The growing digital health market presents new opportunities for companies to boost their innovation strategies. But how can established pharma and healthcare companies, as well as new players from other industries who are entering the market, tackle such opportunities?

Key Trends

There are several trends driving digital health initiatives. Technology trends are the accelerator of digital health as they are inspiring new innovation. Advanced technology solutions such as AI require employees to develop new skill sets in relation to data management. While an increasing amount of data is being gathered from different data points, it is the analysis and interpretation that actually creates value. 

Technology is particularly accelerating genomics, leading to increased personalization in healthcare which opens up a new stream of innovation dimensions with regard to treatments, procedures, medicine, etc. 

As technology trends are advancing, new business models are emerging. Virtual remote care will play a crucial role in digital health. A lot of patients will opt for that way enabled by technology. It will lead to much more serious, and privacy-protected personal health records, allowing patients to review their own health recording to recognized trends across various data sets.

Further, experts recognize a shift from reimbursing on activities to value-based reimbursement aiming to create a positive outcome for the patient. Value-based care holds significant potential to disrupt the dynamics of the industry. Insurance companies are contemplating on whether to reimburse rather the outcome or even prevention instead of solely the medical procedures.

Finally, new trends focused on the patient are emerging. Allowing patients to have immediate access represents a key success factor not only in consumer-related industries but especially in healthcare. Patients are more and more behaving as consumers and thus, their demands are increasing. Not being tied to their main care provider who knows their health record but being able to receive consultation from other care providers presents a great need. The rise of telehealth applications and other digital health technologies can tackle such a need by further connecting the dots and drawing conclusions customized to the patient. 

When focusing on the ecosystem that is surrounding the patient, there are 3-4 players that can be identified: The health care professional (doctor or pharmacist), health systems (governments, health authorities that are driving health priorities), the payer (i.e., the financing source) as well as the part that is linked to the industry in general. The pharma industry, for instance, is now threatened to be played out by competitors from other industries such as Amazon or Microsoft when it comes to technology offerings. The whole ecosystem is being disrupted.

Patient engagement as a business model plays a significant role, especially in the pharma industry. The industry has a vast interest in not only selling a product upfront but also onboarding the patient correctly and keeping track of their treatment once the prescription has been written. Such services are enabled by data and thus, insufficient data management and not having the respective resources can result in major hurdles in the process. Companies that are not able to facilitate the use of data to tackle new trends focused on the patient may fall behind the competition.

Investment flows

When looking at the investment flow in digital health, there is a massive opportunity in helping patients manage their diseases which is only continuing to grow. Not all diseases have been covered, every patient is unique and thus, every context is unique leading to significant room for innovation which is still fairly fragmented in the industry. 

Artificial Intelligence in behavioral coaching presents one of the technology solutions tackling this opportunity. By gathering the answers throughout patient consultation and treatments, AI can refine the algorithm which ultimately empowers the patient to take over the control of their disease and treatment. Developing behavioral coaching further can even replace the doctors for a lot of the standard interaction.

It is still understood that the human part cannot be skipped while purely relying on data. Such AI solutions are rather aiming to streamline the process for the healthcare professional when consulting the patient by creating a more efficient data dashboard. 

Investments are also being made towards devices that help diagnose and provide more tangibility and reality of how diseases of patients are evolving (e.g., devices to measure blood cholesterol level, sugar level, etc.). Digital health devices in the sense of data capture through sensors and the analysis thereof leading to automation, apps, and software is a growing opportunity that is evolving at rapid speed.

Tech giants such as Google, IBM or Amazon are entering the healthcare market, forming partnerships to standardize procedures around the patient. For instance, gathering data from a patient enabled by technology, to draw conclusions on treatment and eventually provide a solution is a new business model that grasps into several different phases within the episode of care.

The episode of care also needs to be regulated from an insurance perspective. In particular, the process starting with data gathering of the patient who is then consulted by his primary care physician, followed by the actual treatment and so forth, requires regulated processes in terms of compensation and allocation of the resources as multiple participants are involved.

Engaging with the patient throughout the episode of care allows to capture the whole evolution of a patient. It further not only creates visibility on individual level but also at population level, drawing a bigger picture by crossing trends within a broader population or even with regard to the patient’s health record itself. This would allow any doctor the patient is visiting, to access their health record in order to gain a holistic view and put the patient’s symptoms in perspective.

Thus, it goes beyond the personal health record we are already familiar with, but more so the journey of the patient between different (data) points. Such records could even be complemented with lifestyle data (e.g., through personal apps) that provide a different picture of the patient. 

Ultimately, investments are streaming towards services that support the patient which leads to new partnerships and collaborations between companies even from different industries. The opportunity invites new players to enter the market and disrupt existing business models. 

Hence, established healthcare, pharma and also medical device companies are pressured to join the opportunity in order to remain competitive.

Success factors

Industry players are decreasingly doing it all by themselves, instead, they are focusing on collaborations. In fact, healthcare & pharma companies are becoming much more open to expanding their viewpoint to third-party solutions. They are joining forces with smaller, specialized companies to utilize their technical competence and entrepreneurial view as an incubator.

Particularly in the healthcare industry, it would be unreasonable to have an environment with various players offering different solutions for the patient. 

Collaborations, therefore, seem to be the key to develop new technology-based applications that are driving significant efficiency and innovation to the healthcare system. The competition is steered by the industry players actively scouting for new companies to acquire or collaborate with.

Although companies may source technology solutions through new partnerships, it remains necessary to lay the foundation within the organization when it comes to data management and the usage of new technology applications. 

Further, understanding the needs of the patient and the trends resulting from it, will be crucial to a successful innovation strategy. The patient should be the starting point when developing a new solution to offer true value.

10EQS can help you understand the patient’s needs and pain points in order to shape your innovation strategy. 10EQS can assess the dynamics of new business models & initiatives in the field of digital health to help develop your go-to-market strategy. 

10EQS Contributors for this blog post include: