For many companies, 2020 has been a devastating year due to the consequences of the COVID-19 pandemic. While the same can be said for the digital health sector, the pandemic has also paved a way for unexpected and extraordinary business opportunities in 2021. Good ideas with a business loan from online lenders such as Biz2Credit are the ingredients for a successful business venture in this pandemic.
In 2020, Digital health start-ups and more established companies have suffered, as have other companies from a variety of industries. We have seen governments set up rescue funds for start-ups, including those that offer services for the healthcare industry.
On the other hand, the pandemic was an accelerator for breaking digital health solutions into traditional healthcare systems around the world. This created new business opportunities for a range of digital health services that are directly linked to the pandemic, which will last throughout 2021 and beyond. What are those segments that offer substantial business opportunities for the digital health industry in 2021?
Top 5 business opportunities that offer substantial business opportunities for the digital health industry in 2021:
1) COVID-19 monitoring and quarantine management, vaccination symptoms tracking, and “back to work” digital health services: The market was kick-started by companies like Salesforce, Verily, and hundreds of other digital health tracking tools that quickly transferred their existing products into COVID-19 tools. The main target groups of these solutions have been governance bodies or hospitals.
With the expected decline in new infections in 2021, the focus on digital health applications will shift.
– Back to work services: Back to work services will flourish. Digital health solutions have been selling to employers for years, but during the current return to work efforts, the employer channel has never been a better fit. Technology is being developed and tailored to address the core needs of employees. An un-counted number of employers around the world require tools and services that allow for the safe return of their staff into offices and factories. This includes health screening before entering the workplace, monitoring services like sensors that track biometrics and alert of a change in health status, contact tracing, testing, solutions for employee safety training, communication among employees and employers, mental and emotional health services, solutions for employers to track workplace- and community-level health data, and the management of back to work processes.
– Symptoms tracking services for vaccination campaigns targeting CROs, pharmaceuticals, government bodies, hospitals like Self Care Catalyst or Well Me will come to the fore just as the whole world demands it. It will be big.
– Vaccination administration support services: Other opportunities will arise from the fact that providers must administer the most complex vaccination initiative in history. Service offerings include identifying patients who are eligible for the vaccine, appointment scheduling, and reminders for a second dose, all while sharing data to the provider’s EHR to help them keep track of their vaccinated patients. Notable Health and Zocdoc are two of the first companies that recently adopted their service offerings to serve this market.
2) Telehealth services: The second wave has again raised the level of telehealth adoption and usage around the world. The telehealth visit share raised up to more than 10% (R2G research 2020) in most mature western countries. Governments waived restrictions and released reimbursement codes for telehealth tech licenses and service offerings throughout the world. With the second and potentially third wave in high numbers of infections stretching far into 2021, the regulatory framework for telehealth services will continue to be positive. In addition, Telehealth users have gained trust in these services and will continue to use them in the post-pandemic world.
A global R2G telehealth user and HCP survey in 2020 shows that 66% of telehealth users say that they will use the service more often in the future. New users as well as HCP acceptance of telehealth services will result in substantial business opportunities in 2021 for companies that offer tech licenses, consultation services, or prescription services, to name just a few of the possible telehealth business models.
3) Remote patient monitoring service (RPM): If 2020 was the breakthrough year for telehealth service, 2021 will be the year of RPM. This will be mainly driven by tech providers, hospitals and the increasing usage of digital services by HCPs, and new RPM reimbursement codes in the USA and other western countries. DTX providers like Tactio or Biobeat have started to adopt RPM services themselves, or have licensed their tools to hospitals and care providers.
Potential revenue per user and month for RPM service is high ($50-$150 PUPM) compared to the average digital health service offering pricing ($5-&70 PUPM).
4) Home fitness: Home workout tech represents a great opportunity for digital health companies in 2021, propelled by months of lockdown behind and ahead of us. One on one fitness coaching (e.g. Future), paired fitness equipment and virtual classes from companies like Peloton, as well as Apple’s Fitness + platform for Apple Watch, which includes monitored video-based fitness tutorials, are just a glimpse into potential service opportunities that will be in high demand in 2021.
5) Investors: Investment money has always been a great source of income for digital health start-ups and established companies alike. The hype around digital supported remote patient care service peaked in 2020, partly due to the pandemic. “In 2020, startups raised a record-shattering total of $14.1B in venture funding—1.7X more than 2018’s previous high water mark” (Rock Health). A few dozen of the IPOs of digital health companies also show investors that a successful exit is possible within a short time frame. All drivers of the hype will remain in 2021, creating a substantial financing opportunity for digital health companies. Update your pitch deck!
The increased demand for digital services will continue beyond this year. Nevertheless, the course will be set in 2021 (e.g. contracts with vaccination centers, insurance companies, or CROs). Companies that want to benefit from these megatrends must now adapt their services and go-to-market approaches.
About Ralf-Gordon Jahns, Managing Director of R2G
Ralf-Gordon Jahns is the Co-Founder and Managing Director of Research2Guidance, a leading market analyst and strategy consultancy company for the global digital health market. He recognized early on the key role digital technologies will play in disrupting the healthcare industry. Since 2008 Ralf strategically advises healthcare companies and start-ups to better understand the value of adopting digital innovations, navigate through untapped / new market opportunities and create best in class digital health solutions to greatly improve the quality of people’s lives.
Ralf is passionate about digital health and strongly believes in giving something back to the growing global digital health business community. In 2010 he launched the “mHealth Developer Economics” research program, the largest digital health research program globally, with yearly publications available to the global health community.