Digital technology health helps healthcare providers deliver more focused and effective treatments worldwide.
As the COVID-19 crisis creates a new normal, healthcare stakeholders must understand the digital health landscape.
In the first half of 2020, digital health activity reached unprecedented levels. Venture funding hit a record $5.4 billion. Major deals also made headlines, including Teladoc Health’s $18.5 billion acquisition of Livongo. Meanwhile, virtual healthcare services expanded rapidly. These included telehealth and remote patient monitoring.
This article explores healthcare app development and its growth potential. It examines how investors, patients, and established companies engage with the ecosystem.
We will also analyze COVID-19’s impact on digital health. Additionally, we will share strategic insights for healthcare businesses.
What Are the Biggest and Fastest-Growing Digital Health Markets?
Most digital mobile app development companies focus on solutions that directly improve patient treatment.
Approximately 49% of digital healthcare firms operate in the care category. These companies focus on effective therapies, remote patient assistance, and patient treatment. In 2019, this market was valued at $157 billion. It represented 45% of the total digital healthcare industry.
Care Delivery Category
Companies in this area develop digital technologies like Livongo for diabetes management. They also use technology to expand patient access to care. For example, Teladoc provides remote patient assistance through telemedicine. Similarly, PillPack operates an online pharmacy that supplies medications to patients.
The combination of large markets and strong growth makes care delivery attractive to businesses. It offers opportunities for companies interested in healthcare app development. However, patient care is not the only profitable option for digital health businesses.
Research and Development (R&D) Category
Major pharmaceutical companies have shown significant interest in the R&D category. As a result, it represents the largest market value pool in digital health.
Many businesses in this category provide precision medicine solutions. These technologies help accelerate drug discovery. Additionally, AI-enabled patient recruitment and virtual trials improve clinical trial efficiency.
However, this industry is relatively mature compared to other digital health sectors. It is projected to grow at 8% annually. In contrast, other value pools typically expand by 10% or more each year.
Finance and Operations Category
Meanwhile, the Finance and Operations categories offer growing opportunities for digital health businesses.
For example, Progyny manages fertility benefits for employers. Similarly, CoverMyMeds improves operational efficiency by automating the prior authorization process.
Two value pools in this category have the highest compound annual growth rates (CAGR) in digital health. Optimize the Financial Model grows at 18%. Enhanced Operational Efficiency follows at 15%. Moreover, companies in these areas often receive higher valuations.
In 2019, the Finance and Operations sector had an estimated market value of $26 billion. This represented 7% of the total digital health market. However, only 12% of digital health firms competed in this category.
Therefore, this expanding industry may suit non-traditional digital health businesses. Companies with strong financial improvement solutions may find valuable opportunities.
How Do Digital Health Businesses Usually Show Value?
One major benefit of healthcare app development is reducing healthcare costs.
Based on 2018 healthcare expenditure statistics, digital health treatments could save approximately US$500 billion if fully implemented.
However, not all solutions deliver immediate cost savings. Some value pools offer more measurable benefits than others.
Care Delivery Cost Reduction
The three care delivery value pools focus on effective therapies, remote assistance, and patient treatment. Together, they offer the most measurable cost-saving potential in the United States. Their combined potential is approximately $270 billion.
Technologies in these areas reduce the costs of delivering and managing treatment. Consequently, both payers and patients benefit from lower healthcare expenses.
Similarly, technology that improves operational efficiency can increase productivity. It could also reduce US healthcare expenditures by approximately $180 billion.
Companies in this value pool are more likely to achieve savings through technological improvements. In contrast, clinical innovations may require more time. This difference may explain why nearly half of the CEOs in this category come from non-medical industries. Many have backgrounds in technology.
Pharmaceutical firms in regions severely affected by COVID-19 face risks from clinical study interruptions and delays.
Therefore, tools that improve drug R&D processes are increasingly valuable. These include virtual trial support and real-world evidence collection.
Meanwhile, payers face significant financial constraints. They must manage lengthy hospital stays and ensure patient access to treatment. As a result, solutions that improve financial models may offer substantial support. Early screening can also help prevent diseases and reduce healthcare costs.
Additionally, companies providing patient treatments may attract renewed interest from payers. These organizations seek innovative, health-focused mobile app development solutions to reduce healthcare expenses.
Conclusion
Digital healthcare app development is helping the medical sector achieve a long-standing goal. It aims to reduce costs while improving patient outcomes. This approach is particularly important given the impact of the COVID-19 pandemic.
By selecting the right value pools and prioritizing effective strategies, healthcare investors can identify growth opportunities. Consequently, businesses can expand in the fast-growing digital health sector. These efforts can also improve patient care worldwide.
