Daniel Mazon, Vice Chairman & Managing Director, Philips Indian Subcontinent explains to Viveka Roychowdhury how the pandemic became a catalyst to the value proposition offered by Phillips and why he believes that policy initiatives like Ayushman Bharat and Atmanirbhar Bharat are steps in the right direction
What have been the broad trends over the past year, since the COVID-19 pandemic broke and will they sustain over 2021 as well?
Despite the sadness of the humanitarian crisis that COVID-19 brought to the world, certainly to all of us here in India it actually worked as a catalyst to support the strategies that we have been driving. It accelerated us towards what we believe healthcare should be.
One of the things that we are working towards is our goal to increase access to care. At Phillips, our purpose is to improve people’s health and well-being through meaningful innovation. We aim to improve 2.5 billion lives a year by 2030. And India plays a huge role in that ambition. So, while creating access to healthcare at the bottom of the pyramid, how can we make it more affordable, and increase access. How can we make solutions and help healthcare providers and the government open up healthcare for millions of people to have access.
The pandemic has exposed how fragile healthcare systems are across the world. And we realised how much improvement is required in the healthcare space. The pandemic helped in accelerating and showing the need to look at healthcare end-to-end. That is a trend we saw coming and it is not going to go away; it is going to stay.
And while you increase access (to healthcare) it needs to be affordable and accountable. We are looking for results in not just what is being done but what is the impact of it. Additionally, we need to great value from the services being provided.
The COVID-19 pandemic exposed the need for a much more integrated and connected healthcare ecosystem. And I can give you examples. ICUs have many doctors, equipment, monitors, ventilators etc focusing on patients. Many hospitals in small towns do not have the medical expertise to serve the ICU.
So, with our e-ICUs, we leveraged technology to look at patients and support medical professionals in smaller tier two or three towns from a centre of excellence, let’s say in Delhi. And that’s fantastic, right? Because now you have the best of both worlds. You have a great medical professional providing support to another one in a tier two city without having to move over there, leveraging technology. When we use that, we use our ventilators, monitors, cameras, IT platforms, sensors, different things to create that infrastructure.
We have had this product for the past at least five years. But it was not until now, after the pandemic kicked in, that the healthcare system has started to become much more accepting of this concept. They realised that now that the pandemic created an urgency, we just have no other option, but to leverage this technology. So, the resistance that we saw before is not there anymore. And now that you have experienced something that works, why would you not want it to continue? That is one example how the pandemic became a catalyst to the value proposition that we have at Phillips.
When you said that there was resistance to these systems, was the resistance cost driven, or fear of technology, etc?
It was a combination of a certain level of scepticism to have somebody else from another place coming into your area of treatment. We have seen places today with the pandemic, where oncologists, cardiologists, radiologists, all work quite closely together, remotely. So, the data science behind everything that happens in healthcare are starting to consolidate to a certain extent. So, there was scepticism, and there was some cost associated to that as well.
When we launched this product (e-ICUs) for the first time, we put a lot of technology into one bed. In our next version of it, we had the same technology serving two ICU beds, with the camera now focusing on both ICU beds. We added some new AI to the device so that we could monitor it.
So, we evolved in the next generation of our e-ICU, which allowed us to bring costs down and make it more affordable to our customers as well. And I think the fact that the government’s starting to reimburse more treatments, with Ayushman Bharat coming on board as well, shows how important it is. So COVID-19 brought the lack of connectivity to the center of the discussion and the importance of being able to leverage this technology across the country.
There were mobile ICUs introduced in June 2020 which were specifically designed to tackle pandemics like COVID-19. What has been the market’s response?
Our team was able to identify new needs of the market during the pandemic. They then launched a portable ICU, which is a prefabricated building that could be deployed in such a way that nine ICU beds could be built in two days. So, imagine the opportunities of combining a brand-new ICU that would take, in a brick-and-mortar type of scenario, in all the markets of the world, at least a year to come up with something like that. The prefabricated building meets and fulfils all standards of safety, infection controls, proper equipment and everything, in less than two days.
Combine that with the ability to remotely connect this to the hub and spoke model. So, the adoption has been fantastic. A good example we have is Cloudnine Hospital, which is primarily dedicated to expecting mothers, newborns and children upto two years .We were able to work with them and partner in connecting all their neonatal ICU beds under the e-ICU concept.
