Prospects and implications for Korean digital healthcare industry following inauguration of new president, Jae-myung Lee
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MDREX aims to provide practical insights to our clients through timely analysis of political and industrial trends in medical device and digital healthcare sectors. In this issue, potential impacts onto digital healthcare and medical device industries following the inauguration of the new president, focusing on his presidential election pledges, were analyzed and commented as follows:
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1. Focusing on fostering new industries such as AI and promoting regulatory innovation
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The Lee Jae-myung administration announced 'Recovery, Growth, and Happiness' as its three major visions for national integration, and selected 'Entering the top three AI powerhouses and fostering future strategic industries' as the first of the 'Five Major Tasks for Real Growth'. Medical AI is one of its key areas. In particular, regulatory improvement through a balance between the use and protection of medical data, expansion of the K-digital platform and big data center, and continuous expansion of the AI learning data building project through the '2nd Digital New Deal' are political directions that can give and expand R&D and verification opportunities for medical AI companies. To this end, it is expected that regulatory innovation for data combination utilization in the medical industry will be strongly promoted. For reference, the Ministry of Health and Welfare has promoted projects such as 'Smart Hospital (Remote ICU and Smart Infection Management, etc.)' support to apply the '1st Digital New Deal' to the medical field.
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2. Establishing a digital healthcare innovation growth system and enhancing the innovation of the medical device industry
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Four promotion tasks were announced to establish an AI-based digital healthcare innovation growth system. They are ① Strengthening self-determination rights and reliability of health information by expanding a convenient and safe digital foundation ② Ensuring safe utilization of medical/health information by standardizing and encrypting healthcare big data and reinforcing personal information protection ③ Establishing a foundation for mutual linkage and joint utilization with an integrated management system for public healthcare data ④ Establishing a full-cycle investment and training system for AI experts in medical field from technology development to field utilization, etc. Through the above four promotion tasks, it is expected that government-led medical MyData projects such as the establishment of the MyHealthWay platform will be accelerated, and expansion of public data to the private sector and data linkage between hospitals and institutions will be promoted.
In addition, it has been announced that the new administration would support global expansion and export growth through fostering the digital health medical device industry, improve the quality management system of medical devices, and enhance the innovativeness of the medical device industry by establishing appropriate compensation standards for innovative medical devices. Moreover, the new administration plans to focus on advancing the distribution structure of the medical device industry by improving unfair practices such as the 'indirect procurement system', etc.
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3. Strengthening regional, essential, and public medical services and an integrated approach to health care and social welfare
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President Lee Jae-myung has shown interest in strengthening the public medical system and expanding digital-based medical accessibility since his days as the mayor of Seongnam and governor of Gyeonggi Province. In particular, he has emphasized the digital transformation of public medical institutions to resolve medical imbalances and regional gaps, and this can become the basis for introducing AI-based solutions to regional hospitals or health centers. Specifically, it is expected that the digital healthcare industry can be applied to establishing a physician-led customized primary medical system, expanding home visits and home care, and institutionalizing non-face-to-face treatment that considers quality and safety of medical services.
He also has emphasized the establishment of a medical system focusing on early diagnosis and prevention in connection with welfare, beyond the simple provision of public medical services. Especially, in relation to the establishment of an integrated support system for responding to an aging society, 'building a community-integrated care system where community members such as elderlies receive medical and care services at home' is in line with the value of AI-based solutions as a 'preemptive diagnostic tool'. Also, the possibility of National Health Insurance Service's linkages with health screening programs as well as local autonomous social security projects of local governments are also prospective.
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4. Possibility of reorganizing the medical AI registration and reimbursement system
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Furthermore, he also mentioned of a flexible approval system for innovative technologies (e.g., nHTA deferral for 140 product categories approved with CER) and reimbursement listing system, such as advanced entry-post evaluation for medical devices and digital health technology, and the introduction of pre-reimbursement (such as selective reimbursement) - post-adjustment system, which may increase the possibility of early market entry for AI solutions.
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In summary, although the Lee Jae-myung administration has not yet presented specific healthcare policies, based on the presidential election pledges announced during his campaign, it is very likely that it will create a favorable environment for research and development, institutionalization, and public healthcare application in the field of digital healthcare, especially AI.
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