Promotion Strategies for u-Health Industry in Korea - Focused on the Promotion of Wellness Industry -

1. Promotion Strategies for u-Health Industry in Korea - Focused on the Promotion of Wellness Industry - 2011. 06. 09. Director, Kyung-Ryul Chung, Ph.D. Wellness Technology R&D Group Korea Institute of Industrial Technology ※ Presentation by Chunho Choi, Ph.D. Contact: cchoi@kitech.re.kr (Chunho Choi) chungkr@kitech.re.kr (Director, Kyung-Ryul Chung)

2. Contents Introduction to u-Health Industrial Policies on u-Health Industry Wellness Industry Pilot Projects on u-Wellness Business Introduction to Korea Institute of Industrial technology (Wellness Technology R&D Group)

3. I. Introduction • What is u-Health? Telemedicine TeleHealth e-Health u-Health 1970~1990 1990~2000 2000~2005 2005~ Transfer of medical information Remote medical procedures Hospital information system ubiquitous “healthcare” service Concepts Clinical information education/consulting Health informatics Mecial equipments Health informatics Medical Equipment HIS solution Health informatics Medical equipment Services system On/offline service Consumer products Resources Hospitals & Doctors Doctors/Nurses & Patient Hospitals & Solution providers Doctors/Nurses Health-related service professionals (e.g. trainers) Hospital Patient Health-conscious consumers Manufacturing company Solution providers Telecommunication company Players

4. I. Introduction • Principal paradigm shift in healthcare PLACE “Anywhere” Home Workplaces Provider SERVICE “Service Company” “Various Services” Nursing facilities Prevention Hospital Healthcare professionals Promotion Nursing care Hospital Medicinal Services (classical) Doctors Disease treatment Scheduled time After symptom Patient Disabled 24 hours ‘Post-patient’ Target Time “Health-conscious Consumers” “Whole Lifetime” * SERI Report, 2007; Modified by KITECH

5. I. Introduction • What have to be changed? Management Targets Diseases (Patients) Quality of Life (Everyone) Key Players Hospital (Doctors) Service/Product Providers, Consumers IT, Insurance, Banks, Sales Service, Marketing, etc. Employers, Consumer itself Co-payers Medical Insurence Healthcare, Life-care, Fitness, etc. Other expert services Services Medical care services Products Consumer products Intelligent living appliances Medical equipments

6. II. Industrial Policies • Ministry of Health and Welfare Investment Priorities (before 2010) (1) Digitalization of Hospital Affairs (병원전산화) * (2005~2010) 64.6 bil KRW R&D Funds • HIS (Computerized Hospial Information System) • EMR (Elctronic Medical Record) • PACS (Picture Archiving and Communication System) (2) u-Health and public healthcare services (공공의료) • More than 20 pilot projects were supported by MHW • - pilot constuction of regional u-Health networks • - u-Health services for secluded area, e.g. island • - public u-Health service models for silver citizen

7. II. Industrial Policies • Ministry of Knowledge Economy (MKE) Investment Priorities (before 2010) (1) Development of medical devices & systems for u-Health (의료기기) * (2008~2010) 44.0 bil KRW R&D Funds • Bio-sensors for u-Health monitoring system • EMR/EHR SW platform and services (2) ICT-based regional u-Healthcare research centers (시범사업 등) • About 50 projects have been sporadically supported • (Daegue, Masan, Kyunggi, etc.) * Currently about 9 pilot projects are ongoing

8. II. Industrial Policies • Ministry of Knowledge Economy (MKE) • u-Health pilot studies and researches KyungGi Taegue • Student obesity management • Workplace healthcare • Post-PC application to health • Wearable PC distribution ChungNam • Lifestyle management • Medical services for secluded Masan • Medical service for lonely • Regional medical service system ChungBuk Busan • Development of u-Health device • u-Health Data management • u-Health professional education • Emergency service • Home visiting nurse 8

