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Promising Growth in the IT-enabled Medical Industry Market– An interview with Yao Yong, Vice President and General Manager of the Medical IT Division of Neusoft

By Li Zhipeng

Advances in IT create broad market possibilities for all sectors, especially for healthcare, an important and active area. In recent years, IT applications in China's medical industry have gained momentum. Neusoft, a key strategic partner of Huawei, has considerable experience, a successful track record, and an abundance of strengths in applying IT to the medical industry.

In an interview with ICT Insights staff, Yao Yong, Vice President and General Manager of the Medical IT Division of Neusoft, pointed out that the ITenabled medical market in China is booming, which provides tremendous business opportunities. Neusoft's knowledge of the medical industry pairs perfectly with Huawei's outstanding product portfolios and strong technological R&D capabilities. The collaborative efforts of Neusoft and Huawei are delivering great value to the IT-enabled medical industry.

Intense Growth in the Medical Industry over the Next Three to Five Years

ICT Insights: The medical industry in China is experiencing a vigorous period of advances in IT. As an IT expert with extensive industry knowledge, what is your vision of the future of IT in the medical industry?

Yao Yong: First and foremost, the conditions are now ripe for transforming IT in China's medical industry. On the one hand, the entire healthcare system has many challenges as a result of the accelerated urbanization, with people flooding into cities. Issues such as growing patient loads, overcrowded healthcare facilities, depleted medical resources, and increased disputes have all taken their toll on hospitals and public healthcare authorities. Such circumstances have created the need for IT modernization in the medical field. ICT has also expanded its application scope with rapid development in the industry. Over the past few years, the ICT market has enjoyed a compound annual growth rate of 20 percent to 30 percent. On the other hand, IT-based approaches can help medical institutions improve efficiency and resource utilization such as telehealth, and transform the traditional method of broad management to finegrained management that, for example, can trace the use of medicines and reagents.

As China continues to further healthcare reform, ICT promises to shake up the medical industry in terms of medical service quality, efficiency, and availability. Over the next three to five years, the ITenabled medical market in China will see expansive opportunities.

In addition, medical standards are evolving to embrace the use of IT within the medical industry. China has introduced standards for Electronic Medical Records (EMRs), diagnosis, treatment, and health records. These standards might not be perfect, but they are a significant improvement from no standards at all and represent a maturing medical industry.

National policies are also in place for an ITenabled medical industry. Almost all recently issued healthcare reform policies in China include terms that take into account developments in IT. For instance, IT applications are considered as part of the accreditation of first-class hospitals. After all, IT in the medical industry is not only about infrastructure construction but also application and service development.

Technology Drives IT

ICT Insights: What will IT in the medical industry demand from the ICT industry?

Yao Yong: There is a general rule that business development gives impetus to technological transformation, which, in turn, further drives business development. There are several trends in IT advances in the medical industry that I think deserve our attention.

First is the application of wireless technology. There is a strong tendency towards a converged network of newly built Wi-Fi, along with existing fixed networks, and emerging mobile networks in hospitals. Approximately 20,000 hospitals will build converged networks in the next three to five years.

Second, mobile technology will be widely applied to mobile healthcare within three to five years. Mobile healthcare will become an important means for people to conveniently obtain medical services. For example, they will be able to make appointments, access test results, and receive health reminders with their mobile phones. Hospitals can build an application ecosystem that includes mobile technology and delivery of customer-centric services.

Third, the government places great emphasis on telehealth services, which I believe is very important. China is creating medical ecosystems that center around large hospitals or regions. In these systems, large hospitals are connected to smaller hospitals in remote areas with the help of ICT. Information, images, and examination and test results at large hospitals are becoming available for the remote hospitals where doctors can use them to diagnose conditions.

Big Data is another important technology in the process of building an IT-enabled medical industry. Big Data is a hot topic across all sectors, and will become increasingly valuable in the medical field. The ability to gather and analyze medical or health records will create value for all related parties, from individuals to doctors, and from hospitals to pharmaceutical companies. Big Data is also relevant to developing national policies and improving public health.

ICT Insights: As the medical industry leverages wireless, mobile, Big Data technologies and solutions to provide IT-based healthcare, what particular requirements might be raised?

YaoYong: In the IT-development process, the importance of security is beyond question. Security is crucial for all applications regardless of whether it is wireless healthcare, mobile healthcare, or Big Data analysis. For example, security should be assured when patients and healthcare professionals access hospital intranets with their 3G mobile phones that were previously connected via extranets. Privacy is another issue when it comes to patients' personal data.

