Advertisement

Blog

Central Europe: Where Opportunities Equal Challenges

Significant sales opportunities exist in Central and Eastern Europe for medical equipment manufacturers as the region begins to evaluate the advantages of integrating and expands its IT-based services into health care delivery and implementation programs, according to a new research report from {complink 7014|IDC}.

This is good news for electronics component vendors in the medical equipment market, but it comes with hurdles as challenging as the potentially huge sales identified by the research firm.

In recent years, the medical sector has proven a source of stable growth for the electronics industry. National governments, local authorities, and service providers have rushed to upgrade IT systems and implement electronics recordkeeping to reduce errors and improve operations. The beneficiaries of this push have included not only OEM equipment marketers like {complink 8019|General Electric Co.}, but also component vendors, distributors, contract manufacturers, and consulting companies.

The industry has focused in recent years on the matured markets of Western Europe and North America while seeking opportunities in parts of Asia, especially China, which has moved rapidly to integrate IT services into health care. However, it appears future growth will be centered on developing economies.

Industry analysts believe IT and medical equipment vendors should not ignore Latin America (Argentina, Brazil, Mexico, and Peru come to mind), Central and Eastern Europe, or Asian nations like India, the Philippines, and Vietnam, all of which are nascent but still quite important market segments.

Central and Eastern European nations are in a distinct category; they offer rapid sales growth mixed with irritatingly complex adoption problems. The region has been long plagued with major health challenges, including high and rising pharmaceutical costs, lack of adequate recordkeeping (especially electronic documentation), worker shortages, and increases in incidences of chronic conditions. In a report, IDC analysts said they believe “information technology holds a great deal of potential to help CEE countries meet their healthcare challenges.” The researchers state further:

    While numerous large healthcare providers in CEE have implemented health information technologies, such as digital patient records and serialization solutions, few of these are interoperable with those in use at other hospitals. IDC believes that this situation is limiting the ROI on health IT investments and feeding uncertainty over the value of health IT among clinicians in the region.

Some may see these hurdles as potential dealkillers, but I believe they represent opportunities for determined service providers and electronics equipment vendors. The lack of interoperability of health IT systems can be resolved, though at a high cost to governments and hospitals. Medical equipment OEMs can offer financing and easy-pay options that will make it easier for service providers to adopt newer systems. OEMs should also be willing to assist with consulting services such as installation, maintenance, and continuous monitoring.

Medical and electronics equipment OEMs seeking opportunities in the Central and Eastern European health market may find themselves doing some handholding and organizing educational sessions to explain how their products can help the region improve the delivery of health care. Also, I think it's important to explain the return on investment the governments and institutions in the region can expect from investing in medical IT equipment.

IDC warned that medical equipment manufacturers will have to figure out the most appropriate sales and marketing strategy for the region. Importing a cookie-cutter system from Western Europe or North America simply won't work, Heather Keyes, a senior researcher with IDC, said in the report. “There is this tendency among EU-level policymakers and even some IT vendors to use countries in Western Europe or North America as models for CEE countries, when there is a lot to learn from providers in the region.”

The bottom line, in my opinion, is that a new market opportunity is opening rapidly for electronics, medical equipment, and IT consulting companies in the Central and Eastern European health sector. The companies that will benefit most from the increased sales opportunities will use unconventional sales and marketing methods. The market exists, but tapping it is obviously not for the faint-hearted.

19 comments on “Central Europe: Where Opportunities Equal Challenges

  1. Ashu001
    July 29, 2011

    Anna,

    The Medical Industry is and always has been represented as a Growth area.An area of massive,steady growth though the years.

    This is something which has not been missed by most Electronics manufacturers.As for Central Europe.Two big problems that most people is a rapidly declining population and serious corruption issue that do not permit rapid adoption of Technology.

    Both these problems are much more intractable and may not be solved very,very easily.

    Regards

    Ashish.

  2. Nemos
    July 29, 2011

    “and serious corruption issue” Indeed, they don't want informatics technology in the Healthcare sector  because it is easy to discover the overpriced supplies and the “black” money that maybe has been given to pharmaceutical firms. .

  3. Anna Young
    July 29, 2011

      @ tech4people,

    Thank you for your comment and the two challenges you have identified.

    The first, shortages of workforce in the health care services and declining population. This is as a result of economic and political related problems or challenges in the regions.

    The second point you have mentioned – corruption, which may have hampered health IT penetration in the region. I certainly agree that these have been difficult issues to tackle by the government and various organisations in central Europe

    However, my point is that if the introduction and installation of health IT in some parts of the region have proved productive and beneficial to all concerned, then intractable issues can be managed to a degree. Though it may take longer as you rightly pointed out in your comment.

    I think all it requires will be for the medical and electronics equipments manufacturer and all companies involved to strategise their sales and marketing methods, to enable some sort of penetration.

     There's potential growth in the high tech industry in these regions that is worth tapping  and huge benefits overall.

  4. SunitaT
    July 30, 2011

    Anna, Thanks for the article. I totally agree with you that the lack of interoperability of health IT systems is one of the major problems faced by health industry. But how long do you think it would take governments and hospitals to come up with health IT standards which can be followed by all ? With many countries facing debt crisis do you think health care IT  will get lower priority ?

  5. itguyphil
    July 30, 2011

    I thought the government was providing incentives to health professionals that utilize EMR records systems? So, if anything, shouldn't the govenrment be responsible for the standardization process and oversight?

  6. JADEN
    July 30, 2011

    Many countries of Central Europe are already doing away with their ageing medical facilities, they are now making use of modernise health equipments.  The medical equipment vendors has to come up with the strategies to overcome health challenges in this region to have their market.

  7. Anna Young
    July 31, 2011

    @ Tirlapur, the length of time cannot be gauged at this present time. This is because there are issues surrounding the political and funding mechanisms. It is complex and currently is underfunded, like in any system of government. For example, although private funding has increased efficiency in hospitals and health care organisations priviledged to have health IT systems installed,but has excluded certain population groups who are unable to pay for the cost of the treatment required.

    Nevetheless, I think with the encouragement of private funding, coupled with that of central government's, medical equipments OEMs can also offer various financing options for service providers to adopt IT systems and hopefully this will create and improve IT standards overall that will be worthy of emulation.

     

  8. Himanshugupta
    July 31, 2011

    Anna, IT and electronic industry are finding new ways to improve healthcare sector. Cheaper tablets with internet connections are being used now a day to get realtime feedback on surgery and diagnostics. I think the challenge lies in keeping the cost low, which can be done by distributing the task in different time zones while health practitioners perform operations or diagnose the problem. 

  9. Ms. Daisy
    July 31, 2011

    Nemos:

    I believe the healthcare professionals in the countries and regions stated all look forward to the EHR/supporting ITs and would welcome them when available. The vendors need to pitch their sales to these groups and associations who can help put presssure on corrupt career politicians for their adoption. I agree with the fact that corruption is a major barrier but I believe it is not insurmountable. 

  10. mfbertozzi
    July 31, 2011

    Well, I am aligned to your thoughts. I am convinced IT operations and support could be located abroad and to follow specific needs in a region, it is enough to staff quite small teams very focused on customers and holding their culture, mindset.

  11. mfbertozzi
    July 31, 2011

    I have really appreciated your editorial Anna, including posts delivered inside the community. You have shown, in my opinion, the real picture: in Central/Eastern Europe, IT opportunities are ramping. Not to say it is an easy market to gain, but aligned to your picture, we couldn't forget important players as Google, have launched their business for example in Romania, at the end of past year, because of biz opportunities in those regions.

  12. Taimoor Zubar
    July 31, 2011

    Interesting post, Anna. What do you think are the most significant barriers companies will face when they enter the Central European market to sell IT-based services in healthcare? I think the major problem will be the difference in the medical processes in the region and the systems will have to be redesigned to cater to these processes. Also, training and educating the end-users will be critical to ensure that the systems are able to run successfully.

  13. electronics862
    July 31, 2011

    Thanks for the post Anna. IT and electronic industry coming fastly in the healthcare domain. The real barrier is to advertise the healthcare products so that it will reach each corner of the globe. This will improve e-health programs where patients will get remote treatments.

  14. Ashu001
    August 1, 2011

    Nemos,

    Not to mention the fact that all those over-priced medical supplies ensure that there is always plenty of unaccounted wealth swishing around the system.

    IT helps to ensure a Degree of Transparency in any sector.And who suffers the most from a lack of Transparency??? Black Money/unaccounted wealth.

    Regards

    Ashish.

  15. Ashu001
    August 1, 2011

    Anna,

    A Medical Supplier also needs to be prepared for the long haul and should be able to wait it out if it takes longer than usual for returns/profits to materialize here.

    Regards

    Ashish.

  16. Eldredge
    August 1, 2011

    The technology certainly exists to resolve the system iteroperability issue, however it may be more cost effective in the long run ti upgrade everyone to compatible systems rather than create IT solutions for all of the interoperability issues.

  17. mfbertozzi
    August 1, 2011

    Eldredge, I personal think you are right, but what about people attitude to use technology? Editorial from Anna inspires scenarios absolutely interesting, but are we really convinced people working in the healthcare sector are ready to move on their usual job toward technology adoption?

  18. Eldredge
    August 1, 2011

    Willingness to adopt the technology is definitely a factor as well. I think we suffer from some of the same issues in the US. Among other factors, any time the technology makes trasnfer of personal information easier, there are privacy and security concerns.

  19. SunitaT
    August 3, 2011

    @Anna,

     Thanks for the reply. Lets hope that  encouragement of private funding, coupled with that of central government's,   will create and improve IT standards soon.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.