9. II. Industrial Policies • Delay in utilization of u-Health industry • More than 50 pilot projects were supported, but few models are commercially available • Most u-Health service models are not allowed under current medical service acts in KOREA • - Medical information cannot be transferred outside the hospital • - 3rd party of personal medical information are prohibited • - Remote treatments are not allowed. (c.f. medical information consulting services are not prohibited, but insurance do not pay for that) • Safety and Effectiveness of u-Health services: knowledge base, evidences of validity are not currently established. • Who needs the services? And who‘s going to pay the service charges? • - Korean public medical insurance does not refund on u-Health services

10. II. Industrial Policies • Promotion Strategies for u-Health New Industry (MKE) • New view on the scope of u-Health (MKE, 2010. 05) • Cure/care → prevention/promotion • Medical market → consumers‘ market • Public welfare → Industry promotion • Public service → Private businesses

11. II. Industrial Policies • Promotion Strategies for u-Health New Industry (MKE) • Target Areas of the Policy Illness Home & Mobile u-Hospital Mobile Prescription Mobile hospital Remote collaboration Mobile-care services Homecare services Hospital Information System GIS Services Silver town Medical Smart Cards Institutional Personal Mobile Stress manager Health Counseling Mobile Fitness/Exercise Manager u-Fitness Obesity management services Wellness Wellness * SERI, 2007; Modified

12. II. Industrial Policies • Promotion Strategies for u-Health New Industry (MKE) • Market Estimation of u-Health (Billion USD) Domestic Market (KOREA) Global Market ’09 (143 Bil. $) ’12 (254 Bil. $) ’10 (1.47 Bil. $) ’13 (2.28 Bil. $)

13. II. Industrial Policies • Promotion Strategies for u-Health New Industry (MKE) • Important change in u-Health Policy : “Business Model“ • u-Health Business Model (u-Medical) Hospital Information System SmartCare Service Co. EMR/EHR/ PACS Government Medical Insurance (public) Local M.D. Patients Medical Equipments Hospitals Bio-sensors • u-Health Business Model (u-Wellness) Remote Diagnosis/ Treatments Insurance (private) Electronic Prescription Product/service/ solution providers (incl. food/sports equipments/leisure/etc.) Wellness Service Company Customers Drug Delivery system Wellness Center (Fitness, etc)

14. II. Industrial Policies • Promotion Strategies for u-Health New Industry (MKE) • New u-Health industry promotion strategy and plans

15. II. Industrial Policies • Promotion Strategies for u-Health New Industry (MKE) • Visions of u-Health New Industry (MKE, 2010. 05) VISION u-Health: a New Growth Driver in Fucture Economy Global Leader in u-Health NEW industry (u-Medical, u-Silver, u-Wellness) Becoming a leading country in u-Health industry in 2014, by reaching 5%+ global market share Economy & Industry Technology Society & Culture • Market size : 3.1+ Bil.$ • 10 Mil.$ revenue companies : 101+ • Employees : 39,000+ • Intellectual properties • u-Health biz models success example • Standardization of u-Health system • Promoting Quality of Life • Reducing healthcare insurance expenditure : up to 10% (about 3 Bil.$) • Improving working potential of Senior R&D Infrastructure Strategies Human resources Innovation HUB Deregulation (Medical service act) u-MedicalBM u-Wellness BM Pilot Study u-Silver BM Standards & Certification

16. II. Industrial Policies • Promotion Strategies for u-Health New Industry (MKE) 2010년 2014년 • Expected effects of u-Health promotion policy 1.68trillion KRW 3.03 trillion KRW 22,000 39,000 u-Health Market New employees u-Medical 0.57trillion 0.32trillion 4,200 7,300 u-Medical u-Silver 0.49trillion 0.34 trillion 4,300 6,300 u-Silver u-Wellness 1.98trilllion 1.02trillion 13,500 25,400 u-Wellness Number of u-Health service users 13.4% 23.9% Global leading company - 5 companies Reducing national healthcare cost - 3.5trillion

17. III. Wellness Industry What is WELLNESS? Definition : An ACTIVE PROCESS of BEING AWARE of and MAKING CHOICES toward a more SUCCESSFUL EXISTENCE (National Wellness Institute, USA) Our concept deployments on WELLNESS : (1) Human itself (2) Environments (3) Activities Environment Working Ergonomic, ergonomic product Air, Light, Sound environmental hygiene Sports/Leisure Entertaining, Amusement Sports leisure pleasant atmosphere physical Activity Physical/Mental/ Emotional Care Human Health management & Fitness Physical Interface (Health care Relaxation, Fitness) Ergonomic Product, Device Furniture Wellness

18. III. Wellness Industry Wellness Industry Definition: An industry which produces and distributes products and services corresponding to a new trends in consumer behavior towards quality of life, especially concerning health promotion and an ever-higher potential of functioning Health & Lifestyle Industrial Classification : • Fitness/Health Management Living & Environment Engagement & Relaxation Space Indoor Air/water quality Sanitation, etc. • Outdoor Sports Interior Furniture, Lightning Living appliances • Healthy/Functional Food and Nutrition Management • Spor-Tainments Cloth Apparel & Fashion Wearable Informatics • Beauty/Anti-Aging • Leisure/Tourism/Relaxation/Spas Human [Self-Care Industry] [Living-Care Industry] [WellnessEntertainment] • Health promotion and Physical/ Emotional Wellness Management Products and Services • Products and Services for safe, comfortable and intelligent living • Direct (outdoor) and indirect (indoor) experiences of relaxation and sports, tourism.

19. III. Wellness Industry Market Estimation (Domestic) Wellness Industry : 67.6 trillion KRW (about 45 bil EURO) c Self Care (67.6 trillion KRW) Wellness Entertainments (67.6 trillion KRW) Living Care (67.6 trillion KRW) Home Management 8.7trillion KRW Well-being Wear 8.8trillion KRW SporTainment 4.4trillion KRW Leisure/Spa 5.2trillion KRW Fitness 5.2 trillion KRW Beauty & Aesthetic 12.0trillion KRW Nutrition 7.2trillion KRW Outdoor 6.4Trillion KRW Well-being Interior 9.6trillion KRW ※ 『Promotion Strategies for Wellness New Industry』, 2011, KITECH/MKE (Analysis on Industrial Census 2008, Statistics Korea)

20. III. Wellness Industry Market Estimation (Global Market) c Spas and the Global Wellness Market: Synergies and Opportunities, 2010; SRI International

21. III. Wellness Industry • Promotion Strategies for u-Wellness New Industry • : Development of new, successful and sustainable business models [Basic structure of u-Wellness business model (Wellness u-Biz)] c • Customer Segment • Customer Relationship • Customer Channel Realationship & Interface • Activities • Resources • Partner Product & Service Customer Infrastructure Financial Value Proposition • Cost Structure • Revenue Stream

22. III. Wellness Industry • Promotion Strategies for u-Wellness New Industry • : Development of new, successful and sustainable business models [Key Success Factors(KSFs) of Wellness u-Biz model] c Wellness u-Biz Model KSF Technology Services Industry Infrastructure Policy Service Guidelines • Service • Delivery • Networks • Human • Resources • Standardization • Certification • Market • Promotion • Knowledge Base Industrialization R&D • Deregulation

23. III. Wellness Industry • Promotion Strategies for u-Wellness New Industry • : Development of new, successful and sustainable business models [Evaluation of Wellness u-Biz model] c

24. III. Wellness Industry Examples of u-Wellness Business Models : Self Care 10,000frenchise 4.3 mil customers (in Korea) 140 franchise Interactive services and insentives Systems developed according to Sports Science Minimize space requirement (100 sqrm) New CultureProposal: office ladies Customer Service Optimization Sports Engineering Design Interactive Services Ubiquitous Service Network Various user Insentives Service Network Exercise training experties Minimize operational budget Physical Activity Promotion HealthierUS 2010

