Many if not most businesses have gone digital in one way or another. When it comes to digitization, health care dawdles behind banking, travel, car making and packaged goods. Approximately 70% of American hospitals still fax and post patient medical records. The COVID-19 pandemic is finally stimulating change. “Confronted with shutdowns and chaos, doctors have embraced digital communication and analytics that have been common in other industries for years.” Patients are growing more comfortable with telemedicine visits and computer-assisted diagnoses.
McKinsey is a worldwide management consulting firm. It was founded in 1926 by James O. McKinsey, a professor at the University of Chicago. McKinsey estimates that world-wide digital health revenues e.g., telemedicine, online pharmacies, wearables etc. will rise from $350bn in 2019 to $600bn in 2024. The healthcare market definitely in for a digital makeover. We are not alone in that the same thing is occurring in the Far East and in Europe. For example, AmWell, a telemedicine firm in which Google is invested hundred million dollars now has a market capitalization of $6 billion after a successful initial public offering.
Telemedicine is definitely on the rise particularly since the onset of the COVIT-19 pandemic. Doctolib, a French firm says that there video consultations in Europe have gone from 1000 to 200,000 per day. Although claims made by proponents of individualized “precision medicine” and medical artificial intelligence seem exaggerated there is reason to believe that much of their claim and excitement is not overblown. “Sensor technology, cloud computing and data analytics are becoming medical-grade just as the risk of contracting COVID-19 makes their adoption look more enticing than ever.” There are now devices to monitor diabetes and other ailments continuously. One study from Stanford found that approximately half of American doctors surveyed use such devices. Even the Apple Watch has been shown in clinical trial to predict and identify atrial fibrillation.
A recent study in JAMA, Internal Medicine found the use of telemedicine visits increased thirtyfold during the pandemic between the months of January and June. Consumers in the United States are increasingly using Internet and mobile applications for a variety of medical needs. Unlike the US European Union is promoting universal standard for all electronic medical records. A similar digital plan with interoperability is in the works for India. Epic, one of the leading makers of electronic medical records software noted that only 40% of their data are shared with non-customers.
Do these changes make the healthcare industry vulnerable to a takeover by big technology firms? Amazon once Alexa, with your permission, to analyze your cough and tell you whether it is “croupy or covidy?” In November 2020 Amazon launched a digital pharmacy to take on America’s drug distribution industry and retailers. Similarly, Alihealth, a division of Alibaba that is disrupting China’s home pharmacy market, reported a revenue increase of 74%, year-to-year.
The pandemic has also spotlighted that this expensive hardware and services offered by high-tech firms seldom improves health outcomes. This possibly points to a future which is a hybrid where Silicon Valley works with more traditional healthcare firms. There are several examples. Epic is using voice recognition software from Nuance (maker of Dragon) to assist doctors in sending notes to outside specialists. It is also teamed up with Lyft to bring patients to hospitals. Siemens is working with Geisinger, and American Hospital chain to expand remote patient monitoring. “ ‘Moving fast and breaking things does not work well in health care,’ observes Hemant Taneja of General Catalyst. “But nor does standing still.”