Nowadays digital health is a trending topic but how are new technologies changing our medical experience? In this article, we show you the market situation, some notable innovations of digital health and why it has become an investment trend, which we focus on for our next roadshow.
What is digital health?
The term Digital Health is broadly defined and often used interchangeably with mHealth, telehealth, or especially eHealth. All of them use information and communication technologies. Furthermore, they aim to improve the quality, efficiency and reduce the costs of healthcare. A reason for the rise of digital health is the rapid spread of internet usage, mobile devices, and social networking.
You cannot regard digital health separately from conventional health. Indeed, health is the most essential good everyone has. Therefore it’s not surprising that it is the most popular and one of the most thoroughly researched scientific topics.
Despite the global health improvement, we are still facing some major healthcare challenges – such as fighting diseases like HIV/AIDS or finding a better cure for cancer. Tackling those challenges will need a different approach and digital health will be involved in this approach.
To increase efficiency, we will need radical improvements in how healthcare systems acquire and use information related to our health. As an illustration, we could observe over the last decade how the extended use of mobile devices has been transforming the channel of communication between doctors-to-doctors or doctors-to-patients, referred to as mHealth.
Time has proven that eHealth (healthcare practice supported by electronic processes and communication) and mHealth have both become an integral part of our everyday life. These technological means are being used to save lives more effectively, without having any restrictions due to isolated locations or weather conditions. A good example of this notion is the AKDN eHealth program in South and Central Asia, where communications technologies help to link health institutions and health providers, minimizing the barriers of distance and time.
Notable innovations
It’s very exciting to observe the emerging use of new technologies. Chatbots are one example of how technology can help schedule appointments, issue reminders, or support with refilling prescription medications. The graphics processor manufacturer NVIDIA writes on its blog that it can quickly produce first-class neural networks for medical imaging processes, assisting with the classification of diseases, recognition of human patterns, and segmentation of cancerous cells. These neural networks are used for the development of new oncology medicine, faster genome analysis, and precise imaging processes.
Algorithms are already able to compare millions of medical cases in just a few minutes by using pictures and text databases. This technology has the potential to dramatically reduce wrong diagnoses in the future.
HealthTap from California is an example of a company using Artificial Intelligence (AI) to deliver all-in-one healthcare globally at any time. Through text, voice, and video chat, it connects hundreds of millions of people in 174 countries with experts from a network of more than 107,000 doctors.
Another company challenging traditional healthcare practices is 123Sonography.com. The Viennese startup developed a digital learning platform for the medical sector. Their ed-tech platform for diagnostic ultrasound and echocardiography is already the global leader in the field.
More time for doctors
Most importantly digital health will have a huge impact on the patient-doctor relationship. Doctors will be able to spend more time with patients through artificial intelligence, which will take over bureaucratic tasks. One example for that is MAIA, a tool for automating the obligatory “informed consent” process between doctors and patients before surgery. Currently, doctors are spending more time on electronic health record (EHR) and paperwork (deskwork) instead of interacting with their patients.
A look at the Digital Health Market
Despite these amazing innovations, patients in Europe are still hesitant to pay for digital healthcare services compared to the US because charging between the insurances and industry happens in Europe more in the background. This fact forces companies to reconsider their business models. Therefore digital health companies primarily focus on the industry as the buyer, instead of patients.
Nonetheless, Transparency Market Research valued the global digital health market at almost 196 billion U.S. Dollars in 2017.
Growth in this market is anticipated to rise at a Compound Annual Growth Rate (CAGR) of 13.4% between 2017 and 2025, reaching $536.6 billion by the end of 2025. Mobile health and telehealth are estimated to be the leading drivers of this growth.
Digital health startups were able to raise an all-time high of $11.5 billion in 2017, topping 2016’s record of $8 billion according to the Startup Health Insights Year End Report. The number of investors worldwide increased by 37% from the previous year.
Emerging markets
International hubs are beginning to emerge. Outside of US cities, Beijing raised the most money with $647 million. In Europe, London came in first with 22 deals and a total sum of $189 million.
Israel emerged as one of the leaders in both money and deals: Haifa companies raised $208 million in funding but only had three deals while Tel Aviv landed 17 deals and $146 million in funding. According to the report, there has been a rise in deals of all sizes, ranging from $1 million up to $100 million. The overall deal median has increased by 27 % since 2016.
Regarding Rockhealth, startups are selling more to providers than other customers:
—60% of digital health startups funded in 2017 were selling to providers, compared to 20% selling to payers and 15% selling to biopharma.
Silicon Valley is also entering the digital health market as tech giants like Google or Amazon are experimenting in the market. Google Alphabet is applying AI to early-stage disease detection, data management, and the insurance market, while Amazon started their Alexa Diabetes Challenge.
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Growing Confidence
A reason why such big companies are joining the markets is that they recognize the changing mindset of the patients. In the EU, 48% of the population look for health information online, which is a significant difference from the 16% ten years ago. (Sources: taken from Infermedica)
However many patients don’t trust the digital exchange of health data due to concerns about cybersecurity. These concerns are not unjustified, as we pointed out in our recent article about the cybersecurity industry.
Interested? Read here about the cybersecurity industry
While patients are worried about the privacy and security of their health data, the vast majority (77%) are interested in sharing their health information, especially to get better care from their doctor. Patient and clinician expectations are also changing at a rapid pace alongside technology change, fostering healthcare transformation. However, many regulatory frameworks have not been adopted at the same pace. According to an Accenture report, 66% of health executives confirmed that many innovations in their organizations are focused on subjects that fall into grey regulatory areas.
What can we expect?
The development is going slowly but safely in the right direction, and it has the potential to lift the traditional health experience completely to a fully digital level. Patients are being more confident and open towards the idea of sharing their health data online.
New technologies have the potential to make every interface both simple and smart – setting high expectations for future developments. Robots are already working alongside people, and smart machines are augmenting clinician decision-making. However, the traditional relationships between healthcare organizations and people will remain. But AI will be essential in making those relationships stronger through new services that make the medical experience both – more personalized and effective in accordance with Accenture.
To support this trend, healthcare providers need to adapt faster to new technologies. Meanwhile, all companies participating in the ecosystem must ensure their technology is secure and that sensitive data is protected.
Our Club and Digital Health
Our next roadshow will focus on eHealth in autumn 2018. During the preparation period, we have been scouting and screening many high-quality startups across Europe. Having in mind our selection, we are excited to welcome our investors to the next roadshow with promising startups and their innovative solutions in the world of eHealth.
Startups can apply online, to be considered for the next roadshow.