25. III. Wellness Industry Examples of u-Wellness Business Models : Living Care Personalized LentalCordi Services Production to Rental Business Reducing initial cost Water Purifier Rental Services Customer Concerning Water Pollution Environment management technology Purifier cleaning Service cordi network Reducing cost Producing – Distribution – Management service supply chain Reduce Redundant Product Acts for indoor sanitary management

26. III. Wellness Industry Examples of u-Wellness Business Models : Wellness Entertainment People can enjoy golf at anywhere, anytime Virtual Reality Golfzon Reducing training and coaching fees Customer More people can enjoy golf Virtual reality technology User interface Virtual reality New places to play golf Reducing costs IT network Widespread golf citizen Promotion of sports engagemnts

27. III. Wellness Industry Promotion of u-Wellness Industry : Successful u-Biz Models Key success factors Service Contents WELLNESS Values Device/System Facilities

28. IV. Pilot Projects Promotion of u-Wellness Industry : a Pilot Study (’12~’14; MKE) Home Priscripted Data Output Center Direct Service Data Input IPTV Service System Data Input Data Input Wireless AP Priscipted Data Output AP Advanced Service Basic Service Advanced Service Smartphone Wireless AP Exercise Performance + + Students Normal Consumers Sports Community Mobile Physical Triner Basic Service Nutrion Expert Nutrition + Advanced Service TVSetopbox KIOSK PA (GIS) Exercise program performance information PC Exercise Program Guidelines Nutrition Information 활동량계 Grocery Story Restrant Cafeteria • GIS • Events/Marketing • Menus, other informants

29. IV. Pilot Projects Promotion of u-Wellness Industry : a pre-Pilot Study (2011; MKE/KITECH)

30. IV. Pilot Projects Promotion of u-Wellness Industry : a pre-Pilot Study (2011; MKE/KITECH)

31. V. Korea Institute of Industrial Technology(KITECH) KITECH was established in 1989 as the nation’s only R&D institute devoted to supporting Small & Medium Enterprises Government Sponsored R&D Education UNIVERSITY OF SCIENCE AND TECHNOLOGY (UST) Industry Sponsored R&D International Cooperative Projects/Activities Technical Support & Technology Consulting

32. V. Korea Institute of Industrial Technology(KITECH) KITECH was established in 1989 as the nation’s only R&D institute devoted to supporting Small & Medium Enterprises Government Sponsored R&D Education UNIVERSITY OF SCIENCE AND TECHNOLOGY (UST) Industry Sponsored R&D International Cooperative Projects/Activities Technical Support & Technology Consulting

33. V. Korea Institute of Industrial Technology(KITECH) KITECH has several Local Branches • Technical Support & • Technology Consulting • For local Small & Medium Enterprise • Incheon Seoul • DaeGu • R&D center : Convergence Technology • (Wellness Technology R&D Group) • * incl. intelligent robot, smart textile etc. • Ansan • Headquarter and R&D center • Cheonan • Technical Support & • Technology Consulting • For local Small & Medium Enterprise • GwangJu • Pusan

34. V. Korea Institute of Industrial Technology(KITECH) R&D Headquarter Green Chemistry & Manufacturing System Division Production Technology R&D Division Convergent Technology R&D Division • Manufacturing System R&D Department • High Temperature Processing R&D Department • Green Chemistry & Engineering Department • Green Manufacturing Process R&D Department • Gerontechnology Center • Culture Mechatronics Technology Center • Liquid Processing & Casting Technology R&D Department • Eco Materials & Processing Department • Molding & Forming Technology R&D Department • Advanced Welding & Joining R&D Department • Heat Treatment and Surface Engineering R&D Department • Convergent Textile Technology R&D Group • Applied Robot Technology R&D Group • Manufacturing Convergence Technology R&D Group • Wellness Technology R&D Group • Underwater Robot Center

