Digital healthcare is the intersection between two giant sectors—life sciences and technology. The lightning pace of technological and medical advances, increased healthcare spending and the needs of a growing and aging global population mean that digital healthcare is about to become a major sector in its own right.
Our survey found a striking level of optimism about this change in the landscape, with more than 90 percent of respondents saying that digital healthcare now plays a key role in their overall business strategy.
Market moves The opportunities emerging from this sector are vast. A recent study from BCC Research estimated that the market for medical devices, healthcare applications and related technology would have an annual compound growth rate of approximately 55 percent between 2013 and 2018—rising from US$2.4 billion to US$21.5 billion.
As the global population grows, the world’s healthcare budgets are becoming more and more constrained. The National Health Service in England will face a £30 billion funding gap by 2020 – 21, according to some estimates. The US currently spends around 18 percent of its GDP on healthcare each year, and there are likely limits to how much more this spending can increase.
Pioneering companies with the vision to stake a claim in this brave, new medical world are beginning to see the opportunities that digital healthcare offers. More than 7,500 start-ups around the world are developing new digital healthcare solutions, according to data from the StartUp Health Network.
The exciting potential for digital healthcare includes the development of technologies that can transform patient outcomes and the global healthcare ecosystem. Technological solutions can make healthcare costs plummet (a recent Goldman Sachs report found an opportunity to save approximately US$305 billion through digital healthcare in the near future), thus also granting more people greater access to treatment.
The American Medical Association’s Accelerating Change in Medical Education program is helping to fund new medical school classes to teach how technical solutions can provide better care for patients.
At the same time, the Massachusetts Institute for Technology has even begun staging healthcare “hackathons”, where computer programmers collaborate intensively over a 24-hour period to look for better ways to manage hospital IT or monitor chronic conditions such as diabetes.
The journey begins
According to our survey, technology companies are currently ahead of their life sciences counterparts in preparing for a digital future, with 62 percent saying they have well-developed plans to bring new digital healthcare products to market. “There is no question that digital healthcare is the way forward,” said one Vice President of Healthcare and Life Sciences at a technology company. “It is reducing death rates, hospitalizations and healthcare costs. It is an exciting area of growth for us, and we are completely focused on getting our product to market as fast as possible.”
Among life sciences companies, 37 percent gave the same answer, with a further 30 percent saying they are still evaluating priorities or are at an exploratory, planning or pilot stage.
A number of trends are driving rapid development in this sector and drawing in players who might previously have remained on the sidelines. These trends include wearable technologies such as fitness trackers, biosensors that monitor the vital signs of people with heart disease, and other innovations, such as ingestible devices that measure medication levels, with revolutionary potential to alter how patients and their healthcare providers monitor and treat diseases.
These new wearable monitors are, in turn, connected to a new generation of data collection software, capable of gathering and processing vast amounts of individuals’ health information to understand more details of disease progression, symptom triggers and the efficacy of treatments. In the immediate future, this new field of “big data” or predictive analytics is set to become one of the most effective and lucrative elements of digital healthcare.
Decades after it was first discussed, remote monitoring and mHealth is finally coming into its own, transforming functions such as the transmission of scanned images between doctors and the availability of expert medical assistance for elderly, housebound and geographically isolated individuals.
■ Nine out of ten companies say digital healthcare plays a key role in their overall business strategy ■ Most companies predict big data analysis will generate the most growth in the next five years; but the focus over the next two decades will then shift to remote monitoring and ”mHealth,” healthcare delivered using mobile devices ■ Generation Xers (those born between 1965-1981) are expected to be the biggest adopters of digital healthcare consumer products within the next five years ■ 62% of technology companies have a well-developed digital healthcare strategy, compared with 37% of life sciences companies
Big data is big news
Big data technology can help improve early diagnosis and prevent the development of more serious conditions. Among our survey respondents in both sectors, 29 percent identified big data as the most important element of digital healthcare over the next five years, with digital patient engagement (27 percent) and health outcome management (23 percent) close behind.
Dimitrios Drivas, White & Case’s Global Intellectual Property Practice Leader, explains the opportunities that this big data revolution can bring. “New businesses focusing on chronic disease management will be able to gather data from thousands or even millions of patients, evaluate various treatment pathways based on patient responses, and thus identify the optimal treatment options for particular individuals,” he says. “I think we may see a range of new and different players entering this field, leading a global healthcare transformation.”
Survey respondents echo this view. “The availability of analytics software has boosted the confidence of healthcare providers,” said one Vice President of Strategy, Innovation and Architecture in a life sciences company that is already marketing digital healthcare technology. “Doctors feel they have a better understanding of patient behavior, a better framework for introducing new treatments and improved quality of care.”
Remote monitoring is closer
According to the US Centers for Disease Control, more than half of Americans live with a chronic medical condition. Our survey respondents see monitoring these problems as the next boom area for digital healthcare solutions, with more than half of respondents citing remote monitoring and mHealth as the highest growth area over the next 20 years.
This idea of remote monitoring as the major growth area in the next 20 years fits well with the therapeutic area in which most respondents say digital healthcare will play the greatest role in the next two decades: preventive healthcare. For example, remote monitoring could help patients prevent medical problems by watching key indicators, such as blood pressure and glucose levels.
“At the moment, people don’t see the connection between the way they live and the diseases they suffer,” said one Director of Digital Strategy at a life sciences company currently piloting a variety of new products. “We need to encourage them to get involved in maintaining their health or recovering from whatever condition has affected them.”
Demographic spread Over the next five years, our survey respondents do not expect digital healthcare to be spread evenly across all age ranges. Nearly all (95 percent) of those surveyed believe that the “Generation X” (those born between 1965 and 1981, who are now aged 34 to 50) will be high users of digital healthcare technologies in the next five years.
In contrast, 30 percent of respondents predicted high usage among “Baby Boomers” (who are now more than age 50) over the next five years, while nearly three-quarters of respondents expected a high level of usage among “Millennials” (who are now less than age 34).
However, Heather McDevitt, White & Case’s Global Pharmaceuticals and Healthcare Industry Group Leader, believes the move toward digital healthcare ultimately will not be specific to one particular demographic and will cut across all three age groups—potentially transforming the lives of millions of people. “Digital healthcare can provide better healthcare access for communities that have been underserved for geographic or socio-economic reasons,” she says. “If these developments can be used to provide services for people without the need for constant doctors’ visits, it could transform how we treat certain chronic conditions. Remember, we will have an additional 500 million people aged over 50 by 2025. This is a huge opportunity for companies at the intersection of healthcare, pharmaceuticals and technology to treat illness in less costly and more beneficial ways.”
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