The problem
As the world’s fourth most populous countries in the world, Indonesia is facing a
unique set of health problems. Though many achievements have been made in
the health sector, there remain many challenges in the future including complex
disease patterns where both non-communicable and infectious diseases play
significant roles. For example, the biggest killer in Java and Bali remains
cardiovascular disease that accounts for 30% mortality but 22% of deaths in the
same region can also be contributed to infection (1) .
Another big challenge is health inequality with some of provinces in
Indonesia fare worse than some of the poorest countries in Asia. This can be
understood in the context of Indonesia’s geographical challenge where the
archipelago ecosystem complicates the delivery of efficient health care to
remote areas in Indonesia (2).
However, an opportunity may be found amidst these challenges. In other sectors,
the digital technology has been championed as a possible solution to overcome
the vast distance over Indonesia’s 13,500 islands (3) . Many consulting bodies have
also identified the use of technology, telemedicine, and mobile phone
applications as expanding opportunities in the health sector (4) . This brief review
will look into the commercial opportunity and feasibility of using creative
technology to improve health in Indonesia’s remote areas.
The market
Without a doubt, the Indonesia’s health care market is expanding rapidly. Health
care spending in 2020 was estimated to increase by 200% from 2014, equating
to an increase from USD 5.3B to 15B. This sharp rise is driven by the
introduction of an ambitious universal health care program financed by the
largest health insurance system in the world called the JKN (Jaminan Keamanan
Nasional) which aims to cover all Indonesian citizens by 2019 (5) . Quite a
significant amount of this fund will be devolved to the local governments,
including those far removed from the Java island, which may be more focused on
reducing health inequality in remote areas.
Of this market, the medical device market is expected to grow from USD 673M in
2013 to USD 1.22B in 2018 with CAGR (Compound Annual Growth Rate) of 13%,
mostly in the medical diagnostic equipment (6). Most of the medical devices used in
Indonesia are currently imported (97%) with its total value expected to increase
by 5.4% annually. The total export value in 2013 was USD 304.6M, mostly made
up of low-added value products such as surgical gloves and bandages (7).
Possible solutions – Information Technology (IT)-driven
This amazing business opportunity has not been lost by the big players of the
industry, as evidenced by a myriad of consulting groups and international health
care companies such as GE, Philips, and Siemens expressing their interests (8).
At present, the use of information technology has been explored by some of the
multinational companies. GE created a solution for remote areas by creating
mobile pocket-sized ultrasound machines (9). Philips has also piloted mobile
obstetric screening with further information technology platform development
that allows images’ analyses to be done remotely (10).
Currently, many health care start-up companies have been established including
HaloDoc, PesanLab, and ApotikAntar (11). All of these companies focus on mobile
phone applications. Another innovative example in the health technology sector
is provided by Indonesian students diaspora. A group of Indonesian students in
the UK formed a team called Garuda45 who won the Microsoft Imagine Cup 2016
World Citizenship category. Their idea is to develop a comprehensive system
that combines automated detection of tuberculosis pathogens and integrated
information analysis system that can provide treatment reminder to patients (12) .
Creative innovations like this can overcome the access issues secondary to vast
distance in Indonesia and deliver efficient health care to her remote areas.
Research groups that produce such technologies are likely to come from
academic background with minimal exposure to the regulatory framework or
financial support. A viable ecosystem needs to be created to support these novel
technology creators to transform their innovations into commercially-viable
products that can be used widely in Indonesia’s remote areas to deliver health
benefits to their residents. This will likely require cooperation between local and
national governmental bodies, regulatory bodies, end users such as PUSKESMAS,
health product distributors, health care manufacturers, academic world, and
investors who specialize in lifescience start-up companies.
The potential benefits
Creative technology in Indonesian health care sector can bring multiple benefits
to different sectors of the community. The obvious benefactors will be patients in
the remote areas who can receive effective diagnoses and treatments of their
health conditions using the technological innovations without waiting for
complete infrastructure development. Secondly, the provincial government can
profit from the improved health indices locally while the central government can
improve its national health statistics.
These technological innovations will also benefit Indonesia’s academic
institutions who will be recruited as active partners to test these technologies in
the appropriate environment while also benefiting from transfer of technology.
Such co-operation may promote further academic collaborations in the future.
Indonesia’s information technology (IT) workers will also benefit from having
the opportunity to apply their skills in a challenging new sector and having
collaboration with scientists from the lifescience industry. Finally, the success of
this industry will also benefit investors who have put their trust in the start-up
companies.
