Healthcare is on the cusp of a digital revolution.
Digital technologies are poised to transform every corner of the sector – from research and drug discovery to front-line care and business operations. Benefits will flow in all directions.
For payors, HLS businesses and TMT companies, digital health provides an opportunity to develop cost-effective, patient-centric products and services. In our survey, 67% of respondents say the convergence of technology and healthcare will transform patient care, while 62% say it will deliver huge cost savings for their organisation.
For investors, digital health – and the disruption it brings – offers new opportunities to secure healthy returns. The global digital health market generated revenues of $73bn in 2017, but it is tipped for even greater growth. Estimates suggest it will hit a compound annual growth rate of 21% between 2018 and 2023, far outpacing many other asset classes.
Against this backdrop, digital health is firmly on boardroom agendas, and organisations and investors are willing to spend to make change happen. In our survey, 64% say digital health is a strategic imperative, and a further 63% plan to invest more in digital health initiatives over the next three years.
Seizing digital health opportunities will bring new challenges and risks. Management teams will need to steer their organisations through significant market disruption, while also making confident decisions about how to evolve their business models and how to protect their market share. Clearly, there will be winners and losers. Whether an organisation sinks or swims in this new era will largely depend on its willingness to adapt.
Andreas Haimböck-Tichy, Director, Healthcare and Life Sciences, IBM UK:
"We live in a world where no single organisation has all the answers. We need to bring together the right teams to find solutions."
The investment picture
Digital health has become an important asset class, with investors moving to capitalise on buoyant opportunities. After a fizzy start, the market has started to stabilise.
In our survey, 51% of investors say digital health is a strategic priority (only 24% say it is not). A further 41% plan to increase the amount they invest in digital health over the next three years. Unlike many other asset classes, digital health appears largely immune to wider market uncertainty. Just 30% of the investors we spoke to say the UK’s exit from the EU will hinder their digital health strategy.
Looking ahead, investors believe artificial intelligence holds the greatest promise in healthcare. Differentiation and a clear business case will be key to securing funding.
Simon Graindorge, Partner at IP Group, a patient capital investor:
"Digital health is starting to come out of the hype cycle. The market is emerging, and we’re now seeing success stories, backed up by evidence."
Is it time to redraw the digital health map?
The United States has long been the global frontrunner in digital health, but our research shows that the Asia-Pacific region could soon catch up. Across the region, China, Singapore and South Korea emerge as important activity hotspots.
Damian Adams, Partner, Simmons & Simmons, Singapore
"Patients in Asia have clear expectations that digital technology will disrupt healthcare, just as it has other sectors across the region. For organisations and investors, this presents an unprecedented opportunity to disrupt the status quo, and find new ways to secure long-term success and profitability."
This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.
Key contacts
If you have any questions, contact a member of the The digital health imperative team for assistance:
