Medical imaging based on AI technology
Medical imaging based on AI technology
Business Model Description
Invest in medical imaging based on AI technology as it is one of the most mature applications of AI technology in the healthcare industry.
The business models of manufacturers in the medical imaging equipment industry are signing contracts with hospitals to offer medical imaging equipment and services; entering partnerships with hospitals to take responsibility for imaging departments; establishing independent medical imaging centers.
Technology companies focusing exclusively on AI software can cooperate with medical imaging equipment manufacturers and hospitals to achieve profits. They can sell their products to hospitals on an annual contract basis or enter partnerships with hospitals and earn revenues based on the number of patients who use their products.
Expected Impact
Improve the efficiency and accuracy of diagnosing, improve accessibility to medical data
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- China: Anhui
- China: Jiangxi
- China: Fujian
- China: Yunnan
- China: Guangdong
- China: Beijing
- China: Shanghai
- China: Shanghai
Sector Classification
Health Care
Development need
China’s health sector currently still faces many challenges, including weak capacity of grass-roots service providers, imbalanced development and resources distribution between rural and urban areas in health sector and accelerated aging trend.
The Action Plan for Promoting the Quality of Health Industry Development (2019-2022) focused on leveraging digital technology in the health care sector. On the back of COVID-19, the National Health Commission published a notice requiring the Health Commissions in all provinces to build Internet-based platforms for controlling and preventing COVID-19 as well as general healthcare
Gender inequalities and marginalization issues
(1) Medical Financial Assistance (MFA) scheme in China did not offer adequate financial protection for marginalized people. (2) Women may be at risk or at greater risk of infection due to occupational gender segregation.
Investment opportunities introduction
The tageted subregions have low economic input in the healthcare sector, yet policy focus in this area is relatively strong. This indicates that the demand for better healthcare services and the need for further investment is high.
Key bottlenecks introduction
The shortage of medical talents in quantity and poor quality structure is the bottleneck that restricts the development of China's healthcare industry.
Health Care Providers
Development need
the rapid aging trend challenges healthcare delivery; access to nursing homes remains limited; there are significant regional disparities in the distribution of health resources; around 75% of older people suffer from noncommunicable chronic diseases; the demand gap of radiologists is increasing; the cure rate of early detection of cancer is low
Policy priority
China has made significant policy efforts to improve healthcare delivery. A national action plan (2018) was issued by the National Health and Family Planning Commission, planing to make diagnosis and treatment more convenient; gradually form a new system of medical services based on regional coordination, information sharing and service integration,.
Investment opportunities introduction
the 6 IOAs with the highest growth potential were shortlisted:internet healthcare, smart information systems in hospitals, Independent Clinical Laboratories (ICL),Medical imaging based on Artificial Intelligence technology, Smart home-use medical devices for chronic disease management,Senior care.
Health Care Delivery
Pipeline Opportunity
Medical imaging based on AI technology
Invest in medical imaging based on AI technology as it is one of the most mature applications of AI technology in the healthcare industry.
The business models of manufacturers in the medical imaging equipment industry are signing contracts with hospitals to offer medical imaging equipment and services; entering partnerships with hospitals to take responsibility for imaging departments; establishing independent medical imaging centers.
Technology companies focusing exclusively on AI software can cooperate with medical imaging equipment manufacturers and hospitals to achieve profits. They can sell their products to hospitals on an annual contract basis or enter partnerships with hospitals and earn revenues based on the number of patients who use their products.
Business Case
Market Size and Environment
USD 100 million - USD 1 billion
> 25%
The size of the market is estimated to reach RMB USD 150 M by 2022 while the CAGR is 40%.
Source: iResearch, Global Market Insight
Indicative Return
20% - 25%
Experts estimated that the potential rate of return in this investment opportunity would be 20 – 30%. Some of them mentioned that the leading industry players had achieved high profits but many more companies were struggling.
Wandong Medical (600055): Net profit margin: 16.80% (2019), 15.63% (2018), 11.44% (2017) ROE: 8.42% (2019), 8.07% (2018), 6.00% (2017)
Investment Timeframe
Short Term (0–5 years)
According to experts’ estimate, it would take 3-5 years for investors to see positive net profit margin in this investment opportunity area.
Based on our desk research, most of AI medical imaging companies are still in deficit, but Unimed (founded in 2014) and Jianpei Technology (founded in 2012) have announced that they have made profits in 2018. Therefore, the conclusion is that at least 4 years will be needed for investment timeframe.
