The African e-health space is one of few that, short term at least, actually may stand to benefit from the global COVID-19 crisis. Yet whether the sector has the ability to prosper in a post-coronavirus world remains debatable.
The number of COVID-19 cases globally is pushing the two million mark, with almost 120,000 people dead. Africa has less than 20,000 of those confirmed cases so far, but the spread of the virus is a major concern given the poor state of healthcare systems and cramped living conditions in many cities.
The continent’s fragile economies and still-developing startup ecosystems are also in grave danger given the likely economic impact of the virus and associated lockdowns. Yet the African e-health space could, conversely, be set to benefit, and they are proving their mettle in this time of crisis.
Africa’s e-health startups are rising to the challenge, and gaining customers
In this time of continental healthcare crisis, and forced behavioural change, Africa’s e-health startups have been forced to prove they have what it takes to fill gaps in service delivery. A host of healthcare-focused startups across the startup have reacted by reformatting existing services or launching new ones, such as Kenya’s Ilara Health, Cameroon’s OuiCare, and Ghana’s Redbird.
Patrick Beattie, chief executive officer (CEO) of Redbird, says the test COVID-19 has posed to African e-health companies is whether or not they truly understand what their customers value, and whether or not they are agile enough to adapt their operations to provide that value in a market where customer behaviours may have completely changed overnight.
On the whole, he is optimistic that they are.
“E-health companies in the region have been quick to act and adapt, with the benefit of seeing what had happened elsewhere in the world,” he said.
Emilian Popa, CEO of Ilara Health, agrees, saying e-health players currently operating on the continent are definitely showing commitment to responding to COVID-19.
“Some players are launching new telemedicine platforms to cater to patients sheltering in place – either due to government-imposed lock-downs or in response to individuals avoiding social contact in crowded medical facilities,” he said.
COVID-19 is also spurring uptake of e-health solutions, as patients are asked to stay home and, understandably, are worried to go to their local, crowded health facility.
“As more authorities tag hospitals as direct vehicles for disease transmission, consumers have started to tap into existing telehealth channels for medical assistance. Conversely, given the scarcity of PPE at the clinic level, we see more local doctors looking for digital platforms to enable them to safely continue delivering their services,” Popa said.
A paradigm shift?
E-health startups are seeing increased uptake as a result of COVID-19, for sure, with Sheraan Amod, founder and CEO at South African online healthcare booking platform RecoMed, saying the telemedicine sector as a whole has moved forward by five to 10 years in just two weeks. But the hope of Amod and other CEOs in this space is that the behaviour change induced by the pandemic is one that lasts once the coronavirus has been overcome.
“We see these initiatives as catalysts that may be paving the way for an e-health focused paradigm shift once this pandemic is over,” said Popa.
“The longer the virus persists, the higher the likelihood becomes of a momentous shift in consumer – and provider – health seeking mentality, and a warmer adoption of e-health solutions, possibly becoming normative in a post-crisis era. This, in turn, could lead to the emergence of a new wave of bold e-health companies and a rapid evolution of e-health capabilities and user uptake.”
Beattie has further good news, saying this behaviour change is aligned with change that was already taking place.
“The driving force in healthcare innovation, especially in the e-health arena, has been decentralisation of healthcare. Typically this has been through the lens of reducing burden on the healthcare system as a whole, but with COVID-19 we’re seeing other benefits,” he said.
“Avoiding unnecessary hospital visits used to be mainly about convenience and cost, but now we see it’s also about safety – for the patient and for those at the hospital already. In this respect it’s more of an acceleration of behaviour change we’re already seen happening.”
A more sustainable future for African e-health startups?
But why had healthcare solutions mostly struggled to scale prior to the crisis? Popa says uptake of e-health services has been slow until now as people prefer “in-person” care.
“There has been some adoption of telemedicine activities across, for example in Kenya, Nigeria and Uganda, but these efforts have largely served patients at the upper end of the social spectrum, concentrated among those who can afford to pay for consultations,” he said.
Yet there are 400 million people on the continent living on less than US$1.90 a day, who continue to struggle to afford in-person clinic visits, and are not spending money for e-health consultations. Telemedicine platforms that charge per consultation have not proven sustainable in this context.
“To this end I think that COVID-19 may not only encourage behavioural change but may also drive business model innovation, creating a e-health service that works for the full demographic spectrum living on the continent. This is something that we have yet to truly see and are excited to see unfold,” said Popa.
Right now, we are seeing a resurgence of interest in telemedicine and other digital health platforms. Yet the future remains uncertain.
“While there are a plethora of organisations creating and repurposing digital health solutions in response to COVID-19, it is still too early to say what the impact of these solutions will be over the long term. The key challenge now becomes “can we entice and retain users?” and “how do we make the digital health business models sustainable?” in a post-COVID world,” said Oluwasoga Oni, founder and CEO of Nigerian e-health startup mDaaS.
Indeed, there is no doubt e-health startups will thrive during the crisis, but what happens once COVID-19 is overcome? While the healthcare industry tends to be less susceptible to external shocks than other types of industries, given services address basic needs, whether or not this boom will be sustained, with the corresponding behavioural change, is something we will only know with time.
Beattie does not think anyone will completely avoid the impacts of the expected recession, but thinks the health sector may have it better than elsewhere.
“I think you will see certain companies who are able to manage the difficult times better than others. These will be companies who have a strong value proposition to customers that is further validated by the acceleration of decentralisation from the COVID-19 crisis,” he said.
Henry Mascot, co-founder and CEO of Nigerian health-tech startup Curacel, agrees the recession will hit all sectors, but believes the health space will benefit from more support than most.
“Many people in Africa who previously didn’t used to take healthcare seriously will start taking their health a lot more seriously, and this will drive up healthcare consumption,” he said.
“Government will increase budgets for healthcare, and this should trickle down into the space. Hopefully investors will give this space a lot more attention as well.”
Many of the challenges that existed before, however, will remain. Popa said business models to provide remote consultations at a low enough cost to make it scalable across large parts of Africa are still lacking, together with low-cost delivery models for critical medication. Overcoming those challenges may be considered more crucial in a post-COVID world, however.
“COVID-19 has made us acutely aware of the importance of the health sector and re-emphasised its essential function,” said Popa. “As a result, even through economic recessions it is important that we continue to invest in and strengthen these core industries to ensure our populations stay healthy.”
At this point, Oni said, patients are more open than ever to experimenting with digital health solutions.
“To keep patients coming back post-COVID-19, e-health companies will have to create a strong value proposition for both patients and clinicians and provide a solution that is significantly better, cheaper, faster, and more convenient than other available options,” he said.
That work is already underway. African e-health has received a timely boost from the COVID-19 crisis, where other sectors have suffered. Now it is a case of ensuring this isn’t only a temporary boom, but a sustained one.
