Telemedicine firms have benefited from structural problems in Indonesia's healthcare sector and the country's booming digital economy over the last decade. The coronavirus crisis turns out to be a further boost for the sector, possibly fueling the creation of a unique digitally native medical system.
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Many telemedicine start-ups have emerged in Indonesia over the last years. Alodokter, Halodoc and GrabHealth are the most prominent and offer easily accessible digital consultations. Indonesians can even have medicines prescribed and delivered.
It is not weird that telemedicine services are particularly attractive in Indonesia. Emerging markets like Indonesia show more willingness to embrace digital solutions than developed markets. The country has a young and booming middle class massively using digital services such as e-commerce and fintech. In 2018, there were around 130 million active social media users and about 143.2 million internet users in Indonesia. High rates of mobile phone and computer usage are boosting investments and the expansion of the country's digital economy. Start-up companies like GoJek, a multi-service mobile transport application, are successful examples.
Also telehealth applications and innovations are benefiting from these important growth drivers. However, there are more variables at play explaining the growth of this sector. One of the most important reasons is the country’s lacking healthcare infrastructure. Indonesia has a shortage of hospitals and quality services, especially in remote areas. The country lacks proper healthcare coverage preventing millions of Indonesians receiving affordable and quality care. Furthermore, finding a good clinic or a specialized doctor has proven to be a burden for many. Wealthy Indonesians, for example, often look abroad when in need for a hospital. In 2015, around 600,000 Indonesians sought medical treatment abroad, up from 350,000 in 2006. The growth of a strong middle class and a digital economy has made Indonesians far more likely to look for other solutions if their usual healthcare options are not sufficient. Telehealth services are therefore an attractive addition to Indonesia's overworked healthcare infrastructure.
Despite Indonesia's huge potential, there are also problems implementing innovative solutions. Before the coronavirus, the telemedicine sector was lacking proper regulation. Business executives complained a legal umbrella is missing that protects both patients and service providers. Such regulation is required to build trust. Many Indonesians are still not familiar with the applications and think their doctor will be a fraud, a student, or a bot. The expectation is that a proper legal umbrella will bring patients and companies closer together.
The current crisis is now forcing the government to fast-track some of these developments which will likely boost confidence. To lessen the pressure on its healthcare infrastructure, the government asked people to use the telehealth companies giving them medical advice and contact with doctors through video, telephone or text. The Indonesian authorities are also closely working together with telehealth firms making sure the service is accessible to as many Indonesians as possible. On 14 April, President Jokowi praised telemedicine applications by calling them "hospital without walls". "This is what sets us apart from other countries. Not all people have to visit the doctor, a hospital or public health centres, but they can seek help through the telemedicine application", according to the Indonesian president.
Governmental support for the sector is widespread. The national virus taskforce announced on March 27 that it would add links on its website to 20 telehealth services in the country. The governmental entity is aiming to create a digital call centre to direct traffic. Such innovative solutions could lead to a proper telemedicine infrastructure even when the COVID-19 crisis is over. Also local governments have taken measures to boost digital solutions. The West Java government launched its own telehealth service to help its 49 million citizens get bookings for COVID-19 tests. Such incentives and increased usage of digital services offer an unique opportunity to build up trust between healthcare providers and patients.
The quick expansion of telehealth firms will help Indonesia and local authorities to curb the spread of the virus. Patients with minor symptoms are more likely to use such applications and still receive some level of care. Even if they can't be tested, since Indonesia's testing capacity is limited, doctors can assess the likelihood of infection by making people answer specific lists of questions. The taskforce, healthtech firms, and doctors are even working together to share some data on patients giving the authorities a better insight in how the virus is spreading over the country.
Indonesia was already before the coronavirus an attractive investment destination for healthtech firms. The current health crisis has boosted their development. Regulation is still needed to guarantee proper care if Indonesians make use of the service and to guarantee access to quality healthcare facilities if they really need it. A legal umbrella will also be needed to protect patient's data. Without regulation, confidence will always be a burden for the sector. Furthermore, more options are required for remote areas that lack proper internet access and healthcare facilities. Telemedicine services are still unable to reach many Indonesians because there are no pharmacies or clinics closeby.
In short, Indonesia's digital healthcare infrastructure is developing fast as a consequence of the coronavirus. The crisis offers an unique opportunity for telemedicine firms to boost confidence among Indonesians and to become an integral part of Indonesia's healthcare culture.
Alodokter raised $33m USD in funding last October. With 20.000 doctors and 1000 healthcare facilities it served 20 million active users before the corona crisis with its telehealth service. Those numbers have skyrocketed over the last months. The company saw a record of 32 million website visitors in March alone and over 500,000 free coronavirus consultations.
Halodoc had 12 million monthly users before the coronavirus crisis. Besides consultations, the application offers home lab services and medicine delivery in 50 Indonesian cities through partnerships with pharmacies, laboratories and ride-hailer Gojek. It has 21000 doctors and 1000 pharmacies in its network. About 80% of its clients are based outside Jakarta and Surabaya.
GrabHealth is a joint venture between the Singapore-based ride-hailer Grab and Ping An Good Doctor, from China's Ping An Healthcare and Technology Co Ltd. The application can be accessed in Greater Jakarta, Bandung, Cirebon, Sukabumi, Yogyakarta, Solo, Semarang, Surabaya, Malang, Sidoarjo, Bali (Denpasar), Medan, Palembang, Balikpapan, Samarinda, Makassar and Manado. The company is registered in Indonesia as Good Doctor Technology and offers 24/7 free consultation on corona. In a statement the company said daily consultations had nearly doubled to 10000.
Tjeerd S. Ritmeester
This article is an Emerging Market Experts (EMEx) production. For more information about Indonesia's healthcare sector and business solutions, please take a look at our services or contact us.
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