We installed the first unit of Philips’ state-of-the-art portable ICU at Masina Heart Institute in Mumbai. The ICU will be used as an Advanced Cardiac Care Unit (ACCU) which will treat patients suffering from cardiac ailments in a COVID-19 safe environment.
Speaking about another example, Phillips is a leader in the Ultrasound Sonography (USG) technology. We have USG for OPD, for cardiology, and we have Lumify, which is a portable USG. This product have had some level of success, but it wasn’t until the pandemic that it became a very important diagnostic tool that is point-of-care for many physicians. It is portable so it can be moved to different locations; to detect pneumonia, different respiratory diseases related to the pandemic. So that is another example of a particular product that the pandemic has accelerated and supported. And those products also go along with this overall solution that we are talking about in the e-ICU or ICU itself.
What have been the other solutions launched in the healthcare portfolio triggered by COVID-19 conditions?
We also have a robust line of ventilators, from basic ventilation to interventional ventilation, meant for patients in more severe stages of respiratory treatment, or even COVID-19 treatment, if it requires intubation or is invasive. We have been supplying these solutions to and working with the different states and different public and private hospitals, from very early on in 2020. In fact, we ran out of ventilation solutions at the beginning of last year.
And one other product that I think the industry underestimated was oxygen concentrators. People were initially talking about ventilation, but we realised that the treatment of COVID-19 patients with oxygen early on was quite important. Because if you catch COVID-19, if you start treating with the appropriate drugs as well as oxygen early on, you minimise the infection rate and therefore there is less need for the more invasive type of ventilation. Phillips Resperonics’ oxygen concentrators is another product line that has been extremely successful in helping save people’s lives.
We learned that from Italy and other parts, where the pandemic started before it hit us in India. When we were in our lockdown, there were already a lot of sad stories from Europe. So, I learned a lot from my peers in those countries. And we started to proactively try to share some of those learnings with the medical industry here. Oxygen concentrators was a very important way of contributing to this support.
CT scans also became quite important as they started being used to scan the lungs and respiratory tracts of patients. All our additional platforms around the world, like electronic medical records, digital platforms for patients, for doctors to collaborate, became very important to treat this unknown disease.
You just spoke about doctors collaborating among themselves remotely, not just within the same institute, but to share their knowledge. How will telehealth sustain beyond the pandemic and how will India reap the benefits of AI enabled data and analytics from tele medicine? There are going to be a lot of learnings from COVID-19 and it seems that we going to be living with the condition for some time, with doctors talking about long COVID.
The COVID-19 pandemic has resulted in a rapid increase in telehealth use globally. At Philips, we think that telehealth is going to definitely sustain beyond the pandemic.
2020 was a critical year of learnings for us as we got exposure into some areas of improvements and new innovations.
Early 2020, we introduced a product called QuestLink, a COVID-19 screening application used to screen COVID patients. In February 2020, I was visiting our customers in Sri Lanka. And we had developed a product that was similar to the Arogya Setu app where you get patients/people to input their information. It is more to do with population health management, which Phillips has a bit of experience in. It was more specific towards COVID-19 symptoms. But why not have that same application expanding out for diabetes, for cardiac diseases? We also have a product called MOM, which is mobile obstetrics monitoring, for high-risk pregnancies.
Arogya Setu can be expanded to become a much bigger type of medical record and population health tracker that would allow the government and different institutions to know how to treat patients more proactively in a more, holistic and proactive manner. We believe that is the way to go. We think that will help reduce the cost of healthcare, which will allow an expansion of access to healthcare as well.
The e-ICUs are not going to disappear. If anything, our customers have realised that they can do a lot more, a lot better with what they currently have and have expanded it into treatment.
So, I am quite optimistic about what is going to happen in the future for us. I do have my concerns in terms of cost of healthcare, in terms of the next steps of Ayushman Bharat, where the next step is (that) we start looking at different types of models where the outcomes become as important as the service being provided.
Because today, it is more about do you provide the service? But we need to start thinking more about what is the outcome of a particular medical service that is provided. There is also a move to accountable care organisations (ACOs), linking accountability and outcomes to the cost. In Philips, we have the capability to work on that. We have 4000 professionals in additional space in Bengaluru. We have manufacturing facilities, R&D facilities in Chakan, Pune or in other parts of the country so that we can continue to develop AI-based platforms with data analytics which we can feed back into the system and help professionals treat patients better.
