The Proliferation of Digital Health in a Post-pandemic Era
At True North, one of the three investment themes of Fund I is centered around is health & wellness. As Covid-19 has been rapidly accelerating digital transformation in healthcare, we have identified digital health an important growth trend for impact investors.
After a decade of slow and steady growth, the pandemic has catalyzed rapid adoption for a variety of digital health services, ranging from patient-facing technologies such as telemedicine to ancillary services, such as specialized software to handle and secure patient data. The global digital health market size was estimated at USD 106.3 billion in 2019 and is expected to reach USD 639.4 billion by 2026 [1], a CAGR of 28.5%, reflecting the remarkable growth expectations for the industry.
According to a study conducted by Accenture, consumers want virtual care services to persist well beyond Covid-19. Given the choice, 75% of consumers in Singapore would choose virtual options for health and wellness advisories, and 69% are open to remote monitoring of ongoing health issues through at-home devices [2]. The numbers track similarly in the United States, with 83% of patients indicating that they expect to use telemedicine solutions after the pandemic resolves [3]. Despite the recent uptake, however, digital health solutions will never fully replace the need for in-person care, and there remain numerous factors that have the potential to limit post-pandemic progress for the industry. Interestingly, the two years leading up to the pandemic saw a drop in digital health usage in the United States, with only 35% of US adults reporting that they use their smartphone or tablet to help manage their health in January 2020, which decreased by 13% compared to 2018 [4]. Many people have lingering apprehensions concerning the level of quality of digital care services, the privacy of their personal health information, and the ease of use of digital platforms, particularly when integrating digital solutions with other facets of care. Firms that are able to provide solutions to address these gaps and truly meet patient needs will stand the test of time and help to build an ecosystem of consumer trust for digital health services.
Rising technologies in the digital health space offer promising solutions for society and enable innovative, resilient business models. Industry giants such as Teledoc Health have pioneered the way for mainstream telemedicine and virtual care solutions; however, there are a range of emerging technologies and innovations with significant growth potential. For example, the global wearable technology market size is projected to expand at a compound annual growth rate of 15.9% from 2020 to 2027, reflecting the growing popularity of the Internet of Things (IoT) and connected devices [5]. Wearable technology is particularly useful for patients with chronic conditions, such as obesity, diabetes or heart disease, as it enables consistent and relatively unobtrusive monitoring and real-time data analysis coupled with predictive analytics. This incredible amount of health information being stored necessitates enhanced data security. Blockchain technology is being leveraged to solve this problem, as it enables stronger encryption of sensitive data as well as drug authentication through secured traceability. The blockchain healthcare market is currently worth $53.9 million and is expected to reach $829 million in 2023, with an impressive CAGR of 72.8 percent [6]. While similar cases can be made for other technologies including Artificial Intelligence (AI) and 5G, we must remind ourselves that first of all, healthcare is by default human-centric.
There is no one-size-fits-all solution to healthcare, and digital health services offer a powerful adjunct to the traditional forms of care available. Ongoing innovation in the digital health space will drive patient value, extending the industry benefits beyond the obvious, such as convenience and accessibility, to offer high-quality holistic and patient-centric care. According to experts, the patient-provider experience necessitated by the pandemic over the past several months has accelerated virtual models of care by five to ten years [7]. This rapidity of change is unheard of, even in the fast-paced world of digital transformation. Given the current momentum and high degree of market responsiveness, digital health firms are uniquely positioned to build on this traction, fueling a future of health that optimizes the use of digital solutions to provide higher quality care. At True North, we are excited about digital health offerings and the emerging technologies enabling these services. We believe this revolution is paving the way to more accessible and more comprehensive healthcare; for this reason, we are aiming to participate in this innovative space with Fund I.
To learn more about our True North Impact Fund I and how we connect investor capital based on the UN SDGs with impactful ventures around the world, please contact Fund Manager, Kai Chen (kai@truenorthimpact.com).
[2] Accenture - Sustaining the growth of digital health
[3] Medical Economics - Four new statistics that prove that telemedicine isn’t just a pandemic fad
[4] Business Insider - New data shows digital health was in trouble pre-pandemic
[5] Grandview Research - Wearable Technology Market Size, Share & Trends Analysis Report By Product
[6] Inside Digital Health - 5 Emerging Technologies that Will Change Healthcare
[7] McKinsey - The shift to virtual and home care: An interview with Annie Lamont