INTERNATIONAL O.R.: International consortium focuses on healthcare

Taiwan-based initiative links AI and blockchain with retail and finance models to transition healthcare to predictive, preventive, personalized and participatory care.

Taiwan still faces major challenges in healthcare – a rapidly aging society and the rising burden of diseases. Image © Wang Tom |

Taiwan still faces major challenges in healthcare – a rapidly aging society and the rising burden of diseases. Image © Wang Tom |

By Grace Lin, Ko-Yang Wang, Ya-Hui Chan, HanChao Lee and Shawn Liou

A recent New York Times article [1] cited Taiwan’s government-run single-payer National Health Insurance (NHI) as an instructive model for the United States. In 2013, Taiwan’s personal healthcare expenditure was $1,166 per person, totaling about 5.1 percent of its GDP [2]. This figure is much lower than the U.S.’s $9,255 per capita in 2013. Taiwan’s NHI’s administrative budget only made up 1.07 percent of total NHI expenditures in 2014. The NHI’s IT system also provides near real-time information on expenditures, utilization and public health emergencies such as outbreaks of influenza and avian flu [3].

However, Taiwan still faces major challenges in healthcare – a rapidly aging society and the rising burden of non-communicable diseases. From 1996 to 2013, while Taiwan’s GDP rose by about 50 percent, average personal healthcare expenditure nearly doubled. This increase in per capita expenditure was largely centered on the over-60-year-old population [2].

While Taiwan’s elderly population (65 years or older) accounted for only 10 percent of its population in 2011, it made up 34 percent of the NHI’s total expenditure. The elderly population is expected to reach 14 percent by the end of 2018, making it an officially “aged” society in just 25 years, much faster than any other developed country. The ratio is expected to rise to 20 percent by 2025, making Taiwan a “super-aged” society in just seven years [4].

Taiwan is becoming the fastest aging society in the world, and its medical expenditures will increase rapidly with this demographic transition. Rising non-communicable-diseases (NCD) accounted for 79.3 percent of all deaths in Taiwan. According to the United Nations’ 2030 Agenda for Sustainable Development [5], NCDs are recognized as a major challenge for sustainable development. The factors that might cause NCDs are varied and sometimes even controversial, thus making their control and prevention challenging. For instance, tobacco addiction, the harmful use of alcohol and unhealthy diets all increase the risk of dying from a NCD, yet none can be easily eradicated.

To deal with these crises, Taiwan must find innovative ways to keep its population healthy and care for its elderly people. In order to accomplish this goal, Taiwan needs to leverage smart IT systems as well as community-based outpatient and elder-care systems that support healthier lives for the elderly and other residents. The co-authors also propose to integrate related retail and commerce services and associated financial services to handle medical- and healthcare-related expenses and insurance.

The co-authors recently formed the International AI and Blockchain Consortium (iABC) for Advancing Healthcare and Wellness, jointly launched by Asia University (AU) and the Chinese Medical University (CMU). The consortium is led by Grace Lin, VP, Asia University, an INFORMS Fellow and former INFORMS Board Member, vice president for International Affairs and VP for Practitioners. iABC is supported by the Taiwan Ministry of Science and Technology’s Global Research & Industry Alliances (GloRIA) program.

GloRIA was recently established to help enterprises embrace the industry revolution and the smart digital economy, and to facilitate R&D collaborations between universities and companies, as well as to commercialize technologies developed by academic researchers. The iABC brings together experts from across disciplines, industries and institutions around the world to bridge the gaps between emerging technologies and healthcare practice. Based at Asia University, Taichung, Taiwan, and the Chinese Medical University and its 14 affiliated hospitals, the consortium is a hub for research and development in human-centric, proactive healthcare, and the associated new retail and financial technologies (FinTech), and uses emerging technologies including big data analytics, operations research, artificial intelligence, blockchain, cloud computing and the Internet of Things (IoT).

The key aspects of the initiative are as follows:

1. The co-authors have built a dynamic joint R&D team from universities, companies, research labs and global associations with extensive cross-disciplinary experience. Our leadership in business management, state-of-the-art technology, integrated solutions and transformative consulting will help healthcare, wellness and related industries.

2. AU & CMU’s research centers have the capabilities to comprehensively combine emerging technologies with healthcare and wellness. These technology centers include Big Data Research, FinTech and Blockchain, Innovation and Circular Economy and 3D printing. Centers for health and wellness conduct research at the frontiers of medicine, including food safety, edible medicinal, precision medicine and Chinese medicine research.

3. Our global R&D partner platform, together with the Asia University Hospital, 14 Chinese Medical Hospitals affiliates and CMU’s $1 billion Smart Healthcare Campus investment in Taichung is posed to provide a unique living lab for healthcare and wellness, omni-channel new retail and FinTech solutions and services.

4. Demo labs will be set up in Taipei and Taichung to showcase innovative technologies and integrated healthcare, new retail and FinTech solutions, helping to connect small- and medium-size enterprises (SMEs) in Taiwan’s central and northern regions to encourage innovation and partnerships for business growth. This ecosystem approach presents a unique opportunity for SMEs to collectively build a global healthcare and wellness brand.

