Digital solutions supporting consumer health and wellness are proliferating, driven by the take-up of wearables and a growing supply of data from consumers, advertisers, insurers and healthcare providers. In this report we explore the ecosystem, and discuss the key players and opportunities, the likeliest areas for disruption, and the potential opportunities for telcos, as well as presenting case studies of the digital health strategies of Google, Apple and Microsoft.
With the ever-increasing amount of data collected by smartphones, fitness monitors and smart watches, telcos and other digital players are exploring opportunities to create value from consumers’ ability to capture data on many aspects of their own health and physical activity. Connected devices leverage inbuilt sensors and associated apps to collect data about users’ activities, location and habits.
New health-focused platforms are emerging that use the data collected by sensors to advise individual users on how to improve their health (e.g. a reminder to stand up every 60 minutes), while enhancing their ability to share data meaningfully with healthcare providers, whether in-person or remotely. This market has thus far been led by the major Internet and device players, but telecoms operators may be able to act as distributors, enablers/integrators, and, in some cases, even providers of consumer health and wellness apps (e.g., Telefonica’s Saluspot).
High level drivers for the market
At a macro level, there are a number of factors driving digital healthcare. These include:
- Population ageing – The number of people globally who are aged over 65 is expected to triple over the next 30 years , and this will create unprecedented demand for healthcare.
- Rising costs of healthcare provision globally – Serving an aging population, the increase globally in lifestyle and chronic diseases, and rising underlying costs, is pushing up healthcare spending – while at the same time, due to economic pressures there are more limited funds available to pay for this.
- Limited supply of trained clinicians – Policy issues and changes in job and lifestyle preferences are limiting both educational capacity and ability to recruit and retain appropriately trained healthcare staff in most markets.
- Shift in funding policy – In many countries, funding for healthcare is shifting away from being based on reimbursement-for-events (e.g., a practice or hospital is paid for every patient visit, for each patient they register, for each vaccination administered), to a greater emphasis on ‘value-based care’ – reimbursement based on successful patient health outcomes.
- Increased focus on prevention in healthcare provision – in some cases funding is starting to be provided for preventative population health measures, such as weight-loss or quit-smoking programmes.
- Development of personalised medicine – Personalised medicine is beginning to gain significant attention. It involves the delivery of more effective personalised treatments (and potentially drugs) based on an individual’s specific genomic characteristics, supported by advances in genotyping and analytics, and by ongoing analysis of individual and population health data.
- Consumerisation of healthcare – There is a general trend for patients – or rather, consumers – to take more responsibility for their own health and their own healthcare, and to demand always-on access both to healthcare and to their own health information, at a level of engagement they choose.
The macro trends above are unlikely to disappear or diminish in the short-to-medium term; and providers, policymakers and payers are struggling to cope as healthcare systems increasingly fall short of both targets and patients’ expectations.
Digital healthcare will play a key role in addressing the challenges these trends present. It promises better use and sharing of data, of analytics offering deep insight on health trends for individuals and across the wider population, and of the potential for greater convenience, efficacy and reach of healthcare provisioning.
While many (if not most) of the opportunities around digital health will centre on advances in healthcare providers’ ICT systems, there is significant interest in how consumer wellness and fitness apps and devices will contribute to the digital health ecosystem. Consumer digital health and wellness is particularly relevant to two of the trends above: consumerisation of healthcare, and the shift to prevention as a focus of both healthcare providers and payers.
Fitness trackers and smartwatches, and the associated apps for these devices, as well as wellness and fitness apps for smartphone users, could open up new revenue streams for some service providers, as well as a vast amount of personal data that could feed into both medical records and analytics initiatives. The increasing use of online resources by consumers for both health information and consultation, as well as cloud-based storage of and access to their own health data, also creates opportunities to make more timely and effective healthcare interventions. For telcos, the question is where and how they can play effectively in this market.
Market Trends and Overview
The digital healthcare market is both very large and very diverse. Digital technologies can be applied in many different segments of the healthcare market (see figure below), both to improve efficiency and enable the development of new services, such as automated monitoring of chronic conditions.
The different segments of the digital healthcare market
Source: STL Partners based on categories identified by Venture Scanner
The various segments in Figure 1 are defined as below:
- Mobile fitness and health apps enable consumers to monitor how much exercise they are doing, how much sleep they are getting, their diet and other aspects of their lifestyle.
- Wearable devices, such as smart watches and fitness bands, are equipped with sensors that collect the data used by fitness and health apps.
- Electronic health records are a digital record of data and information about an individual’s health, typically collating clinical data from multiple sources and healthcare providers.
- Services search are digital portals and directories that help individuals find out healthcare information and identify potential service providers.
- Online health sites and communities provide consumers with information and discussion forums.
- Healthcare marketing refers to digital activities by healthcare providers to attract people to use their services.
- Payments and insurance – digital apps and services that enable consumers to pay for healthcare or insurance.
- Patient engagement refers to digital mechanisms, such as apps, through which healthcare providers can interact with the individuals using their services.
- Doctor networks are online services that enable clinicians to interact with each other and exchange information and advice.
- Population health management refers to the use of digital tools by clinicians to capture data about groups of patients or individuals that can then be used to inform treatment.
- Genomics: An individual’s genetic code can be collated in a digital form so it can be used to understand their likely susceptibility specific conditions and treatments.
- Medical big data involves capturing and analysing large volumes of data from multiple sources to help identify patterns in the progression of specific illnesses and the effectiveness of particular treatment combinations.
- Electronic medical records: A digital version of a hospital or clinic’s records of a specific patient. Unlike electronic health records, electronic medical records aren’t designed to be portable across different healthcare providers.
- Clinical admin: The use of digital technologies to improve the efficiency of healthcare facilities.
- Robotics: The use of digital machines to perform specific healthcare tasks, such as transporting medicines or spoon-feeding a patient.
- Digital medical devices: All kinds of medical devices, from thermometers to stethoscopes to glucosometers to sophisticated MRI and medical imaging equipment, are increasingly able to capture and transfer data in a digital form.
- Remote monitoring involves the use of connected sensors to regularly capture and transmit information on a patient’s health. Such tools can be used to help monitor the condition of people with chronic diseases, such as diabetes.
- Telehealth refers to patient-clinician consultations via a telephone, chat or video call.
The wellness opportunity
This report focuses primarily primarily on the ‘wellness’ segment (highlighted in the figure below), which is experiencing major disruption as a result of devices, apps and services being launched by Apple, Google and Microsoft, but it also touches on some of these players’ activities in other segments.
This report focuses on wellness, which is undergoing major disruption
Source: STL Partners based on categories identified by Venture Scanner
- Executive summary
- High level drivers for the market
- Market Trends and Overview
- Market size and trends: smartwatches will overtake fitness brands
- Health app usage has doubled in two years in the U.S.
- Are consumers really interested in the ‘quantified self’?
- Barriers and constraining factors for consumer digital health
- Disruption in Consumer Digital Wellness
- Case studies: Google, Apple and Microsoft
- Google: leveraging Android and analytics capabilities
- Apple: more than the Watch…
- Microsoft: an innovative but schizophrenic approach
- Telco Opportunities in Consumer Health
- Recommendations for telcos
- Figure 1: The different segments of the digital healthcare market
- Figure 2: This report focuses on wellness, which is undergoing major disruption
- Figure 3: Consumer digital health and wellness: leading products and services, 2016
- Figure 4: Wearable Shipments by Type of Device, 2015-2020
- Figure 5: Wearable OS Worldwide Market Share, 2015 and 2019
- Figure 6: Take-up of different types of health apps in the U.S. market (2016)
- Figure 7: % of health wearable and app users willing to share data US market (2016)
- Figure 8: Elements of the ‘quantified self’, as envisioned by Orange
- Figure 9: Less than two-third of US wearable buyers wear their acquisition long-term
- Figure 10: Google Consumer Health and Fitness Initiatives
- Figure 11: Snapshot of Google Fit User Interface, 2016
- Figure 12: Google/Alphabet’s areas of focus in the digital healthcare market
- Figure 13: Apple’s Key Digital Health and Wellness Initiatives
- Figure 14: Apple Health app interface and dashboard
- Figure 15: Apple’s ResearchKit-based EpiWatch App
- Figure 16: Apple’s current areas of focus in the digital healthcare market
- Figure 17: Microsoft Consumer Fitness/Wellness Device Initiatives
- Figure 18: Microsoft Health can integrate data from a range of fitness trackers
- Figure 19: Microsoft Consumer Fitness/Wellness Applications and Services
- Figure 20: The MDLive Telehealth Proposition, August 2016
- Figure 21: Microsoft’s areas of focus in the digital healthcare market
- Figure 22: Telefónica’s Saluspot: Interactive online doctor consultations on-demand