Shortly after my last article on telehealth was published in June, Japan’s Suga administration reiterated its intention to keep promoting telemedicine as a priority policy agenda. This year’s annual cycle to discuss regulatory reforms commenced on Aug. 23. In its four-page document outlining the main pillars of reforms, the Cabinet Office positioned telemedicine as the priority item both in “the digital transformation in the private sector” and “the digitalization of healthcare and nursing care.” Now, the government officially has committed to permanently allow the use of remote consultation for the first contact between a doctor and a patient, as well as to consider raising the reimbursement rate. The details of the legislative reform will be agreed by June 2022.
It is not a coincidence that telehealth was positioned as a reform to be driven by the private sector. While the Ministry of Health, Labor and Welfare (MHLW) oversees online treatment conducted exclusively by doctors, the Ministry of Economy, Trade and Industry (METI) is responsible for policies regarding remote health consultations by broader medical professionals. In its recent effort to develop a guideline to ensure the quality of service, METI reached out to over 15 companies, as well as conducting pilot projects with four service providers over the course of the pandemic. This is no surprise considering the remarkable improvement in technology and service that has been achieved in the private sector, and there is high chance that the Ministry of Health will take the same approach in its coming policy discussions.
The recent trend in the private sector
It’s been a while since technologies such as remote radiology solution, telepathology and tele-ICU were introduced for remote communication among doctors to address the lack of specialists in rural areas. The providers of such digital solutions are leveraging their expertise and extending their services to doctor-to-patient communications. D-to-P services targeting specific demographics and purposes also existed pre-pandemic. For example, there were already platforms for virtual communication and remote sharing of vital datas—such as heart rate and blood pressure—targeting the elderly in hospice care and those with serious chronic conditions. The providers of these platforms have been competing to expand their target to the general population, as well as to develop an even more effective and seamless platforms. A popular idea is to incorporate secure accumulation and sharing of broader health-related information, including the medical record from hospitals and digitally generated data with wearable devices and so forth.
Furthermore, the market entry of major IT companies since last year has made it clear that the platforms for healthcare is not a niche in the IT industry anymore. In December 2020, Japan’s most popular messaging service, LINE, started providing an integrated platform where the users can make appointments, conduct a video consultation and pay for the service all together. The three biggest mobile providers in Japan, with the combined market share of 85.1%, all announced the launch or the expansion of services for telemedicine and online prescription in 2021. Additionally, a cable TV provider, J:COM, launched a telemedicine service using TV in July, which mainly targets the elderly who are not familiar with the use of smartphones and laptops. At the same time, as the service gets more generalized and commercialized, a new niche has also been explored: online consultation for treatments with a strong need for patient privacy, such as gynecologic care and AGA treatment, are rapidly gaining popularity.
Rare opportunity for IT providers: business implications and public affairs
Fuji Chimera Research Institute, a market research company specialized in ICT and advanced technologies, estimated in February 2021 that the market size for online consultation and prescription guidance combined will grow from 8.1 billion yen (approximately $73.5 million) in 2019 to 13.4 billion yen ($122 million) by the end of 2021, and close to 20 billion yen ($182 million) by 2025. These numbers might even be too conservative considering the drastic policy changes over the last couple of months. Many financial media outlets featured that the stock prices of telemedicine solution providers have risen across the board after the recent government announcements.
Business implications for the digital solution providers are obvious, but I also cannot think of a better opportunity for the private sector to build or strengthen a meaningful relationship with the policymakers. The Japanese government has introduced the idea of “co-regulation,” which means that the government will only play a supporting role in sectors where the technological advancement is too fast for the traditional way of regulation by written laws. The key players in the industry, including businesses, NGOs and industry associations are expected to self-regulate based on a basic, over-arching rule, and the government will support the compliance by additional administrative measures. Framework legislations to enable such a system have been established or considered in e-commerce and other IT sectors, and telemedicine is most likely to be next.
The private sector has and will keep accumulating the practical knowledge on the effective use and potential issues of telemedicine, which the policymakers desperately need in order to develop a baseline framework. The priority topics include data security, support desks for patients and doctors in cases of trouble, workflow reconfiguration in hospitals, appropriate training of medical professionals, optimal use of telemedicine in a patient’s treatment journey and so on. Even after the foundational legislation and guidelines have been developed, the government will need cooperation from the private sector to effectively monitor its development and introduce necessary support and regulations. It will be a great opportunity for businesses not only to receive the funding for startup investment and pilot projects, but also to mold the preferable regulatory environment and secure advantage over their competitors. They should immediately start organizing the findings and evidence which will inform the policy suggestions and requests, as well as the overall public affairs strategy to effectively deliver such input.