How Digital Tools Could Boost Efficiency In African Health Systems

By expanding their use of digital health tools, African health systems could realize up to 15 percent efficiency gains by 2030 and reinvest the savings to improve access and outcomes.

The COVID-19 pandemic highlighted the impor­tance of digitalization in supporting access to essential healthcare services in the most remote areas. With the largest disease burden globally and the most limited healthcare resources, Africa has an opportunity to use the lessons learned during the pandemic to expand its use of digital health tools (see sidebar “What we mean by ‘digital health tools’”).

Although digital health in most African regions is still in its infancy, advances in smartphone con­nectivity, data management policies (including to boost interoperability, privacy, and security), and data infrastructure are starting to change the ways health systems work in Africa. And rapid expansion in other areas, such as mobile financing, shows that leapfrogging is possible.

It is clear that digital health tools could play an important role in boosting health system perfor­mance in Africa, but they could also help improve efficiency. First, they could improve access to essential health services, especially for hard-to-reach populations, women, refugees, persons with disabilities, and lower-income households. In most sub-Saharan countries, more than 20 percent of the population lives more than two hours away from essential health services.1 Access is further limited by low ability to pay and relatively high cost of care. Second, improved access to patient data could help care providers make more accurate diagnoses and more effectively tailor interventions to prevent or treat disease. Digital tools could also make it easier for patients to comply with treatment plans; in 2018, a study found that only about 45 percent of clinical guidelines for many common conditions were followed in several African countries.2 Third, digital health tools could strengthen health systems’ resilience by boosting their ability to identify, respond to, and recover from health emergencies.

Finally, digital health tools could help health sys­tems deliver care at better quality, faster, and at lower cost and thereby optimize constrained resources, including a shortage of healthcare professionals, especially in rural areas. This article focuses on measuring the impact of this fourth lever by quantifying the efficiency potential of implementing digital health tools.

We conducted an analysis to quantify the financial impact digital health tools could have in Kenya, Nigeria, and South Africa. Our findings indicate that these countries could capture efficiencies of up to 15 percent in total healthcare expenditures by 2030 (see sidebar “Methodology for calculating potential efficiency gains in 2030 total healthcare expenditures”).3 We chose these three countries for our analysis because they accounted for 85 percent of digital health start-up funding in Africa in 2021, and they have granular healthcare spending data available for analysis.

The potential efficiency gains, which could be realized without compromising quality and out­comes, vary by country. In 2030, widespread adoption could unlock $400 million to $2.5 billion in Kenya (4 to 14 percent of total projected healthcare spending), $700 million to $3.3 billion in Nigeria (4 to 10 percent of total projected healthcare spending), and $1.9 billion to $11 billion in South Africa (6 to 15 percent of total projected healthcare spending) (Exhibit 1). These gains could be reinvested in other high-priority areas to increase overall health outcomes and finance the implementation and maintenance of digital health tools. Finding efficiency gains is especially critical in budget-constrained countries, which includes most countries in Africa. Only a few African countries meet the 2001 Abuja Declaration target of allocating 15 percent of public expenditures to health.4

In this article, we outline sources of potential effi­ciency gains in the three countries, current opportunities to expand digital health, and actions that could accelerate and support digital health adoption.

Sources of efficiency gains

We have identified six categories of digital health tools that could create efficiencies: virtual inter­actions, paperless data, patient self-care, patient self-service, decision intelligence systems, and workflow automation (Exhibit 2). According to our analysis, shifting to virtual interactions and going paperless are the main drivers of potential healthcare expenditure efficiency gains in Kenya, Nigeria, and South Africa. While most care is delivered today in community and primary-care settings, these tools could be beneficial to varying degrees across care settings, from primary to tertiary care, and with increasing magnitude through 2030.

Virtual interactions

Virtual interactions account for approximately 43 percent of potential efficiency gains in Kenya (up to $1.1 billion), 35 percent in Nigeria (up to $1.2 billion), and 39 percent in South Africa (up to $4.3 billion) in 2030. These derive mainly from three types of patient-facing solutions:

Teleconsultation. Teleconsultations—remote inter­actions between healthcare professionals and patients, particularly for minor health issues or follow-ups—are the leading virtual-interaction tool with respect to potential efficiency gains. Additionally, patients enjoy the convenience and time savings. Broader adoption of teleconsultations could help reduce emergency admissions, improve chronic-disease management, and expand care access. Tele­consultations can also support task shifting (redistributing tasks among health workforce teams), although this was not considered in our analysis.

Remote monitoring. Remote monitoring of vital signs and symptoms could help providers more cost-effectively manage patients with one or more chronic diseases such as diabetes, congestive heart failure, and chronic obstructive pulmonary disease. Broader adoption of monitoring technol­ogies in Africa could help reduce emergency-room care and hospital admissions, help caregivers and patients better control chronic diseases, and enable earlier interventions.

Electronic triage. Electronic triage refers to the use of AI-based online tools or phone services to determine up front whether patients need to visit an emergency room, consult with their primary-care providers (PCPs), or schedule a follow-up consul­tation with their caregiver. It could also help reduce nonurgent emergency-department visits, thus speeding up care for those most in need.5

Virtual interactions account for approximately 43 percent of potential efficiency gains in Kenya, 35 percent in Nigeria, and 39 percent in South Africa in 2030.

To see the complete report: McKinsey.com

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