Invest KOREA

Smart Healthcare refers to a service that monitors and manages individual health status in real-time by combining digital technologies—such as Big Data, Artificial Intelligence (AI), the Internet of Things (IoT), and the cloud in the health care field in charge of diagnosing and treating diseases—thereby enabling personalized medicine. Though there have been attempts to tap into related concepts since the mid-1990s, an age of Smart Healthcare genuinely applied to daily lives has just begun thanks to the expansion of exponentially growing telecommunication technologies, sensor technologies and personal devices. In particular, the pandemic that has hit the world since 2020 appears to have provided momentum for the application of Smart Healthcare, such as remote treatment, to become full-fledged in a situation where medical staff cannot easily access patients.

During the spread of COVID-19, medical institutions had difficulties operating smoothly due to closures as the medical staff were infected with the virus. Accordingly, the Ministry of Health and Welfare conducted remote treatment through telephone counseling for one year, from Feb. 2020 throughout Feb. 2021. In one year, 940,000 patients received 1.64 million prescriptions, followed by prescriptions related to high blood pressure, diabetes, and hyperlipidemia.

In fact, the main goal of Smart Healthcare with telemedicine is to constantly monitor the patient's condition alongside abnormal symptoms, and to give appropriate treatment. Korea has applied the service to real patients and had a success during the pandemic. Also, to further advance the system, the country is currently distributing relevant equipment, making a Big Data database, and securing cases with regards to prescription and prevention.

The Global ICT behemoths including Apple, Google, and Amazon have already entered the international Smart Healthcare market, and are building a healthcare ecosystem through collaboration. Digital technologies such as AI, IoT, wearable devices, smartphones, and cloud computing have been widely integrated, allowing more accurate diagnosis and status monitoring in connection with personal health records (PHR).

In addition, genome analysis plays a pivotal role in precision medicine and personalized medicine, the core of Smart Healthcare. Furthermore, a government-led industrial support - the U.S. medical policy such as the Cancer Moonshot* - and revitalization measures act as major differentiators in the field of genome analysis.

*Cancer Moonshot Initiative (2016): A U.S. government-led health policy that aims to reduce cancer mortality by more than 50 percent over the next 25 years, and better the experience of cancer patients/survivors and their families.

As of 2021, there are 363 companies in the domestic smart healthcare sector, and their total sales in 2020 reached KRW 1.35 trillion. By business area, intelligent health management services grossed KRW 752.6 billion won, 55.6% of the total; personal health care devices made KRW 299.1 billion (22%); and home POCT devices KRW 210.6 billion (16%).

Most notably, Korean start-ups, recognized for their technology, are expanding in terms of investment promotion, with Noom attracting USD 540 million and HUINNO attracting KRW 20 billion. Moreover, large companies such as domestic insurance, telecommunications, and platform companies are also entering the Smart Healthcare market in real earnest. The Kakao Group established a healthcare CIC in December 2021, and KB Insurance set up KB Healthcare in October 2021.

The Korean government announced the "4th Industrial Revolution-based Healthcare Development Strategy" in December 2018. This strategy mainly focuses on operating a pilot system for the production and management of healthcare big data; developing new drugs using AI; building a smart clinical trial system; inventing smart convergence medical devices; and creating an innovation-based ecosystem for the healthcare industry. In July 2020, it has evolved into the "Korean version of the New Deal Comprehensive Plan" to further strengthen support. One of them is Smart Healthcare, which directs to have a digital-based smart medical infrastructure to protect medical staff and patients form the risk of infectious disease and to increase patient’s convenience. The specific goal is first to build 18 digital-based smart hospitals so that real-time monitoring of inpatients and collaboration between medical institutions are possible. The second is to set up 1,000 dedicated respiratory clinics. It is a clinic that can check and take measures for respiratory and fever symptoms in advance and provide safe treatment when visiting the hospital. And the third is to develop Dr. Answer 2.0, a software that can accurately diagnose 12 diseases ranging from liver disease, lung cancer to diabetes, and serve as AI-powered precision medicine.

Along with the Green New Deal, the Digital New Deal is one of the pillars of the Korean version of the New Deal with an aim to lead job creation and digital transformation through the Digital New Deal. Therefore, it plans to center on investing in the entire D.N.A (Data-Network-AI) ecosystem to create new digital products as well as services, and to improve economic productivity.

Smart Healthcare is a crucial industry as a measure for medical expenses poised to increase, rapidly owing to the growing proportion of the elderly, and will prevent patients from diseases and enable complete recovery at the lowest cost in the event of diseases. Especially, one of the important characteristics of Smart Healthcare market is that it is difficult to change once customers take part in the market dominated by the ICT-based technology and platform companies. Going forward, it is hoped that the government support together with the participation of competent medical staff, scientists and entrepreneurs make South Korea an exemplary case of success in Smart Healthcare.