The dawn of digital medicine: The pandemic is ushering in the next trillion-dollar industry

When it comes to digitisation, health care has lagged significantly behind most other industries (banking but travel, retail, car making and even packaged goods). Some 70% of American hospitals still fax and post patient records!

By exposing such digital deficiencies, the pandemic is at last spurring change. Confronted with shutdowns and chaos, doctors have embraced digital communication and analytics that have been common in other industries for years. Patients are growing more comfortable with remote and computer-assisted diagnosis and treatment. And enterprising firms, from health-app startups and hospitals to insurers, pharmacies and tech giants such as Amazon, Apple and Google, are scrambling to provide such services.

The groundwork for what looks poised to be the next trillion-dollar business has been accelerated by the pandemic. Money is pouring in. According to cb Insights, a research firm, a record $8.4bn of equity funding flowed into privately held digital-health darlings in the third quarter.

Technologies such as sensors, cloud-computing and data analytics are becoming medical-grade just as the risk of contracting covid-19 in hospitals and clinics makes their adoption look more enticing than ever. Specialist firms like Livongo and Onduo make devices to monitor diabetes and other ailments continuously. A study by Stanford University found that nearly half of American doctors surveyed used such devices. Of that group, 71% regarded the data as medically useful. In June the Mayo Clinic, a prestigious non-profit hospital group, teamed up with a startup called Medically Home to provide “hospital-level care”, from infusions and imaging to rehabilitation, in patients’ bedrooms. Even the Apple Watch has been shown to predict a medical problem known as atrial fibrillation in a clinical trial.

Patients are keen. A study of some 16m American ones just reported in jama Internal Medicine, a journal, found that their use of telemedicine surged 30-fold between January and June. American consumers surveyed in May by Gartner were increasingly using internet and mobile apps for a variety of medical needs.

Tech giants’ earlier forays into health care flopped, argues Shubham Singhal of McKinsey, because they had gone it alone. Medicine is a regulatory minefield with powerful incumbents where big tech’s business models, particularly the ad-supported sort, are not a natural fit. But the pandemic has also highlighted that existing providers’ snazzy hardware and pricey services too seldom genuinely improve health outcomes. If the new generation of digital technologies is to thrive it must “improve health, not increase costs”, thinks Vivian Lee of Verily. Her firm is moving away from fee-for-service to risk-based contracts that pay out when outcomes improve (eg, if diabetics get blood sugar under control or more people get eye exams).

That points to a hybrid future where Silicon Valley works more closely with traditional health-care firms. Epic is using voice-recognition software from Nuance, a startup, to enable doctors to send notes to outside specialists; it has also teamed up with Lyft, a ride-hailing firm, to ferry patients to hospitals. Siemens Healthineers, a big German health-tech firm, is working with Geisinger, an American hospital chain, to expand remote patient monitoring. Patients of India’s Apollo Hospitals can use an app to get drug refills, tele-consultations and remote diagnoses—and even secure a medical loan through Apollo’s partnership with hdfc Bank.

source: https://www.economist.com/business/2020/12/02/the-dawn-of-digital-medicine

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