The Digital Health Sector
Accelerated growth and increased investments
After the COVID-19 pandemic and most sectors going into pivotal digital transformations, digital transformation in the healthcare sector has become more important than ever. Hence, healthcare institutions started developing a digital strategy centered around patients and healthcare workers with an in-depth study of the IT options, financing issues and best practices that can be adopted in this field. This transformation urged specialists and decision-makers in the health sector to ask many questions, including: How can digital transformation help achieve the goals of health institutions and add value to patients and quality of healthcare services? This is based on the fact that digital transformation should make healthcare institutions more financially sustainable, more confident and future-ready. The World Health Organization stresses that digital health should be an integral part of health priorities and benefit people in a way that is ethical, safe, reliable, equitable and sustainable.
Digital transformation in healthcare has been described as the art of using IT to transform its work methodology, including patient care, business strategy, and organizational processes in these organizations using technologies such as telehealth, predictive analytics, and artificial intelligence (AI). Today, this digital transformation has become more important than ever before. The coronavirus pandemic was an opportunity to accelerate the pace of digital transformation when other sectors such as economy and education entered this field and succeeded in it.
Studies indicate that telemedicine is one of the most cost-effective medical technologies in the global healthcare sector. Healthcare applications, video chats with doctors, and electronic database are examples of some of the innovations that patients can apply. It has also become clear that the COVID-19 outbreak has contributed to accelerating digital innovation at an unprecedented pace, with the aim of improving the healthcare level, as digital health, in addition to AI techniques, depend on the use of mobile computing and wearable devices to improve healthcare efficiency and quality.
According to the World Health Organization, the implementation of appropriate digital health technologies is a key component of a national strategy but may be difficult to accomplish especially in low- and middle-income countries. Exploring the potential of global solutions and shared services should be considered as part of the national health strategy of Member States, at the same time as generating evidence on the implications for access, cost, quality, safety and sustainability of applying these global solutions in health systems within vastly different country contexts.
Bringing digital health to the forefront
Technological innovation, robotics and the Internet of Things (IoT) have led to the increased use of various digital devices by healthcare professionals, hospital workers and others. The conversion of electronic health records (EHR) has facilitated the treatment of many patients. In addition, there is an ever-growing set of digital data related to treatment methods. Given the increasing spread of devices, Information and Communications Technology (ICT) can be a major part of health prevention and treatment strategies.
Digital health is not just about using certain technologies and tools, it also adopts data interoperability and AI, open and secure platforms, as they are fundamental to delivering more consumer-focused care. Advances in artificial intelligence, robotics, and machine learning continue to drive major changes in digital healthcare, as well as the development of devices such as Ingestible Sensors, used to diagnose diseases, as well as robotic caregivers, devices and applications for remote patient monitoring.
With the increase in the number of people with chronic diseases and the high healthcare costs, digital health platforms enable patients to access health services faster and obtain better quality of care. These platforms also help alleviate the burdens on healthcare facilities by pioneering the idea of self-care for patients. By redefining the patient-doctor relationship, digital health systems engage patients with their caregivers promptly and directly, making them part of the treatment plan, and increasing the patient’s sense of partnership, trust, and transparency. While access to medical technologies reduces the financial burdens associated with patient treatment, many digital health platforms are a gateway to like-minded communities where patients can find encouragement and engagement with others going through similar health issues.
After the widespread damage caused by the coronavirus, large parts of the US healthcare market, which is worth 3.6 trillion dollars, are rapidly heading towards digital transformation, and the same applies to Europe, Asia and most countries of the world. According to the McKinsey Global Institute, global digital health revenues will rise from $350 billion last year to $600 billion by 2024. Telemedicine has been ranked as one of the most cost-effective medical technologies in the global healthcare sector, and is set to save $21 billion globally by 2025, representing a growth rate of over 80%.
Coronavirus and the drive towards digitization
It has become known and accepted that the world has changed after the coronavirus pandemic, and this is clearly shown in many fields in all countries around the world, especially with the fast digital transformation that has affected various economic sectors, from remote learning, e-commerce to the transportation sector and the health sector, which is rapidly shifting towards digitization. The health sector appears most affected by the pandemic, and the one that shifted towards digitization the most, with the spread of digital medicine, electronic pharmacies, medical applications, telemedicine, and many other transformations that did not exist before the pandemic.
Telemedicine was definitely the most prominent in the health technology sector during the coronavirus pandemic, allowing patients the ability to receive consultations and treatments from their doctors without the need for personal appointments, or going through the travel inconvenience, or going to the clinic or hospital, with all the risks involved, especially during the quarantine that occurred all over the world. This concept includes the use of digital information and communications technologies such as computers, smartphones and cloud computing to access and manage healthcare services.
It is reported that remote medical consultations will be the main service that will enable significant savings, noting that 280 million medical consultations were carried out in the world in 2019 before the pandemic, but this number rose to 348 million consultations in 2020 after the pandemic. However, this development is a promising indicator of what digital medicine will look like in the future. It is also expected that the activities of healthcare service developers will be crucial in accelerating the use of emerging telemedicine services, and increasing the capacity among healthcare providers in the world. However, the biggest challenge facing the growth of this sector is the lack of sufficient laws and legislation capable of protecting service providers, including protecting patient data and information, especially in small healthcare service institutions such as private health centers and others. Therefore, the need to develop current legislation and establish new laws capable of providing the required protection for all entities working in this vital sector is highly recommended.
Increasing and channeling investments
This digital transformation in the health sector required increasing investments in digital technology, especially in the last two years 2020-2021. Health sectors around the world, including the Arab world, began to raise the value of the amounts allocated to invest in digital healthcare. According to McKinsey, the United States of America has increased the health spending budget for virtual care by 20 percent, including telehealth services, so did Europe, Asia and the Gulf States. With the COVID-19 pandemic emphasizing the importance of digital healthcare, US academic agencies such as the National Institute on Aging have increased their spending on digital health to support research and development in this growing industry. Investment in the US digital health sector began to grow after the introduction of the Affordable Care Act, which increased funding nearly 6-fold. The digital health market value for 2020 was between $96.5 billion and $111.4 billion. Global venture capital funding for digital health companies hit a $15 billion high in the first half of 2021, the highest level since 2010, driven in large part by telehealth investment.
Funding activity was up by 138% during the first half of 2021, compared to $6.3 billion raised in the first half of 2020, according to a report from “Mercom Capital Group”, a global communications and research firm. Corporate funding into digital health companies, including venture capital, public market financing, and debt, totaled $19 billion so far in 2021.
Government authorities indicated that there is great interest in funding state-of-the-art projects and technologies, such as technologies that will allow the elderly to live alone safely, technology related to psychiatric rehabilitation and social reintegration, as well as preventive medicine through applications and technologies that allow close monitoring of the patient with minimal effort.
The top three trends in healthcare investing
- Telehealth: Virtual ambulatory care expanded from 2% pre-COVID to 30% on an ongoing basis.
- Remote Patient Monitoring: Total funding increased from $417 million to $941 million in 2020.
- Behavioral Health Technologies: Funding for mental health solutions increased from $599 million to $1.4 billion in 2020, driven by investments from the financial community as well as governments, health and education systems.