Corona 19, a revolutionary change in the health care industry

[헬스코리아뉴스 / 임도이] Due to the impact of COVID-19, the use of health and disease management apps is increasing, and patient and general affinity for the digital environment is rapidly increasing. The application of digital health applications beyond simple health care to disease management is expanding, and the global digital health market is predicted to surge 3.34 times from $152 billion in 2020 to $508 billion in 2027.

In the United States, investments in digital healthcare companies have doubled from $7.7 billion in 2019 to $14.6 billion in 2020. $14.7 billion was invested in the first half of 2021 alone, overtaking the amount invested in 2020.

In Korea, there is a need to promote the commercialization of various digital healthcare technologies through efforts to improve laws and systems and build stakeholder partnerships. [편집자 주]

According to the report ‘The Digital Health Industry Rising Rapidly After Corona 19’ published by the Korea Biotechnology Association on the 30th, the digitization of healthcare, which was under development before 2020, is due to the increase in healthcare demand after Corona 19 and the gap in the supply of medical personnel. was promoted in a short period of time.

Due to the COVID-19 outbreak, face-to-face medical treatment in the medical field has been significantly converted to telemedicine, and health using digital health is expanding due to the increased dependence of people around the world on smartphones after the pandemic. The size of the global digital health industry, which was $152 billion in 2020, is expected to increase by 3.34 times in 2027 to $508 billion.

What changes has COVID-19 brought to the digital health industry?

In a life isolated from COVID-19, patients and the general public are using various digital health services for digital treatment, virtual clinical trials and treatment, disease management, and health care at home. In 2020 alone, more than 90,000 new healthcare apps are being serviced, and more than 350,000 are currently in use.

Digital health services developed for consumers tend to go beyond simple health management and auxiliary means to advanced disease monitoring. While the application to exercise & fitness, diet & nutrition is decreasing, the use of specific diseases, medical institutions & medical insurance is gradually expanding. In particular, the use of apps related to specific diseases such as mental illness and diabetes is on the rise from 10% in 2015 → 16% in 2017 → 22% in 2020.

Digital health application segmentation and utilization rate
Digital health application segmentation and utilization rate

US digital health industry trends

The amount invested in digital health companies approximately doubled from $7.7 billion in 2019 to $14.6 billion in 2020, and $14.7 billion was invested in the first half of 2021 alone, exceeding the investment in 2020.

In the first half of 2021, there were 372 business-to-business deals, including 48 mega deals (investment of more than $100 million). The average transaction amount was $39.6 million, an increase of about 1.2 times from the previous year. Among the Mega Deals, the Mega-Mega deal is an investment in Noom, which helps health care by collecting diet/exercise-related information worth 540 million dollars, and is the largest digital healthcare field ever made.

There were 145 digital health company M&As in 2020 and 131 in the first half of 2021. In August 2020, Teladoc Health, the largest telemedicine service provider in the United States, acquired Livongo, the largest remote monitoring company in the United States, for $18.5 billion. Then, in April of this year, Microsoft acquired Nuance, an AI medical record technology company, and large IT companies such as Amazon, Microsoft, and Google also expanded their business into digital healthcare services by utilizing their strengths such as existing email servers and cloud storage. are actively seeking

COVID-19 has triggered changes in consumer health-related behaviors, such as people becoming increasingly accustomed to using a variety of virtual care and wellness products at home, which is being reflected in investment trends. Mega deals such as Noom, Ro, and Capsule made in the first half of 2021 show investors’ trust in the D2C (Direct to Consumer) business model.

In the case of new listings, there were 7 companies in 2020, but 11 companies were listed in the first half of 2021 alone.

Digital health industry contributes significantly to reducing health care costs

According to the McKinsey Global Institute, global health care spending, which reached $8.4 trillion in 2020, is projected to reach $14.5 trillion by 2030. It is expected to be lowered to $11.5 trillion. This shows that the digital health industry is making a significant contribution to reducing healthcare costs.

Bozider Jovicevic, global head of digital therapeutics at Sanofi, a French multinational pharmaceutical company, said, “If you look at the determinants of health announced by the WHO, 20% are medical care, 20-30% are behaviors, and the rest is environment and society. , genetics, mentality, etc.” He said, “Sanofi is focusing on 20% of medical care, but behavioral change is also a big factor.”

He also noted the potential for digital therapeutics, saying, “U.S. health care spending of $3.4 trillion is spent on diseases, but these diseases can be changed or reversed by behavioral changes.”

Korea’s digital health technology commercialization stage, the problem is improving laws and systems

On the other hand, according to a report published in December 2020 by the Korea Health Industry Development Institute, the size of the digital health industry in Korea is estimated to be 6,425.7 billion won as of 2019.

From a technical point of view in Korea, a wide variety of technologies have already been developed in digital health care and have reached the level of practical use. However, it has not been commercialized due to legal and institutional problems.

Accordingly, the report diagnoses that it is difficult to predict the size of the future digital health market due to regulatory issues on market entry despite the establishment of medical technology and high-level medical informatization infrastructure.

The report said, “The Korean government is promoting various regulatory improvement activities such as a telemedicine pilot project, safety management guidelines for mobile medical apps, criteria for judging medical devices and personal health care products, and guidelines for measures against personal information de-identification. ” he pointed out.

The report said, “Efforts to improve regulations related to digital healthcare are essential in order to secure regulatory clarity for the development of digital healthcare, to promote the growth of the digital healthcare market, and to minimize side effects.” advised

Experts believe that the domestic industry will be revitalized only when the domestic digital health category is uncertain, so it is necessary to establish the scope first, and improve the legal system such as the application of health insurance and medical device licensing and construction of medical data infrastructure.

Experts say, “In addition, it is necessary to quickly create a new digital healthcare market through consultations and partnerships among stakeholders.”

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