Emerging trends in Digital Health and M&A for 2021
Health IT adoption skyrocketed in 2020 as hospitals, health systems and patients increasingly relied on digital health technologies for care delivery during the pandemic, setting the stage for continued growth and innovation in 2021.
Funding for digital health ventures reached an all time high in 2020 in the United States with a total of $23.3 billion and the first half of 2021 is already nearing last year’s total, with $21.5 billion invested.
Funding for telemedicine alone hit $4.3 billion. And In 2020, six digital health companies raised over $6 billion on their IPOs.
The following are emerging trends that we are seeing:
1. A new age of cybersecurity.
Hackers stepped up their efforts to attack healthcare providers in 2020 to go beyond phishing attacks and stealing information to sell on the dark web
The attacks emphasized the importance of strong cybersecurity and investment in secure data storage. IT teams will need to effectively communicate good cyber hygiene to staff members to prevent attacks and troubleshoot vulnerabilities as more work goes permanently remote. In 2021, it won't be surprising to see more health systems investing in cybersecurity technology and talent as a top priority and planning for cyberattacks as a "when" and not "if" scenario.
2. Telehealth and remote care expansion.
While CMS (The Centers for Medicare & Medicaid Services ) and big payers in USA relaxed regulations on telehealth to help providers continue safely offering care during the pandemic, hospitals and health systems will continue addressing how to incorporate virtual care as part of their long-term care strategy after the public health emergency ends.
The pandemic also has accelerated advances in remote care both for patients with chronic conditions as well as those who have COVID-19 but don't need to be hospitalized. These developments have signaled a shift to a hybrid care model, which will replace mostly in-person visits with a combination of both telehealth and in-person visits for services ranging from follow-ups to urgent care.
Even as the COVID-19 vaccines roll out globally, telehealth looks set to stay. Studies from Fortune Business Insights predict the telehealth market will grow beyond $185 billion by 2026.
3. EHRs evolving with new capabilities.
As digital voice assistants like Amazon Alexa and Google Home have secured a place in consumers' living rooms, hospitals and health systems are inviting similar technologies into patient rooms. With tech developments increasingly focused on natural language processing and ambient listening capabilities, EHR vendors Epic and Cerner both inked deals to integrate Nuance's virtual assistant in their software this year.
4. Blossoming of artificial intelligence and machine learning in healthcare.
AI is not new in healthcare. Organizations have used artificial intelligence and machine learning in hospital administration and operations for years, specifically in the revenue cycle process. Before the pandemic, researchers began testing AI models to read medical images, yielding mixed results and leaving some wondering whether AI and machine learning would live up to the hype.
But in the last year AI became crucial in developing predictive models for COVID-19 cases spreading across the country. Academic institutions and health systems, developed predictive tools and models to track the virus and estimate the risk of COVID-19 patients developing severe symptoms. The field will continue to evolve and become more integrated with clinical care in the coming years.
A combination of wearables and other biomedical devices, combined with machine learning and artificial intelligence will continue to transform clinical research, treatment protocols and increase the virtual care capabilities of health providers
5. Big data management becomes a need.
The digital transformation among health systems was well underway when 2020 began, and the pandemic underscored the need for centralized and efficient data management. Data-gathering and reporting efforts sped up during the pandemic, and even small organizations are eyeing cloud implementations to securely store and coordinate data.
For academic medical centers, the stakes are higher, as secure research becomes a larger priority.
6. Predictive analytics moves to the forefront.
The accelerated digital transformation in 2020 means more health systems now have the technical capabilities to practice precision medicine and inch closer to predictive analytics.
In the future, we envision that the analytic insights will evolve to be used at the bedside during the point of care. We also envision that analytics will enable us to proactively manage care and our patient population to keep them out of the hospital and healthy.
7. EHR advances: Interoperability, standardization and the cloud.
This year helped pave the way for advancements in EHR interoperability and standardization, with interoperability rules to innovations spurred by the need for record sharing during the pandemic. With the federal government's new regulations, which aim to help patients gain better control of their health data via smartphone apps, interoperability is expected to increase between providers, payers and health tech developers.
In November, Google launched its new healthcare interoperability readiness program to help healthcare organizations navigate and prepare for the new changes, and EHR giant Epic reported a sharp uptick in the number of patient records transferred between providers using its Care Everywhere interoperability platform; more than 221 million patient records were shared in November 2020 — a 40 percent increase year over year. More hospitals and health systems are also making the transition to cloud platforms and partnering with big tech giants, including Microsoft, Amazon and Google, to host their EHRs and information systems to offer real-time data insights and more storage solutions.
8. Digital front door and the digitization of the consumer experience.
The pandemic ushered in a newfound era of social distancing, which has forced healthcare organizations to ramp up their digital presence and capabilities to stay connected to patients. With the "digital front door," serving as the first impression potential patients have of a health system, online experience has become a critical component of their overall reputation.
9. Clinical IT advancements.
Augmented reality, wearable technologies and IoT devices in clinical care are steadily advancing within the hospital's four walls. With COVID-19 limiting direct contact, health systems have turned to robotics for tasks from facilitating video chat communications for patients to virtual reality headsets that display a clinician's first-person point of view from inside patient rooms remotely to the rest of the care team.
The healthcare VR market was just $2 billion in 2019, but a recent report from Verified Market Research predicts massive growth, to the tune of $34 billion by 2027.
Robotic surgery developments are expected to continue across the healthcare system, in areas including spine, cardiology and oncology. In October, a surgical team at St. Elizabeth Edgewood (Ky.) Hospital became the first hospital in the U.S. to implant a Bluetooth-connected cardiac defibrillator, which can wirelessly pair with a smartphone app for patients to control. By 2025, the global medical robots market is expected to reach $12.7 billion, up from about $5.9 billion in 2020.
By: Marc De Clerck
Managing Partner, CDI Global
HGP 1H 2021