Digital Shifts and Disruption in the Healthcare Industry

While the healthcare industry was already undergoing a digital transformation prior to the pandemic, the crisis of the past two years has accelerated digital adoption within an industry which accounted for over 19% of US GDP in 2020.

A growing — and aging — population is contributing to the growth of an already massive industry. As an amalgamation of different healthcare institutions and companies come together, these institutions recognize the need to prioritize delivery of a better quality of care, which will lead to higher patient satisfaction.

A 2021 Insider Intelligence.com survey asked adults 18+ to rank their healthcare priorities:

Ease of care: 89%
Privacy and confidentiality of personal health care information: 89%
Data security: 88%
Receiving what they considered personalized care: 88%
Having a provider clear to where they live or work: 85%
Coordination among all their healthcare providers: 84%
The ability to monitor their health via apps and/or wearable devices: 75%
Access to a health coach, such as someone who helps make food and advises on lifestyle choices to improve health and wellbeing: 68%

Going Digital with Telehealth

While somewhat slower than other sectors to embrace digital transformation, the healthcare industry is moving to adopt enterprise technology and update everyday systems. Propelled by investors with deep pockets, the digital health industry has introduced a variety of new and virtual solutions, like telehealth.

Telehealth offers lower costs for providers, payers, and patients. According to Amwell, 54% of patients said they use telehealth to save money, because a virtual visit costs less than an in-person visit. Online digital health services and virtual care also cater to the desire of many adults like millennials. Comprising almost one-third of the population, they find physically visiting doctors less convenient and appreciate virtual options.

Healthcare networks also see telehealth as a solution for reducing medical spending and also the number of unnecessary hospital visits. With a predicted shortage of over 120,000 physicians by 2032 and 670,000 healthcare workers, like nurses, by 2025, telehealth may also help address the looming provider shortage.

The Growth of Digital Therapeutics

Digital therapeutics (DTx), forecast to grow into a $56 billion global market by 2025, uses software to deliver evidence-based behavioral therapies and other therapeutic interventions. It can replace or complement current disease treatments for chronic and behavioral conditions by using mobile health and wellness apps.

The FDA has authorized multiple DTx treatments, and pharmaceutical companies have been working to capture part of the market by strategically investing in various DTx firms. Telehealth vendors have also turned to DTx to help improve patient outcomes. Both patients and payers are seeing strong value in the market. Analysts predict more telehealth vendors may opt to purchase DTx startups or even create their own in-house DTx solutions.

With the adoption of digital medicine accelerating, the entire healthcare value chain is similarly evolving. DTx is offering many new solutions for healthcare providers, especially those who provide mental health care. We’ve seen the mental health crisis worsen across all demographics over the past two years. DTx open more doors to providing treatment to people who might not otherwise have had access. Experts suggest that for DTx players to remain relevant with their payer and employer partners, they should expand into behavioral therapies.

There are, however, a few challenges with the potential to hamper growth. For example, Medicare and other government-based insurers have been slower than private insurers to cover DTx. This reluctance could stem from both outdated regulatory frameworks as well as legacy platforms. With diverse electronic health records (EHR), some proprietary and others off-the-shelf, and other records software programs, DTx vendors must also ensure their platforms can integrate with existing healthcare systems.

Other Widely Adopted Healthcare Trends

There are many other healthcare trends in the market right now thanks, in part, for the number of digital health startups which have flourished since 2020.

Electronic health records

EHR continue to play a pivotal role in enabling providers to manage patient information. According to Markets Insider, the global EHR market value in 2016 was $20.55. It’s expected to exceed $33 billion by 2025.

Social determinants of health

Social determinants of health (SDOH) have also become an increasingly valuable way to assess the environmental, economic, and non-medical conditions with a direct — and indirect — impact on people’s health. Healthcare organizations are addressing a range of SDOH, like access to transportation and nutritious foods, to help their patients.

The care patients receive accounts for 10-20% of health outcomes. SDOH accounts for the remaining 80-90%. In 2021, 95% of U.S. hospitals and 93% of U.S. payers took SDOH into consideration during patient interactions.

Change Healthcare’s 2020 Healthcare Industry Pulse Report surveyed 445 leaders at US providers and payer organizations to learn that healthcare organizations were taking steps to provide more diverse services to their patients including:

Providing support services: 30%
Coordinating with community organizations: 15%
Offering health-risk assessments: 11%
Using point-of-care checklists to identify potential social determinants: 9%
Deploying software to identify at-risk individuals: 8%
Combining medical data with other demographic sources: 8%
Incorporating social determinants into clinical workflows: 7%
Training providers to capture social determinants during visits: 6%

Wearable tech

Healthcare has also embraced wearable technology like smartwatches and Fitbits to collect wearers’ personal health and exercise information. The percentage of people using health and fitness apps increased over 48% from 2019 to 2020, and by 2021, the global market size of the fitness app market hit $1.1 billion — a number expected to reach $4.8 billion by 2030, with a CAGR of 17.6% from 2022 to 2030.

Interoperability

The U.S. Department of Health and Human Services (HHS) this year also introduced data sharing mandates designed to improve communications — and interoperability — among health systems, payers, and providers.

Certainly an issue pre-2020 but one brought into stark relief by the pandemic was the inability of payers and providers to securely and efficiently share patient data. Healthcare interoperability — the ability of two or more systems to exchange and use healthcare information — is paramount to improving patient outcomes.

According to Google Cloud’s July 2021 physician healthcare interoperability survey, 95% of physicians agree — and 59% believe improved interoperability will help identify high-risk patients more quickly.

The market has a range of solutions to help break down data exchange barriers, remove silos, and streamline care. But privacy concerns, long-time data exchange practices, and worries about cybersecurity may slow efforts to achieve regulatory compliance. It will take time for all healthcare IT to become fully interoperable.