Growth of the digital health market to reach $536 billion by 2025
In 2016, the global digital health market was at $179.6 billion, according to Transparency Market Research (TMR). Growth in this market is anticipated to rise at a CAGR of 13.4% between 2017 and 2025, reaching $536.6 billion by the end of 2025. Over the next few years, TMR says the market will be supported by technology advancements in the medical and healthcare infrastructure.
Understanding the digital health market schema
TMR classifies this market growth based on two product categories: healthcare information systems and wearable devices.
Technologies such as telehealth, EHRs/EMRs, and population health management make up the healthcare information systems global market. This segment is further broken down into clinical solutions and non-clinical solutions. Clinical solutions include: clinical decision support systems (CDSS), EHRs/EMRs, computerized physician order entry (CPOE), telehealth, mHealth, and population health management. Growth in mHealth is the result of the proliferation of smartphones across the world and a growing interested in preventative health and fitness.
The demand for digital health services is expected to remain high with providers and payers contributing to the B2B segment and patients and caregivers, the B2C.
Wearables, medical and health market
IDTechEx forecasts 39 categories of wearable technology devices, segmented by product type, industry and location on the body. They include: fitness trackers, smartwatches, smart clothing, smart eyewear (including AR and VR), smart skin patches, headphones and more. They also separate wearables into application sectors, including healthcare & medical, fitness & wellness, professional sports, infotainment, enterprise, military and fashion.
The number of companies in the health and medical wearables space continues to grow.
Amazon will control more than half of US online retail sales by 2027
According to research by Rock Health, digital health reached a tipping point in 2016 when consumers showed a record rate of adoption over the previous 12 months. Forty-six percent were super digital health adopters using 3 or more tools, while the number of non-adopters dropped from 20 percent to 12 percent.
Digital health adoption aligns with consumers’ increasing use of web and mobile for retail transactions.
ABI Research forecasts E-commerce share of total retail sales to reach 25% by 2025, and FTI Consulting predicts online retail sales in the US alone will top $1 trillion dollars by 2027. One of most interesting predictions from this report is that Amazon will make up more than HALF of these online retail sales. With Amazon’s recent move into the grocery business, and all the predictions anticipating some type of mail order prescription business, these numbers seem more than feasible considering the size of those markets.
Google is the most trusted tech company among consumers when it comes to sharing health data, says Rock Health. Sixty percent of consumers chose Google, while 39 percent selected Amazon.
Seniors, however, still do not put their trust in tech companies according to the research. Among those 55 and older, only 19 percent trust that a tech company will keep their data secure compared to 38 percent for those under 55.
Digital Health Venture Funding
It’s already the biggest year yet for digital health venture funding. – Megan Zweig, Rock Health
Digital health companies are increasingly pivoting to a B2B model. In a recent survey by Rock Health, 61 percent of companies that launched with a B2C model converted to a B2B or B2B2C model. Sixteen percent of digital health companies funded in Q3 2017 were led by women.
To date, there have been no digital health IPOs in 2017. But Rock Health anticipates seven digital health “unicorns,” and another dozen well-capitalized companies in the IPO pipeline. They identify ‘consumer health information’ as the highest funded sector in 2017 to date with almost $800 million across 15 deals.
According to StartUp Health, investment is digital health is maturing with 75 percent of the deals in 2017 going to a Series D or later funding round compared to 50 percent at the end of 2016. They say that more than half the deals were in areas related to personalized health and consumer/patient experience, a sign that investors are betting on a personalized future in health and fitness.
According to CB Insights, “Across digital health, biotechnology, and the medical device sector, startups are finally bringing medicine into the 21st century.” The trends they say to watch include: intelligent drug design, skin-as-a-platform, blockchain-enabled hospitals, CAR-T, RNA and anti-aging therapies, bioprinting and hand-held diagnostics.
Michael Esquivel of Fenwick and West’s Life Sciences Group says, “As the digital health sector matures, we expect to continue seeing more and larger deals, greater diversity in both private and public investors, and business models that continue to be refined as startups gain market experience and understanding. Businesses will continue to leverage Big Data and AI in digital health opportunities. But entrepreneurs should keep in mind that much of healthcare is a service business and the best solutions to healthcare problems may also require a human component or intervention.”
Most talked about tech in digital health in Q3 2017
While other digital health reports focus on investment activity, Fard Johnmar of Enspektos says his Q3 2017 report looks at the implementation and impact of digital health – where people are focused, and how digital health technologies are impacting health, well-being, workflows and other factors. Enspektos looks at the ‘voice’ of digital health as referenced in media, and found the top digital health areas talked about from July 1 thru September 30th, 2017, include: mobile/mobile health, big data, social media, Electronic Health Records, artificial intelligence and virtual reality.
Enjoy doing a deeper dive in digital health by reading through the reports cited in this post, and let us know your thoughts in the comments!
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