A digital revolution in healthcare is speeding up

3 min readNov 21, 2017

# In addition to the Applying Data Analytics to the Healthcare Sector

Healthcare has been over-regulated and expensive to innovate sector, and has a history of failing to implement ambitious technology projects, hence, only a couple of giant pharmaceutical and healthcare firms had a privilege to control it. But the momentum towards a digital healthcare future is gathering in popularity. As we can observe in the chart below, investments into digital healthcare has rapidly increased since 2010.

There are three main reasons for this change:

· Costs:

In developed countries around 50% of healthcare expenditure is inefficient, caused by wrong or unnecessary treatments or other administrative issues. In the US alone, healthcare expenditures accounted for approx. $3.2 tn in 2015, what is 18% of the total countries’ GDP, and it is predicted to increase even more in the future with the current system, as aging population increases.

· Change in customers’ perception:

Nowadays, customers seem to be readier to accept digital healthcare products than it was a couple years ago. The reason for that might be the confidence customers gain from the positive experience with the current digital innovations in healthcare.

· Lack of transparency in the current system:

As already mentioned, innovation in the healthcare industry has been in the hands of very few giant companies and hospitals so called “traditional innovators” including GE Healthcare, Roche, Novartis, Merck, Siemens, Pfizer, GSK, Sanofi among others which had oligopolistic power to produce drugs and other healthcare products they will benefit the most from. With the digital innovation as medical reports get digitalized, insures as well as the government could obtain much better insight into which treatment truly works best for a patient, and demand for value-based reimbursement i.e. for example if a drug is proved to be inefficient, customers will stop buying it anymore, and look for a better one.

Thus, there is no doubt that a current healthcare system is ripe for digital disruption; the only question is who will benefit the most from it?

One can find a number of publications which predict that “traditional innovators” in the healthcare industry will be taken over by modern tech companies (See 2) from Resources). On the other hand, one can argue that existing companies can be the first one to implement these changes in the industry. Whatever opinion one might share, it has to be considered, that it is a very delicate industry, in which people’s lives can be endangered if something goes wrong. Thus, the only one who should mostly benefit from the healthcare revolution are customers (patients), but would this be possible, if the revolution in healthcare speeds up too fast? This remains an extremely important issue.

Resources:

A digital revolution in healthcare is speeding up

Written by Maja Bratovic