35. V. Korea Institute of Industrial Technology(KITECH) Wellness Technology R&D Group (Director: Dr. Kyung-Ryul Chung) Main research Area Development of ‘Human Life Technology’to support technology innovation of Small and Medium Enterprises(SMEs) in new industry of Wellness systems • HIGH QUILITY of LIFE DAILY FITNESS /HEALTH MANAGEMENT LIVING ENVIRONMENT /WELLBEING FUTURE TREND ANALYSIS /DEMAND FORECASTING SPORTS/LEISURE • Development of • technology and contents • for Health/Physical Fitness • promotion • Organs, Nerves Skeletal • Muscle System, Exercise • Physiology • Development of premium • Household supplies for • health-conscious consumers • Ergonomics Design, • Embedded Informatics • Development of • technology and contents • for Sports/Leisure • Universal design, • IT convergence, Physical • activity science, • service business models • Demand Forecasting • Trends Analysis • Products Planning Technology Area User Analysis User Experiences Biomechanics Sports Science/Eng. Human Engineering Ergonomics Service contents Human Life Technology General-Purpose Technology System engineering Mechanical design Computer science Materials application

36. V. Korea Institute of Industrial Technology(KITECH) Wellness Technology R&D Group Members Director, Chief researcher Kyung-Ryul Chung, Ph.D. Mechanical Engineering Senior Researcher Taehwa Han, Ph.D. Medical Informatics Senior Researcher Chunho Choi, Ph.D. Physics Senior Researcher Sa Yub Kim, Ph.D. Candi. Biomechanics Researcher Chan Young Park Industrial Engineering Researcher Joon Ho Hyeong Industrial Design Researcher Seong Bin Park Industrial Engineering Researcher Hyun Mok Son Ergonomics Researcher Jong Ryun Roh Industrial Design Researcher Mi SeonJeon Computer science

37. V. Korea Institute of Industrial Technology(KITECH) Wellness Technology R&D Group R&D Projects and Results Fitness/Health management • Development of core technology for simplified physical fitness evaluation and management system. • (Supported by ISTK/MKE) (2006.1 ~ 2007.12) • Developed a handhold heart rate measurement device and designed device control interface. • Designed suitable handgrip and device control interface to minimize signal artifact and noise. • Invented a simplified fitness assessment protocol for the device • Developed contents of exercise prescription and performance management Development of a cognition-based exercise instrument (Supported by ISTK/MKE) (2008.1~2008.12) • Extracted movement elements which aids the coordination of arm/leg exercise and one’s perceptual system • Optimization of co-ordinative exercise equipment design using human body modeling • Evaluated influences of perceptual function of invented exercise performance mechanisms • Development of microwave radio-thermometry for internal temperature measurement • (Supported by ISTK/MKE) (2009. 1. ~ 2010. 12.) • Research on thermal irradiation and transmission modeling of human tissues • Developed methods for measuring temperature distribution of internal heat sources • Developed MRT(Microwave Radio-Thermometry) System : 1~3 GHz Antennae and Detectors • Developed Microwave tissue mimicking phantom : High water content/low water content tissues

38. V. Korea Institute of Industrial Technology(KITECH) Wellness Technology R&D Group R&D Projects and Results Sports/Leisure • Construction of sports science based human modeling and development of technology for evaluating physiological affects during use of exercise equipment or exercise program • (Sponsored by MCST) (2009.07 ~ 2012.06) • Human movement simulation technology for customizable design • Physiological affects simulation technology for exercise program • Commercialization technology of system design reflecting physiological affects of the system • Development of core technologies for physical fitness test and management system • (Sponsored by MCST) (2007.12~2010.08) • Developed a simplified physical fitness evaluation protocol by using a real-time oxygen uptake estimation algorithm • Developed an unified exercise monitoring device (HRM and SDM) and Smart phone based applications • Standardization of performance evaluation technology for exercise monitoring devices (Validity and Reliability Evaluation) • Invention of the base technology for the seniors’ sports products • (Sponsored by MCST)(2007.12~2010.08) • Developed guidelines for assessing fitness of senior people • Invented indoor exercising instruments for the aged and its cost Guideline • Analyzed seniors’ joint exercise and muscular activities using 3D motion analyzing system • Accumulated motor mechanics related data for the design of • resistance movement which in turn improves one’s muscular strength and muscular endurance • Achieved assessment technology for seniors’ muscular strength and • muscular endurance and invented the medical devices for rehabilitation of the seniors

