Digital Medicine A Growth Industry?

The Economist December 5th 2020 pp61-62|Business| Health care and technology “The dawn of digital medicine” “The pandemic is ushering in the next trillion-dollar industry”.



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Read the article for all detail.


Data presented in graphs ($ Values are Estimated from Graphs)

Global digital health market size estimated in 2019 at $350Bn consisting of $160Bn Care Delivery, $100Bn Research and Development, and $20Bn each in Finance Operations, Screening and Diagnostics and Wellness and Disease Prevention. The market is estimated to reach $600Bn in 2024 with growth in Care Delivery from $160Bn in 2019 to $320Bn in 2024, R&D from $100Bn to $160Bn, Finance Operations from $20Bn to $60Bn, Screening and Diagnostics from $20Bn to $40Bn, and Wellness and Disease Prevention from $20Bn to $40Bn.


Global digital health equity funding to private firms has been relatively stable fluctuating from 2017 nearly $4Bn and as high as $6Bn in late in 2018 to $8.4 Bn Q3 2020.


United States % of Consumers using various digital services have increased significanty with COVID. Prior to COVID 16% did prescriptions online and now that is up to 26%, 15% checked symptoms online and now 23%, 14% managed appointments and now 20%, saw a physician online was 5% and now 19% and used a health app was 5% and now 9%.


Summary of Article

Consumer behavior shows a marked increase in using digital/online medicine since the onset of the COVID-19 pandemic. And equity funding to Global digital health steady since 2017 funding has reached its highest level recently at $8.4Bn Q3 2020. Of the health care segments, Care Delivery is expected to jump 100% from $160Bn estimated in 2019 to $320B estimate for 2024, R&D will jump 60% from 2019 to 2024 from $100Bn to $160Bn. Other segments are smaller but are projected to at least double in the same timeframe with Finance Operations ($20Bn to $60Bn), Screening and Diagnostics ($20Bn to $40Bn) and Wellness ($20B to $40Bn).


One must wonder if all this enthusiasm is too good to be true! No doubt though that Health Care among the last digitize lagging behind “banking, travel, retail, carmaking and even packaged goods.” “Some 70% of American Hospitals still fax and post patient records.” COVID served to further expose the lack of “digital communications and analytics” in healthcare. Now many companies are jumping at the potential opportunity to modernize healthcare ranging “from health-app startups and hospitals to insurers, pharmacies, and tech giants such as Amazon, Apple and Google…” Start-ups, the unlisted “unicorns” having more than $1B private market capitalization “have a combined value of $110Bn.” As an example, “Amwell, a telemedic in which Google has invested $100M, raised $742M” in an IPO with a market cap of $6Bn.


“Technologies such as sensors, cloud computing and data analytics are becoming medical grade” making adoption more likely. Devices that “monitor diabetes and other ailments continuously” are getting the thumbs up from physicians with nearly half using them and “71% regarded the data as medically useful.” And even the Apple Watch predicted atrial fibrillation in a clinical trial.


Of course health care is heavily regulated for safety and privacy but “regulators around the world are pressing health-care providers to open their siloed systems-a precondition for digital health to flourish.” Besides having open systems common standards are needed and being touted by various government and corporate entities. Some of the old guard players like Epic, an industry-leading electronic health record, will have to be willing. Do they participate or fear losing marketshare to upstarts?


Tech firms are pushing for a place “Amazon wants Alexa…to analyzed your cough and tell you if its croupy or covidy. “Apple has its watch and nearly 50,000 iPhone health apps and Alphabet, has Verily, a life sciences division.” For progress it maybe that the entrenched firms will need to collaborate with tech. “Epic is using voice recognition software from Nuance, a startup, to enable doctors to send notes to outside specialists.” “Siemens Healthineers…is working Geisinger, an American hospital chain, to expand remote patient monitoring.”


In the end, Dr. Klasko (General Catalyst) makes a good point “You must have partnerships with providers, not just hundreds of unconnected apps.” Another key point by Vivian Lee (Verily) “If the new generation of digital technologies is to thrive it must ‘improve health, not increase cost’.” Finally, change comes slow in medicine as “Moving fast and breaking things does not work well in health care.”