Top 5 business opportunities in Digital Health for 2021
For many companies in all sectors, 2020 was a devastating year due to the consequences of the COVID-19 pandemic. While the same can be said for the digital health sector too, the pandemic has also paved the way to unexpected and extraordinary business opportunities in 2021…
In 2020, digital health start-ups and more established companies have suffered, as have other companies from a variety of industries. We have seen governments set up rescue funds for start-ups, including those that offer services for the healthcare industry.
On the other hand, the pandemic was an accelerator for digital health solutions breaking into traditional healthcare systems around the world. This created new business opportunities for a range of digital health services that are directly linked to the pandemic, which will last throughout 2021 and beyond.
But what are those segments that offer substantial business opportunities for the digital health industry in 2021? We talk to Ralf Jahns, MD of Research2Guidance about his Top 5 business opportunities for the digital health industry in 2021:
1) COVID-19 monitoring and quarantine management, vaccination symptoms tracking, and “back to work” digital health services:
The market was kick-started by companies like Salesforce, Verily, and hundreds of other digital health tracking tools that quickly transferred their existing products into COVID-19 tools. The main target groups of these solutions have been governance bodies or hospitals. With the expected decline in new infections in 2021, the focus on digital health applications will shift.
Back to work services:
Back to work services will flourish. Digital health solutions have been selling to employers for years, but during the current return to work efforts, the employer channel has never been a better fit. Technology is being developed and tailored to address the core needs of employees.
A number of employers around the world require tools and services that allow for the safe return of their staff into offices and factories. This includes health screening before entering the workplace, monitoring services including sensors that track biometrics and alert of a change in health status, contact tracing, testing, solutions for employee safety training, mental and emotional health services and the management of back to work processes.
Symptoms tracking services for vaccination campaigns:
Products from companies such as Self Care Catalysts and Well Me which target CROs (Contract Research Organisations), pharmaceuticals, government bodies and hospitals will come to the fore.
Vaccination administration support services:
Other opportunities will arise from the fact that providers must administer the most complex vaccination initiative in history. Service offerings include identifying patients who are eligible for the vaccine, appointment scheduling, and reminders for a second dose, all while sharing data to the provider’s EHR (Electronic Health Record) to help them keep track of their vaccinated patients. Notable Health and Zocdoc are two of the first companies that recently adopted their service offerings to serve this market.
2) Telehealth services
The second wave has again raised the level of telehealth adoption and usage around the world. The telehealth visit share raised up to more than 10% (R2G research 2020) in most mature western countries. Governments waived restrictions and released reimbursement codes for telehealth tech licenses and service offerings throughout the world.
With the second and potentially third wave in high numbers of infections stretching far into 2021, the regulatory framework for telehealth services will continue to be positive. In addition, telehealth users have gained trust in these services and will continue to use them in the post-pandemic world. A global R2G telehealth user and HCP survey in 2020 shows that 66% of telehealth users say that they will use the service more often in the future.
New users will result in substantial business opportunities in 2021 for companies that offer tech licenses, consultation services, or prescription services, to name just a few of the possible telehealth business models.
3) Remote patient monitoring service (RPM)
If 2020 was the breakthrough year for telehealth service, 2021 will be the year of RPM. This will be mainly driven by tech providers, hospitals and the increasing usage of digital services by HCPs (Health Care Professionals), and new RPM reimbursement codes in the USA and other western countries.
Providers including Tactio and Biobeat have started to adopt RPM services themselves, or have licensed their tools to hospitals and care providers. Potential revenue per user and month for RPM service is high ($50-$150 PUPM) compared to the average digital health service offering pricing ($5-&70 PUPM).
4) Home fitness
Home workout tech represents a great opportunity for digital health companies in 2021, propelled by months of lockdown behind and ahead of us. One on one fitness coaching (e.g. Future), paired fitness equipment and virtual classes from companies like Peloton, as well as Apple’s Fitness + platform for Apple Watch, which includes monitored video-based fitness tutorials, are just a glimpse into potential service opportunities that will be in high demand in 2021.
Investment money has always been a great source of income for digital health start-ups and established companies alike. The hype around digital supported remote patient care service peaked in 2020, partly due to the pandemic. “In 2020, startups raised a record-shattering total of $14.1B in venture funding—1.7X more than 2018’s previous high water mark” (Rock Health).
A few dozen of the IPOs (Initial Public Offering) of digital health companies also show investors that a successful exit is possible within a short time frame. All drivers of the hype will remain in 2021, creating a substantial financing opportunity for digital health companies.
The increased demand for digital services will continue beyond this year. Nevertheless, the course will be set in 2021 (e.g. contracts with vaccination centres, insurance companies, or CROs).
Companies that want to benefit from these megatrends must now adapt their services and go-to-market approaches.
See also R2G’s whitepaper Digital Health In Corona Times: How Can Digital Health Support The Management Of The Pandemic?