Healthcare: Is the industry ready for Big Tech disruption?
In recent years, Big Tech companies’ interest in the healthcare industry has strengthened. The global pandemic accelerated Big Tech’s march into a sector experiencing a digital revolution and generating an ocean of data. Today, after making vast fortunes from processing data, these companies are orienting their expertise to healthcare and are very keen to offer their services to overwhelmed healthcare systems.
The current state of healthcare
The rise in the number of wearable sensors, the digitization of patient records and expansion of virtual healthcare services formed digital biomarkers, this type of biomarkers is expected to have the biggest impact on medicine because of the vast amount of data it’s creating.
Benefiting from computing power and expertise in data analytics, Big Tech is entering a $3.6 trillion market in the U.S. just by utilizing the same tools that have allowed them to disrupt other industries.
GAMA’s interest in healthcare
Accelerated by the Covid-19 pandemic, the digitization of healthcare fueled investors interest in digital health companies raising a record $14.8 billion in VC funding in 2020 and amplified big 4 tech firms’ collaboration with healthcare industry and support of startups and new innovations. The chart below showcases the considerable interest in Telemedicine which increased by 140% compared to 2019.
At the same time, Big Tech companies are accelerating their presence in the healthcare market with different strategies. Below, we break down the tools and efforts of these players to disrupt healthcare.
Amazon launched a health care service called ‘Amazon Care’ for its own employees allowing them and their families to get in touch with health care providers within a minute of their requests. Amazon is also leveraging its delivery capabilities to make headway into the medical supplies’ distribution space.
In 2021, Microsoft announced that it had struck a $19.7 billion agreement to purchase Nuance Communications. This company’s technology is used by almost 80% of hospitals in the US and helps automate the process of taking notes during patient consultations, reducing the time doctors spend on administrative work.
Apple enables the collection of healthcare data via apps and wearable tech through the Apple Watch. The company has teamed up with various institutions to establish the clinical accuracy of Apple Watch features. One of the most recent ones showed that the cardiac metrics it monitors is as good as clinical tests. The results suggest that the Apple Watch could be adequate for remote monitoring of elderly patients with cardiovascular disease.
Google uses artificial intelligence to read electronic health records and then try to predict or identify medical conditions. The company uses machine learning to analyze a vast array of health records collected by hospitals and other medical institutions.
The matrix below showcases Big tech companies’ strengths, weaknesses, opportunities, and threats in the healthcare industry.
Challenges in Digital Healthcare
As the virus spread and safety concerns grew, virtual interactions became a necessity exposing weaknesses in healthcare infrastructure. Healthcare systems around the world have been quite slow in using modern technology to revolutionize their sector as revealed by a study conducted by OECD on 23 countries. The study indicates that many members of OECD have a high proportion of digitized health data but only a small percentage of them are regularly linked with other sources of information making vast quantity of data redundant.
In other words, Big Tech companies need to assemble and link datasets to give insights and identify patterns and trends. However, digitization of healthcare systems around the world is slowed by the technological readiness of some countries and lagging of regulatory legislation.
Evidently, governments play a crucial role in facilitating Big Tech’s entry in healthcare especially allowing access to patients digitized health records, a very sensitive subject considering tech companies’ spotty track record regarding privacy and use of personal data. A survey conducted by Rock Health shows that patient’s willingness to share health data, with technology companies is predictably low with only 11% of respondents willing to do so. By contrast, patients were more willing to trust their doctor as the study indicates that 72% of patients are willing to share health data with their physician.
This is not happenstance, Apple’s and Google’s previous mishandling of user data is slowing their progress in healthcare markets as they need to rebuild their public image before gaining patient’s trust back.
Outlook of Digital Health market
Big Tech giants are targeting a growing market armed with $500 billion in cash giving them a substantial force for disruption. A Roland Berger forecast predicts an estimated 24.7% CAGR in the global digital health market reaching $657 billion in 2025.
As tech companies move into healthcare, it is necessary for legacy players such as hospitals and pharmacies to adapt their strategies and embrace new technology like telehealth and remote patient monitoring tools. Products and solutions from tech companies will increasingly become more distributed and sophisticated as the quality and volume of data improves. It goes without saying that the future of healthcare will be told outside the hospital. In a future where healthcare is embedded into all aspects of everyday life, it will be crucial for Big Tech to win over consumer trust with their solutions and digital advances to make primary health care more convenient, accessible, and helpful to the general population.