Therefore, it is essential to assure network security by setting security-related rules. Security issues pose challenges for IT in the medical industry as a whole. The accessibility and accuracy of applications and solutions should also be of concern in addition to security issues.

ICT Insights: What type of products and solutions will be most desired in the future?

Yao Yong: Judging from current development trends, there is tremendous demand for video products. The rapid development of telehealth will drive the need for video products in the medical industry in the near future. The demand for storage products will be next in line. In a few years, the medical storage market will grow exponentially; in particular, the need for storage resources for imaging will surge as large hospitals introduce more high-end equipment. Large storage resources are also required for EMRs and health records. As I previously mentioned, the convergence of wireless, fixed, and mobile networks will create great demand as well as business opportunities for network products.

The market for data center products and solutions is also expected to grow rapidly. Government data centers are currently under construction that will enable hospitals to interconnect and share information. Hospitals will have their own data centers for applications such as business intelligence. Of course, we must not lose sight of applications that are closely related to personal mobile devices, which I previously discussed. Consumer electronic products should also be integrated into IT-based healthcare.

There are new business development opportunities for IT in the medical industry and great potential for future innovations. The medical industry will continue to grow.

Close Collaboration for Mutual Growth and Development

ICT Insights: Currently, Neusoft and Huawei are in close collaboration with one another. What do you think about this collaboration? What market value can it bring? What value can Huawei bring to the IT-enabled medical market?

Yao Yong: It is certainly an asset that Huawei is entering this area. Its leadership will without doubt boost development of the industry as a whole. Neusoft appreciates the opportunity to maintain a strategic partnership with Huawei.

Neusoft and Huawei complement each other in many ways. Huawei delivers leading ICT products and technologies to finance, government, energy, education, and healthcare sectors; and brings value from their associations with the information directors of these industries. Neusoft is the largest applied solutions provider in China. Our strength lies in software applications and we bring our contacts with business directors into the picture. Information directors and business directors focus on different areas, with business directors tending to focus more on changing business dynamics and process optimization.

Neusoft has years of experience serving customers in all of these sectors, especially in the healthcare field. We have approximately 5,000 hospital customers across the country, serve 300 of the 830 first-class hospitals in China, and enjoy a 30 percent market share. Neusoft, with its extensive knowledge of customer needs, possesses insights to predict future trends in the industry. We have the ability to help Huawei break into these markets.

Neusoft and Huawei jointly established a lab in Suzhou, where we will show Huawei customers from around the world how Neusoft's healthcare software running on Huawei hardware products can operate with high efficiency. Neusoft will also work with Huawei on ways to better integrate our products and develop innovative solutions for customers in the medical industry. We will continue to create more value for the industry as long as we combine our industry insights and application software with Huawei's cutting-edge products and successful experience worldwide.

ICT Insights: What is unique about Neusoft's cooperation with Huawei?

Yao Yong: As an applied solutions provider, Neusoft focuses on application software; however, the needs of customers go beyond that. Customers need support from the entire ecosystem, including hardware, storage, and networks. In recent years, we had many partners who did very well in their own areas with their distinctive advantages. Trust comes first in our partnership, followed by efforts towards maintaining long-term cooperation. Neusoft grows and learns with our partners. We believe that a sound ecosystem not only depends on contributions from all related parties, but also on shared benefits.

Over the years we've learned that a partner's "best in the U.S." or "No. 1 in Japan" solution didn't mean it would work in China. We realized that solutions must adapt to the entire ecosystem. The ecosystem of China has unique characteristics and is more complicated than those of the European and U.S. markets, especially in terms of business management processes. We partner with Huawei so that our innovative solutions will invoke a sense of national pride among Chinese customers and demonstrate world-leading features.

Additionally, through cooperation, we are able to gain a competitive edge in terms of localized services. We learned that customers in the medical industry are more concerned with services than with products. As for hospitals, services are vital. If a hospital system breaks down for half an hour, the consequences could be catastrophic. Hospitals need systems that operate reliably 24 hours a day.

There is a common element between Huawei and Neusoft in that we are both very serious about what we do. This is the spirit that guides us to deliver projects and develop our businesses. We are both the largest Chinese companies in our respective domestic domains. I look forward to our future development and our goal to create innovative solutions together. The fact that we share the same mindset is an added bonus that enhances our collaborative efforts.

Huawei has undergone tremendous strategic transformations over the years, with an enterprise business model that fits quite well in areas where Neusoft excels. We have both been passionate about advancing our strategic partnership that will enable us to learn from and grow with one another. We expect to learn from Huawei's global experience and look forward to sharing our strengths in the areas of domestic business.

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