Challenges and future work
The development of this market is not without its own challenges. The first
challenge is in providing an opportunity for investors and technological start up
companies to meet up. One of the solutions of this is in a co-working space in
Jakarta called H-Cube that focuses on healthcare, lifestyle, and life science (13).
However, this solution is currently restricted to being physically in one place. In
the current globalized economy, a more digital solution is required to allow
cooperation from different parts of the country, if not the world. This is
especially true in Indonesia where lifescience research is still relatively
underdeveloped yet Indonesian lifescience researchers are spread throughout
the globe.
Another big challenge is in regulations. Soon, regulations surrounding medical
devices will be harmonized with the other ASEAN countries through ASEAN
Medical Device Directive (AMDD) (8). However, until this directive has taken place,
approval has to be obtained directly from the Ministry of Health (MOH) that
includes a common submission dossier template completion and ISO 13845
certification. Furthermore, health care devolution also means different
regulations may be implemented in different provinces. However, the MOH has
recently developed e-registration and e-catalogue of medical devices which is
expected to improve the efficiency of the registration system. It is also important
to remember that any foreign companies will require an Indonesian partner
company to distribute health devices.
There is no panacea or a one-fit-for-all solution to this unique problem in
Indonesia. However, there are examples from around the world, one of them
being Startupbootcamp Digital Health Berlin (14) . Though such program can
manifest itself in different ways, its main principle is to support researchers and
medical practitioners who possess innovative ideas with technological and
financial expertise to take the next step forward to penetrate the market.
As this market is relatively uncharted, it is still far from maturation.
Hence, successful entry into this market may promise large financial reward
while at the same time provide a creative solution to health problems in Indonesia.
Resources:
1. The World Bank. Improving Indonesia’s Health Outcomes.
http://siteresources.worldbank.org/INTEAPREGTOPHEANUT/Resources/health.pdf
2. The Loadstar. Indonesia may be a land of opportunity for logistics players as demand grows.
http://theloadstar.co.uk/indonesia-may-be-a-land-of-opportunity-for-logistics-players-as-
demand-grows/
3. Huawei. Indonesia: can its leaders use the internet economy to turn intention into action?
http://www.huawei.com/minisite/gci/en/indonesia-internet-economy.html
4. The Alliance experts. The Indonesia healthcare and medical market.
http://www.allianceexperts.com/en/knowledge/countries/asia/the-indonesia-healthcare-
market/
5. Global Growth Markets. Indonesia healthcare market opportunities. http://ggmkts.com/g-
Indonesia-healthcare-market-opportunities
6. Frost & Sullivan. Indonesia continues to be one of the more attractive markets in ASEAN for
foreign healthcare companies. http://www.frost.com/prod/servlet/press-
release.pag?docid=291243368
7. Global Business Guide. Indonesia’s healthcare industry; showing strong vital signs.
http://www.gbgindonesia.com/en/services/article/2016/indonesia_s_healthcare_industry_sho
wing_strong_vital_signs_11492.php
8. Oxford Business Group. Market for machine grows in Indonesia’s health care sector.
https://www.oxfordbusinessgroup.com/analysis/market-machines-grows-indonesias-health-
care-sector
9. GE Healthcare. Indonesian maternal healthcare to benefit from GE pocket-sized ultrasound.
http://newsroom.gehealthcare.com/indonesian-maternal-healthcare-to-benefit-from-ge-pocket-
sized-ultrasound/
10. Philips. Mobile obstetrics monitoring maternal telehealth software.
http://www.philips.co.id/healthcare/product/HC867055/mobile-obstetrics-monitoring-
maternal-telehealth-software
11. e27. This startup wants to bridge the missing link in Indonesian health tech scene.
https://e27.co/startup-wants-bridge-missing-link-indonesian-health-tech-scene-20160826/
12. Channel 9. Imagine Cup 2016 Indonesia Final – winners announcement.
https://channel9.msdn.com/Events/Imagine-Cup/Imagine-Cup-2016-Indonesia-Final/Imagine-
Cup-2016-Indonesia-Final-Winners-Announcement
13. e27. Healthcare startup in Indonesia? H-Cube might just be the right coworking space for you.
https://e27.co/healthcare-startup-in-indonesia-h-cube-might-just-be-the-right-coworking-
space-for-you-20170110/
14. Startupbootcamp. Startupbootcamp digital health Berlin.
https://www.startupbootcamp.org/accelerator/digital-health-berlin/