39. V. Korea Institute of Industrial Technology(KITECH) R&D Projects and Results Living environment/Well-being • Invention of Duoback’s next-generation model, Design of a tilt mechanism and back support system • (Enterprise Sponsored project) (2007.7~2009.7) • Invented a Duoback’s next-generation model ‘Beta Chair’ • Invented biomechanical design guideline of office chairs • Designed mechanism of a ergonomic tilt mechanism • Designed pelvis-protective seat board • Designed seat board, back board, tilt and interlocker via human-model simulation and analysis of body pressure distribution and verified trial products Invention of super light, folding bicycle made of carbon composites (Sponsored by MKE) (2009.8~2010.8) • Analyzed serviceability of folding bicycles • Invented efficient folding principle • Invented core components of folding bicycles • Applied super light carbon composite materials • Invented eccentric wheel • Invention of environmentally-friendly and smart home appliance’ core technology • Home robotic appliance commercialization business (2006.1 ~ 2010.5) • Controlled biofeedback via assessment of one’s fundamental body information and vitality • Designed ergonomic pneumatic recliner and air seat board • Implemented customized massaging system that uses pneumatic actuator cell • Provided relaxation, enhanced one’s concentration, and relieved one’s stress by supplying a high concentration oxygen around the sitting area

40. V. Korea Institute of Industrial Technology(KITECH) Wellness Technology R&D Group R&D Projects and Results Current Projects • Sports science based human modeling • Development of new type of Folding bike (int’l collaboration) and design/biomechanical analysis of professional race bicycle • Development of bike type outdoor simulation system (contents) • Pilot study on u-Fitness biz model for workplace wellness program

41. V. Korea Institute of Industrial Technology(KITECH) Wellness Technology R&D Group Research Planning Sports Science and Technology for Sport Industry (Done) • MCST consignment R&D program planning project (2007) • [Outcome] Sports Technology R&D Program (2007~present; 8 Bil KRW/year) Industrial Technology for Wellness Industry • MKE consignment planning project : Promotion strategies for • wellness industry and planning of a new pilot project program (2010) • [Outcome] Pilot project on u-Fitness biz model for workplace (0.5 Bil KRW) • [in progress] Proposed a budget for fiscal year 2012 (8 Bil KRW/year) Other R&D and Industrial Policy Planning Activities in Progress (unofficial) • Industrial policy for aging society : Active senior and baby boomers • A new inter-ministry R&D Project : u-Health R&BD (focused on u-Wellness) • Standardization of Wellness Informatics (Supported by MKE; 2011) • Organizing a Forum for promotion of Wellness Industry (Supported by MKE)

42. V. Korea Institute of Industrial Technology(KITECH) Wellness Technology R&D Group Collaboration Network u-Wellness (Service Business Model) Wellness Service Financing Distribution Network ICT Service Providers Solution Providers Research Institutions Manufacturing

43. V. Korea Institute of Industrial Technology(KITECH) Wellness Technology R&D Group Collaboration Network Sports Engineering & Ergonomics Sports Equipment Bicycle Furniture u-Sports Research Institutions International Collaboration (Preparing)

44. Thank You Contact: cchoi@kitech.re.kr (Chunho Choi) chungkr@kitech.re.kr (Director, Kyung-Ryul Chung)