer, banks themselves will begin to struggle.
For example, interest rate payments are essential income for banks. Without it, banks will see liquidity shortages themselves, at a time where the cost of loans is going up due to the lack of liquidity in the interbank market.
Cybersecurity and Fraud Risk
A considerable concern is the rise in cyberattacks and fraud, as consumers, businesses and employees adapt to this new environment. Crisis and rapid change always create an opportunity for bad actors, and COVID-19 will be no different.
Banks must be aware of new types of attacks and fraud, particularly as more staff work from home and therefore open new threat vectors. The risk of vital team members being sick or unavailable or less efficient because they are working from home will become a challenge.
Some regulators, such as the Monetary Authority of Singapore, have already mandated split team arrangements. This means that different teams split so that if an infection cluster appears in one, the business unit can still carry on operating.
For FinTech, the Future Is Contactless
Despite the negative outlook, economic uncertainty creates opportunities for new business models powered by emerging technology. Firms built on solid ground will win clients and the best talent from those that won’t adapt.
In the coming years, consumers will fear infection. This will accelerate the switch to a cashless society and the adoption of alternative integrated payment features powered by mobile wallets.
Personal mobile devices will become a user’s central operating device, enabling payments to peers and to businesses. Consumers will use mobile devices to operate ATMs and terminals remotely without touching the screen. Technology providers should be focusing on alternative authentication methods through biometrics.
The War with Coronavirus Might Drive Technological Advancement
Some European countries are now in a state of emergency that would usually only be introduced during wartime. Fighting the novel coronavirus is a war as well.
Despite the tragic losses that a war usually brings, a war always drives technological advancement. In 10 years’ time we will look at the pandemic as a trigger that enabled us to spend our time more efficiently and to focus more on activities that matter.
The advancements in digital technology are making the crisis more bearable and are enabling businesses to keep working with access to key services (communication, payments, credit, collaboration, etc.), while enabling social distancing and helping to fight COVID-19. We expect digital technology to experience another boost during and after the crisis.
At the same time, consumer adoption will increase, given the lack of other options at the moment, and this will enhance familiarity. COVID-19 could stay with us for months (even years) and it’s unlikely to be the only pandemic in the future.
Every few years the world sees new outbreaks of infections (SARS, H1N1, Ebola, Zika, etc.), but the global impact of COVID-19 could lead us to rethink how we prepare for such disasters. Digital technology and the cloud will play a vital role.
IDC is closely monitoring the impact of COVID-19 on the ICT industry. Over the next few weeks, IDC Financial Insights will be publishing more reports, so please check out our global and regional programmes.