Propelled by a vision for a better world in collaboration with our global partners, the consortium will also provide training and talent cultivation services and set up programs to incubate innovative startups. The consortium leadership team hopes that this International AI and Blockchain Consortium (iABC) for Advancing Healthcare and Wellness will become a model for a number of collaborative, cross-disciplinary global efforts.

Solution Approach: Integrated Healthcare, Retail and FinTech

Business model innovations enabled by technology advances have disrupted the healthcare, retail and financial industries. Holistic healthcare focusing on predictive, preventive, personalized and participatory care (the 4Ps of healthcare) is becoming the center of healthcare management. A survey by Frost & Sullivan [6] demonstrates this trend in healthcare expenditures. In 2007, the major expenditure (70 percent) was for treatment, while the remaining 30 percent broke down into 15 percent for diagnosis, 10 percent for monitoring and 5 percent for prevention. In 2012, the portion for treatment decreased to 60 percent, while the rest increased: 19 percent for diagnosis, 12 percent for monitoring and 9 percent for prevention.

The treatment portion is expected to decrease dramatically to 35 percent in 2025, with 27 percent for diagnosis, 16 percent for monitoring and 22 percent for prevention, which indicates that people are increasingly more willing to pay attention to their health status in their daily life, and that healthcare providers are shifting resources from treatment to prevention and wellness. Emerging technologies have been used to monitor and analyze not only traditional health indicators such as blood pressure, heart rate, blood sugar and other basic biometrics, but also lifestyle, including diet, exercise, fitness level, sleep quality, mind and body balancing, as well as the external environmental factors in order to maintain healthcare’s 4Ps.

To achieve these 4Ps, products and services ranging from healthy food and supplements, exercise equipment and monitoring devices to medicine, medical devices and more importantly, medical personnel including doctors, nurses, caretaking, nursing or home service, are needed. A new omni-channel retail business model, called Consumer to Business (C2B) and Consumer to Manufacturing (C2M), together with coordinated product and service matching to provide right time service, is highly necessary. FinTech can play a fundamental role in providing seamless financial services. Crypto-currencies and innovative bounty programs can be used to reward healthy lifestyle, diet, exercise, self-help, mutual help and other medically non-traditional forms of care. They can also be used as the utility to reward users’ contributions to omni-channel healthcare-related commerce and services.

Figure 1: The solution approach – integrated healthcare, retail and FinTech.

Figure 1: The solution approach – integrated healthcare, retail and FinTech.

To realize the benefits of cross-industry innovations, the consortium leadership team designed a Smart API-enabled Cyber-Physical System (CPS) platform to support human-centric healthcare connecting hospitals and care facilities with new commercial and financial services as shown in Figure 1.

At the center of the smart healthcare CPS is a blockchain-based private data vault in which data both inside and outside hospital walls, collected from environmental sensors, medical history, equipment readings, wearable devices, online buying histories, social networks, app data and other resources can be collected, stored and analyzed (Figure 2). It will allow the users to make data-sharing decisions. Consolidating medical records, insurance claims, food or production records into a consistent and reliable immutable ledger makes it possible for AI techniques to more effectively detect fraud, and identify and manage health risk factors. Also, by securing insurance (and reinsurance) contracts on the blockchain, the flow of information and payments between insurers and the insured can be streamlined and automated, speeding up claims processes, increasing customer satisfaction and reducing costs. Healthcare providers can receive insurance payments faster, and users can be relieved of payments before insurance settlements.

New Healthcare, Retail and FinTech Initiatives

Figure 2. A framework to support “New Health,” “New Retail” and “New Finance.”

Figure 2. A framework to support “New Health,” “New Retail” and “New Finance.”

To realize our vision of human-centric, connected healthcare focusing on enabling the 4Ps stated above, iABC is working together with AU’s Big Data Research Center, AU FinTech and Block Chain Research Center, Fusion$, AU Hospital and CMU hospital to design a smart API-enabled CPS platform to support smart hospitals and long-term care facilities. In addition, the consortium leadership team is actively seeking partners to build a new healthcare ecosystem with academia and industry. Following are three ongoing efforts with partners respectively in the retail, public service and banking areas.

Healthcare cross-border O2O commerce: After the launch of iABC early this year, the co-authors embarked on an effort with a partner in a conventional industry in Taiwan. The company’s products include sport and leisure equipment, outdoor activities, green and energy saving, safety protection, and healthcare and medical products with revenue of more than $1 billion, and its manufacturing and customers are mostly in Taiwan and China, supplemented by South Asia. Facing the severe challenges of labor-intensive work, as well as labor force attrition due to low birth rate and low profit margins in this conventional industry, the company is determined to transform into a global ecosystem service company by embracing emerging AI and blockchain technology to build a new cross-border O2O (online to online) healthcare commerce business.

Figure 3: Omni-channel token economy powered by analytics, AI and blockchain.

Figure 3: Omni-channel token economy powered by analytics, AI and blockchain.

As shown in Figure 3, the consortium leadership team designed a new retail business model to support omni-channel commerce and provide high-quality products and timely services focusing on personal health using a combination of innovative business models including the traditional B2C ecommerce, B2B2C and M2C, as well as C2B and C2M with high security and privacy protection. O.R., analytics and AI are central to the many-to-many smart matching and reward/incentive setting for all ecosystem participants, including suppliers, manufacturers, retailers, distributors and platform providers, as well as the customers. Blockchain technology ensures privacy protection, security and, most importantly, it effectively enables the new C2B and C2M business models.

The consortium leadership team is currently studying reward/incentive token distribution mechanisms. Many interesting and challenging questions remain, such as how to define and measure each participant’s contribution to the system, how to determine optimal incentives to encourage positive outcomes and ensure win-wins for all participants in this new retail system.

Time bank for long-term care volunteers: Long-term care/aging care is a labor-intensive industry in which limited funding and a lack of skilled workers have become major hindrances. A viable volunteer program is essential to encourage public participation. With iABC and Fusion$ technology, a public service agency is set to establish a virtual time bank to issue time tokens for a reward-based volunteer program. Volunteers could earn time tokens by working hours in different kinds of services certified by various service organizations, then deposit these time tokens into time banks through smart contracts with various terms and conditions under a blockchain-secured infrastructure.

Next, volunteers could exchange tokens for others’ working hours or other rewards. For example, 100 tokens could be exchanged for care service for a parent or a one-hour massage, or 10 tokens for a relaxing cup of coffee. Also, tokens could be transferred to others through time banks or kept for future use based on T&Cs recorded in smart contracts. This time-bank mechanism is not only reciprocal, but also cultivates an altruistic social welfare system by creating an environment of shared economy and mutual care. Similar to the omni-channel token economy above, smart matching and incentive setting for different service types and personal needs to ensure optimal service and system performances are critical to the system performance.

Big data credit analysis service and supply chain finance: Next-generation financial services are promising but remain inchoate for most traditional banks. iABC has drawn a blueprint for a bank in the Pacific islands to begin using FinTech and applying data in non-traditional ways. More than 50 credit rating methodologies have been tested and classified. With the help of new credit analysis technology, multiple variables and parameters are evaluated to simulate, analyze and predict customer behavior. This credit analysis makes a 360-degree view of any individual client possible and develops uniquely rich customer profiles by connecting the dots between basic information, transaction history and repayment capacity, as well as external information.

The ongoing project is expected to enhance credit rating accuracy and facilitate the lending process. This work is also being extended to take into account market conditions and supply chain information for small and medium enterprises, and it will form the basis of supply chain finance. The combination of supply chain risk, financial conditions and blockchain-enabled cross-border, direct payments bypassing intermediate systems (such as credit card services) has great potential to disrupt the current finance model.


In summary, healthcare innovation is essential to the world’s well-being. New retail and new finance models must work in tandem with new healthcare to enable the critical healthcare transition to the 4Ps. Smart capabilities offered by O.R., analytics and AI, together with blockchain’s secure, privacy protection and smart contracts, offer tremendous opportunities for business model innovation. iABC was formed to collaborate with academia and industries around the world using an open ecosystem approach, leveraging emerging technology for a better world. In taking our first steps, the consortium leadership team welcomes collaborations with OR/MS professionals for major contributions in critical healthcare areas. Our team can help connect university researchers to Taiwan’s world-leading manufacturing companies in IoT, mobile devices, precision machines, healthcare, retail, finance, FinTech and other industries to establish joint research projects. The team can also facilitate connections between Taiwanese AI, blockchain, healthcare and wellness researchers and global companies. For more information, contact Professor Grace Lin. ORMS

Grace Lin ( is a vice president with Asia University where she is director general for the Big Data Research Center and the FinTech and Blockchain Research Center. She is also a chair professor at Asia University and the Chinese Medical University. Dr. Lin’s experience includes five years as a VP at Taiwan’s Institute for Information Industry (III), as well as 16 years at IBM, where she served for more than six years as the Global Sense-and-Respond Value-Net leader and as CTO and director for Innovation and Emerging Solutions at IBM Global Business Services. She is a member of the IBM Academy of Technology and an IBM Distinguished Engineer.

Ko-Yang Wang, Ph.D., is founder and chairman of the FinTech startup, Fusion$ in Taiwan that is developing an API-based financial innovation platform to support inclusive financial and associated services. He is also chairman of the Taiwan FinTech Association. Dr. Wang previously served as an EVP at III, and before that, he was a partner and practice leader for business process management at IBM Global Business Service.

Ya-Hui Chan is a director of big data analytics and service model design at Fusion$ She was an associate professor at Asia University from 2016-2017, and a manager and researcher at the Advanced Research Institute and Data Analytics Technology and Applications Institute at III.

Han-Chao Lee is a VP at Fusion$ on temporary assignment at iABC, Asia University, as a chief strategy officer with a focus on blockchain research and development. Previously, he was a deputy director general of the Data Analytics Technology and Applications Institute and the Cloud System Software Institute at III.

Shawn Liou is a director at Fusion$ on temporary assignment at iABC, Asia University, as a chief innovation officer. He is also the secretary general of Taiwan FinTech Association. Previously, he served as a section manager at III.


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