Another aspect that is raising concerns, especially with the launch of the National Digital Health Mission is data confidentiality. Who gets to see the data, who owns the data, et cetera. Where do you see India developing on that front?
Phillips has a very strong healthcare informatics arm. And all the diagnostic and consumer products that we make are either all connected or going to be connected to it. This feeds into the data that is coming back to retrofitting the model and keep improving it, providing better insights and supporting doctors to practice medicine and to help people.
We have our electronic medical record system, which is like an operating system with all the different applications that go from administration to clinical, to back systems in radiology, to even insurance companies in different parts of the world. When I was in America, I used to work very closely with this product. Brazil alone has more than a thousand customers, big hospitals, and smaller institutions, using it.
So, we are very familiar, and we take the driver’s seat extremely seriously. And we know how important it is to make sure that we not only respect the laws of the country that are different in different parts and to protect the patients’ safety, but we also have, different types of security systems and dedicated people working around that.
You were appointed as vice chairman and managing director for Philips Indian subcontinent in October 2017. Is the India market shaping up as per the company’s expectations? How important is India, as a healthcare market, in comparison to other geographies?
India is an extremely important country and market for Phillips. And we are in a journey to continue unlocking the potential of the country, by creating access to care, by helping to provide more healthcare especially to tier two and tier three cities.
We are committed to do more manufacturing and R&D in India. For instance, in X-rays, MRI and USG. We launched the Affiniti line of ultrasound for Phillips last year, which has an extremely sophisticated quality of sound. It was part of our Make in India plan that was launched last year. We have more than a hundred customers that have purchased this Make in India product.
And that’s just one example. In MRIs, we launched Made in India RF coils, which is part of the MRI. So, I am extremely pleased to see the progress that we are making by doubling our manufacturing facility, adding more products that are critical to the population.
And I see the government also stepping in. For instance, we can look at the plan for Ayushman Bharat and how that is shaping things. There are still more things that Ayushman Bharat has to do, to have a bigger impact, but it’s a great start, right? It is a fantastic start that has already impacted a lot of people in the country. So, we are quite excited about that.
We will continue investing (in India). We knew that when we worked through the COVID 2020 crisis, we were very careful to make sure that we treated the short-term needs without compromising the long-term investments that we’re making and we’re quite successful making that balance.
When you talk about making in India for India, are any of these products also exported?
Absolutely. From our Healthcare Innovation Centre (HIC) in Chakan, Pune, we export to 116 countries, including the US. We export surgicals, C-Arms for surgery cath labs, X-ray and RF coils in the MRI space.
What is your take on the Atmanirbhar Bharat initiative, which is about making India self-reliant in all key sectors? In a way, you are saying that you’re contributing to India being self-reliant for medical med tech and medical electronics, et cetera. How have policies been on this front from the government side? There is a debate that has pitted MNC MedTech players versus indigenous players on the revised Public Procurement Order 2017, which proposes to raise the local content percentage from 15 to 20 per cent.
When I was in Latin America, I had a chance to see a similar proposal, and it is a journey that happened there as well. It is a journey that takes years for us to keep pushing this. I believe the steps that we are taking here in India are the right steps. What we need to do is maintain a balance between the capabilities being developed in the country, and the requirements that the government imposes.
For example, when I was in Brazil, Latin America the government wanted a certain amount of content made in country. But if there are not enough local suppliers capable of providing that, it’s going to be very difficult to fulfil a regular requirement.
So, what you do is you set milestones for companies like ours, to work with local suppliers to develop that. And in return for the effort and the work, the companies will have certain benefits to participate in tenders or fiscal incentives and things of that nature. I believe that we are in that direction.
I sometimes feel we may take a step bigger than our legs, but then I believe the government is open to listen. We have worked with them and they realise that there are some corrections that need to take place. So, it is a little bit of give and take.
I’ve seen both sides of the coin, but I think we are directionally correct. And eventually, we’ll have a lot more (local) content. We are increasing the content from local supplies every year because the local suppliers we’re working on are becoming good, much better than they were before. So, we’ve got to have a little patience because it’s a journey. But I think at the end of the day, we’re on the right track.