The digital healthcare market is continuing to pick up speed, with the technology giants, on the one hand, trying to position themselves with their huge volumes of data. On the other, however, a host of opportunities are also opening up for companies and platform providers in the healthcare sector.
The human body is a wonder. But when this wonder breaks down, medical technology goes to work, an area that is frequently just as fascinating as the amazing interplay of organs, bones, muscles and nerves is in the body itself. For this reason, it represents not only a lifeline for individuals, but also a solution for society and the healthcare system itself. Medical technologies improve the quality of life enjoyed by the elderly and the chronically ill, and enable people to remain independently active at home and work, a benefit that eases the burden borne by countries’ social support systems.
Such needs are creating a wide range of growth opportunities for the medical technology industry. Medical electronics is profiting from these opportunities as well. In a study released in August, Industry Research Biz estimated that revenue would increase from its current level of $4.3901 billion to $5.1234 billion by 2026.
In a report “untainted” by the COVID-19 pandemic, the consulting firm Roland Berger projected in October 2019 that the market for digital products and services in the healthcare system would rise to about €155 billion by 2025 – €38 billion of which was attributed to Germany alone. A follow-up study issued in October 2020 raised the estimate significantly higher. The firm now projects that the expected growth of the digital healthcare market will rise to €232 billion by 2025 in Europe – €57 billion of which would be attributed to Germany alone. The experts now expect that the pandemic will ultimately give a two-year boost to the digitalization process in the industry.
The international experts surveyed by Berger said the greatest momentum would be generated by digital disease prevention and AI diagnostics, followed by AI-based therapeutic decisions. One-fifth of all physician services could be supported by AI in six years, the experts forecast. The market volume for AI-based healthcare, diagnostic and self-monitoring applications is expected to reach €16 billion by 2025.
“Digital twins” are expected to play an important role in work that is leading to “tailored treatment plans,” according to the Berger study. These virtual patient likenesses are created with the help of DNA and are continuously updated with data from the patient’s medical record. Experts expect that 30 percent of patients will receive such individual treatment by 2025. In 40 percent of these cases, the therapies would have been safely simulated with the digital “doppelgänger” before being used on the real human being.
Digitalization involves not just new treatment concepts. It is also rearranging the chairs of the healthcare market. In this process, established companies are feeling pressure from rivals who come from outside the industry, like the technology giants Amazon, Google and others who are scoring points with their digital and technological expertise.
In 2019, 61 percent of the experts surveyed for the Berger study said the tech giants would be an integral part of the healthcare system by 2025. But recent surveys have shown that only 10 percent of patients with pre-existing conditions would turn to these companies. This will increase opportunities for companies and platform providers in the healthcare system that combine virtual and real services as an interface.
Finally, start-ups should not be forgotten. They can intensify competition with their “fast,” innovative ideas. Positive market outlooks create the basis for solid financing – provided valid business models are in place. For instance, risk capital in the area of digital healthcare exceeded €4.5 billion for the first time around the world in the first half of 2019.
Fraunhofer Institute for Production Technology: “Production strategies for medical technology of tomorrow”
BVMed: “The future of medical technology”
Roland Berger: “Future of health: an industry goes digital – faster than expected” (October 2019)
Roland Berger: “Future of health – the rise of healthcare platforms” (October 2020)
Deloitte/GkV: Digitalization of the healthcare market (September 2019)
German Ministry of Education and Research: Digitalization reaches healthcare
The Innovation Center Computer Assisted Surgery in Leipzig: whitepaper on secure AI systems for healthcare