Keeping a finger on the pulse

Latin America’s health tech revolution continues apace.

Venture capital (“VC”) is pouring into Latin America’s healthtech scene as Covid spurred remarkable innovation and growth across the region. Take ZS for example, a professional services firm where in Argentina the company is working to embed long lasting tech-enabled solutions and is working with some of the largest drugmakers in the region. In Puerto Rico, cell therapy company Cytolmmune Therapeutics is developing natural killer immunotherapies which utilise a patient’s own immune system to destroy cancer cells. What’s next for the sector?

A physician and healthcare manager based in Chile explained, “I believe that 2022 will be a year of maturing healthtech regulations. In Brazil in 2020, the healthtech sector received investments of some BRL 500 million from VCs. Countries such as Peru and Ecuador are smaller healthtech ecosystems but even for them this year will be one of growth and investment, provided the government supports the sector.”

“I believe that 2022 will be a year of maturing healthtech regulations.”

Physician and healthcare manager, Chile

Notably, the sector experienced rapid growth even before the pandemic. Between 2014 and 2019, the number of healthtech startups in Brazil more than doubled from 160 to 389 companies. The sector also saw healthcare-adjacent companies, gyms for example, shifting towards healthcare provision. Brazil’s gym subscription unicorn, Gympass, effectively pivoted to include remote nutrition and mental health services to its customers during the height of the pandemic.

Geography has also spurred innovation – many people across the region are unable to access suitable clinics or those that are more specialised may be hundreds of kilometres away. In Mexico, the mental health startup Yana benefited from allowing people to access consultations online. Further south in Chile, tech innovation is starting to be applied to the health insurance sector.

A regulatory health expert in Chile explained, “The adoption of electronic prescriptions for paid sick leave is showing great promise as a means for both healthcare insurance companies and the government to effectively reduce paid sick leave fraud, by identifying perpetrators and applying sanctions. Other tech, such as machine learning models are able to accurately predict the risk of individual clients based on factors other than age and previous health-related events, such as address, level of education, or income are still not the norm.”

“Other tech, such as machine learning models are able to accurately predict the risk of individual clients.”

Regulatory health expert, Chile

Despite the excitement, healthtech has not been quite the gamechanger forecast, especially in rural areas where the digital divide remains stark. The regulatory health expert explained, “The main quagmires in the health sector are still the rise of chronic illnesses regarding lack of physical activity and low-quality food – this affects poorest communities the most. At the Latin-American level the situation may vary, since most of the region still struggles with undeveloped country epidemiology, mainly effected by social determinants of health.”

Many regional healthtechs are now raising large amounts of capital through investment rounds and are increasingly looking to acquire competitors. Brazil’s Alice – a primary health insurance provider – acquired Cuidas – a corporate health programme – recently whilst Chile’s Grupo Inexoos plans to expand across Latin America primarily through acquisition. Before healthtechs get too carried away with a frenzy of acquisitions, they need to surmount a more practical obstacle – integrating healthcare records. “That’s a must if we want to see growth in the local healthtech markets,” says the regulatory health expert.

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