According to a survey from Telehealth vendor American Well, 66% of consumers are willing to try telehealth, but only 8% have actually done it and 17% of those interested in virtual care were unsure whether the service was covered by their insurance.
Another study (from health system Intermountain Healthcare) found that only 20% of people had heard of telehealth, which American Well called “a tremendous opportunity”.
Additionally, two thirds of Americans are using devices that help them monitor their personal health and 50% use health apps.
Berenberg
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Telehealth is clearly increasing in popularity – the number of physicians reporting telemedicine as a skill rose 20% per year over the past three years according to a study from professional medical network Doximity – with younger generations the most likely to make use of the new virtual care services (surprise).
According to a 2018 study published in the Journal of the American Medical Association (JAMA), virtually conducted doctor-patient visits increased by 261% yearly between 2015 and 2017.
However, the article also highlights the well-known gap between people saying they are willing to try something new and people actually then trying it – as well as the continued efforts required in consumer education.
The two key groups telemedicine providers have to convince are mothers (since they still handle the majority of their childrens’ doctor visits) and seniors (a tricky one, given the inherent reluctance to use the tech, but a lucrative and growing market which could probably be accessed by targeting the younger relatives who look after their care rather than the seniors themselves).
According to a new survey by Harmony Healthcare IT, millennials prefer getting medical advice online to going to their doctor; 76% of the respondents said they used specialized websites like WebMD or news articles.
It highlights the current transformation of the healthcare sector. Millennials, who will outnumber baby boomers by 20m in 2030, are favouring retail clinics and telehealth for healthcare treatment. The online presence of traditional providers is also important: 65% said they only see doctors who can be found online, with 48% saying they would prefer to have a virtual visit with a doctor than an in-person appointment.
One of the main argument is cost: WebMD for instance, the first choice website for those surveyed, is free, which makes it the economically more sensible option, as only 35% of those surveyed set aside savings for medical emergencies, with 51% of those saving less than US$100 per month.
Analysis and Comments
The first thing that is probably important to note about this survey is that the respondents are American (which explains the emphasis on cost advantages).
However, a much larger study conducted by Accenture in February looked at four times as many consumers from all around the world and came to similar conclusions: there is a shift away from traditional care offerings, towards online alternatives.
Importantly, this shift was not only found among members of the youngest generations (Millennials and Gen Z), but also Generation X (the one after the Boomers).
According to recent data from GoodRX, an app tracking drug prices, only 3% of insurance claims for Eli Lilly’s insulin were for the half-price version that the company revealed shortly before being questioned by Congress on soaring insulin prices.
According to the article, many pharmacists do not know that a cheaper version is available or it cannot be accessed because it wasn’t added to individual patient’s list of drugs that are covered.
The company said it was aggressively working to increase awareness as well as access to the cheaper diabetes drug.
Analysis and Comments
Best Healthcare analysts expect a strong downward pricing pressure and slowing volume growth for the previous classes of drugs such as DPP4 and basal insulins.
This will likely result in a slowdown in the sales growth for the global pharmaceutical market. We project the global diabetes pharma market to grow at only 3% CAGR to reach $46bn by 2025.
While the overall diabetes pharma market is set to slow, GLP1 and SGLT4 are likely to experience rapid growth.
Germany has introduced the new Digital Care Act, which builds upon the 2016 ‘E Health Act’ that focused on developing information and communication technology in healthcare, particularly in the form of ‘electronic health cards’ and ‘electronic patient files’.
The new Digital Care Act will enable doctors to prescribe health apps, the cost of which, under certain conditions, will be reimbursed by German statutory health insurances.
Additionally, the German Act that currently prohibits the advertising for remote consultations will be amended, and any planned regulations of the introduction of the ‘electronic patient file’ have been removed, in order to facilitate its launch at the turn of the year 2020/2021.
Analysis and Comments
The electronic health card serves as an insurance card for people with statutory health insurance, while the electronic patient file (which hasn’t been built yet) is a further development of the card.
The file will enable statutory health-insured people to access a broad range of medical information such as, for example, findings, diagnoses, therapy measures, treatment reports, and vaccine history.
A separate privacy law governing the sensitive health data that is to be recorded in the electronic patient file is due to come into effect in January 2021.
Ultimately, the new law simply recognises the fact that patients have already been using health apps of various kinds, and stresses Germany’s intent to introduce digital services such as the electronic patient records as soon as possible.
Australia recently introduced a similar patient file called ‘My Health Record’, which apparently not only many Australians have opted out of, but is currently often empty (i.e. not being used as information is not being shared in a meaningful way between all parts of the system).
On the 22nd July, in the last days of the May government in theUK, a green discussion paper was released on preventative healthcare. The report highlights the long term risk to health budgets if the emerging (& in some cases already emerged) life style risk factors (smoking, obesity, diabetes etc.) are not addressed
The report flags some of the recent successes, including the reduction in smoking (its now down to fewer than 1 in 6 of the adult population)
But, it also highlights some of the risk factors we are yet to find solutions to – of which the biggest is obesity (especially in children)
The report goes on to discuss the increasingly important role that technology will play in helping to solve these problems, obviously not on their own but as part of a wider shift in healthcare priorities
The article also highlights that only 5% of UK NHS spending (which is the bulk of the governments healthcare budget) goes on preventative medicine.
Analysis and Comments
This report and the related article picks up two very important issues in healthcare – that we think will have material impacts for investors.
Much of what we see in the industry around innovation is about better ways of doing the same thing (better heart valves, improved drugs etc). This is in of itself a good thing, but its not enough if innovation is really to make a difference to long term health outcomes
This article also picks up on the second important issue, institutional change. Across Europe much of our healthcare industry is driven by government spending & priorities. In such an environment, switching to preventative healthcare is tough as it does not really contribute to achieving short (or in some cases even medium) term goals.
The article picks out a number of areas where current technology, properly applied, could make a difference to longer term health outcomes. Inaddition, just yesterday, there were reports out can Google predict kidney disease, that suggest AI could be used to help identify those hospital patients that are at a high risk of developing kidney related complications. The current trial at the Royal London Free Hospital, seems to have gone well kidney app a life saver.
These technological advancements to really gain traction need a shift in emphasis among politicians, who set government healthcare priorities. When that happens we could see an explosion in opportunity for European healthcare companies.
According
to two chief executive of technology companies, Age-tech, i.e. applications of technology designed to address
issues faced by elderly people, are often left unexploited as they do not
appeal to “kids doing start-ups”.
Age
tech start-up Birdie has designed a
system for care workers to digitise and
keep track of notes on elderly people living in care facilities. The
company has thus far raised €9.5m,
with more than 100 UK providers already using the tech.
Birdie
is also trialling a combination of static
motion and sonar sensors designed to pick up irregularities in behaviour
through machine learning that could indicate health issues.
Another
tech company (which remains unnamed) is targeting the steadily growing Alzheimer’s therapeutics market through specially
designed devices/toys that stimulate cognitive function.
Analysis and Comments
The author makes an important point towards the end of the article by highlighting that the typical customer for technology such as the above is likely to be an older person who is caring for an elderly relative.
As such, players in this space that aren’t exclusively targeting care facilities are in the tricky position of having to design solutions for the use of people who themselves might be similarly uncomprehending of thetech as their elderly charges (the article includes an example of a healthcare start-up which failed for that reason).
Last year was an interesting year for Age-tech, as it saw PointClickCare, a leading Canadian SaaS platform targeted at the long-term and post-acute care market, valued at a minimum of USD1bn following its latest funding round.
See here for a 2019 Age-tech market map including both listed and private players.
