13years on the global market
14portfolio companies across North America, CIS countries, and the Middle East
Is Russian telemedicine worth investing?
Originally published at https://vc.ru/finance/74848-stoit-li-investirovat-v-rossiyskuyu-telemedicinu.
The vibrant telemedicine market has been recently growing by 15-17% on average per year.
According to Global Market Insights, in 2018 the global telemedicine market share was approaching a record high of $40 bn. The same source foresees that by 2025 the global digital medicine will exceed $130 bn. growing at 19.2% CAGR.
The report of Global Market Insights forecasts that the US telemedicine will grow from $19 bn. in 2018 to $64 bn. in 2025, staying the world leader in telehealth.
Interestingly enough, it is not US patients who are the world’s main e-health consumers. In May – June 2018, Ipsos conducted a “Global Views On Healthcare – 2018” survey with over 20,000 adults aged from 16 to 64 across 28 countries. The research revealed the highest usage of telemedicine among the citizens of … Saudi Arabia. It is followed by China and India, which is understandable. Indeed, e-medicine has good chances of success in two most densely populated countries on the planet with quite large territories. But why did Saudi Arabia take the lead in telehealth usage?
The fact is that back in the 1960s, concerned with the quality of national medicine, the country began to invest into its healthcare development. Over the past six decades, the country’s level of primary medical care has increased, some hospitals have been privatized, new well-equipped medical centers have been created, and most importantly, the national medicine has been digitized. A 2018 study of the Boston Consulting Group claims that these measures enabled the Saudis to increase their life expectancy by more than 25 years (up to 74 years), which is three years more than life span in Russia.
Zamwell believes, over the next few years Russian telemedicine will keep pace with the global one, or even outrun it. Some studies foresee that by 2022 up to 25% of the country's population will use telehealth services.
Over the past 3-5 years, new promising players entered the Russian telehealth market, including marketplaces, online clinics, and telehealth software developers. According to SPARK-Interfax, in 2015-2017, the revenue of the largest online clinics and services DOC +, MMT, and Doctor Ryadom doubled annually.
Overall, Russia has a rich soil where telemedicine could flourish. First, the country still has a disappointingly high rate of chronic diseases. Is it convenient for chronically ill patients – especially in rural areas – to consult health specialists remotely. Today, the Russian law forbids diagnosing patients via remote examination, but allows to monitor the treatment of a diagnosed disease.
Second, the Russian legislators are now building a legal framework of e-medicine. In 2017, Federal Law 242-FZ and the order of the Ministry of Health 965n dd 30.11.2017 made legal online consultations by medical staff, but allowed to make a diagnosis only at examinations in clinics. The order of the Ministry of Healthcare 4n dd January 14, 2019 allowed doctors to issue electronic prescriptions. Recently, the Ministry has made a draft order that makes legal electronic prescriptions for drug-containing medicine. The draft is now on the stage of public discussion.
Third, special doctors, unlike general practitioners, can usually be reached at regional or national health centers. Considering Russia’s geography and infrastructure issues, the residents of remote and rural areas can find telehealth extremely useful.
On the other hand, last year statistics of Doctor Ryadom clinic shows that most patient calls were addressed to general practitioners, and a quarter of all calls to pediatricians. Which makes sense considering little patients need attention 24/7.
So is it worth investing in Russian telemedicine? So far, it is. The legal framework for telehealth is slowly but surely improving. E-medicine technologies will inevitably reach every remote village in the country. And the double-digits of telemedicine CAGR promise it a big future in Russia.