Ticket Size
Experts estimated that the potential rate of return in this investment opportunity would be 20 – 30%.
Impact Case
Sustainable Development Need
The annual growth rate of radiologists in China is 4.1%, far lower than the growth of imaging data, and the demand gap is increasing. The insufficient number of doctors leads to heavy workload of doctors, and overload work also leads to the increase of misdiagnosis rate.
Gender & Marginalisation
People in remote and poor areas do not have access to medical imaging technology.
Expected Development Outcome
This technology provides clinical decision support for doctors by improving the efficiency and accuracy of diagnosing.
Accessibility is also improved with the help of cloud platform and third party medical imaging centers.
Gender & Marginalisation
More patients in remote areas can enjoy this medical imaging based on AI technology to prevent and treat diseases.
Primary SDGs addressed
3.8.1 Coverage of essential health services
3.8.2 Proportion of population with large household expenditures on health as a share of total household expenditure or income
Secondary SDGs addressed
Directly impacted stakeholders
People
Corporates
Indirectly impacted stakeholders
People
Public sector
Outcome Risks
At the current stage the assistance given by AI is limited and the majority of work is still done by doctors. This will restrain the development of this investment opportunity area as expected.
Impact Risks
If AI systems start making autonomous decisions about diagnoses, a problem is whether the radiologist, the device itself, or the designer/builder is to be considered responsible.
Impact Classification
What
The outcome is very likely to be positive and important because the investment can offer more efficient diagnosis for patients.
Risk
At the current stage the assistance given by AI is limited and the majority of work is still done by doctors. This will restrain the development of this IOA as expected.
Impact Thesis
Improve the efficiency and accuracy of diagnosing, improve accessibility to medical data
Enabling Environment
Policy Environment
(Policy document): In May 2016, the National Development and Reform Commission published the first strategic plan exclusively focusing on the development of AI applications in China. In this plan, healthcare was highlighted as a key industry.
(Policy document): In December 2017, the Ministry of Industry and Information Technology published a three-year action plan for promoting the development of a new-generation artificial intelligence industry.
(Policy document): n April 2018, the State Council identified AI applications as one of the seven focal points to promote within the Internet healthcare service market.
Financial Environment
Fiscal incentives: A reduction of the enterprise income tax rate, from 25% to 15%, is available for companies that fulfil requirements set by the government, including the number of patents and the ratio of scientific research employees.
Regulatory Environment
(Regulation): The regulation of medical imaging services remains at a moderate level, but clear technical requirements have been issued for companies in this sector.
Marketplace Participants
Private Sector
Internet giants, medical equipment manufacturers, investment institutions
Government
Government guidance funds
Target Locations
China: Anhui
China: Jiangxi
China: Fujian
China: Yunnan
China: Guangdong
China: Beijing
China: Shanghai
China: Shanghai
References
- (1) Ministry of Foreign Affairs,2019 https://www.fmprc.gov.cn/mfa_eng/topics_665678/2030kcxfzyc/P020190924780823323749.pdf "2) UNDP.2019 https://www.cn.undp.org/content/china/en/home/library/human_development/national-human-development-report-special-edition.html"
- (3)UN Women. (2020). Policy Brief: The Impact of Covid-19 on Women and Girls. UN Women.
- (21) Sohu, 2017, https://www.sohu.com/a/208789603_204078
- (22) Tencent, 2020, https://xw.qq.com/cmsid/20200303A094U800
- (23) Tencent, 2019, https://new.qq.com/omn/20190523/20190523A0M4Q9.html?pc
- (24) the State Department, 2015, Made in China 2025 (《中国制造2025》) ,http://www.gov.cn/zhengce/content/2015-05/19/content_9784.html
- (25) National Development and Reform Commission, 2016, Internet+ artificial intelligence three year action plan (《互联网+ 人工智能三年行动实施方案》), https://www.miit.gov.cn/n1146290/n1146392/c4808445/part/4808453.pdf
- (26) Ministry of Industry and Information Technology, 2017, Three year action plan for promoting the development of new generation artificial intelligence industry (《促进新一代人工智能产业发展三年行动计划》), http://iot.china.com.cn/content/2017-12/15/content_40107109.html
- (27) State department, 2018, Opinions on promoting the development of Internet healthcare (《关于促进“互联网+医疗健康”发展的意见》) , www.gov.cn/zhengce/content/2018-04/28/content_5286645.html
- (28) NCBI, 2018, "Artificial intelligence in medical imaging: threat or opportunity? Radiologists again at the forefront of innovation in medicine", https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6199205/