Consumer Adoption in Digital Health

Light at the end of the tunnel

Things are changing. Surprise, surprise. The need in the market for digital health is real and the pandemic only accelerated this adoption. Policy also started to make the right moves by now: the implementation of electronic patient records in Germany is now part of the coalition agreement which is a first step in the right direction (maybe the second step after the implementation of the Digital Care Act 2020). This means: if people don’t actively tick a box that they don’t want a digital patient record, they will eventually get one.

How consumer behavior changed

Telemedicine obviously got a big boost during the pandemic – we don’t need to explain why. But more interestingly consumers stick to using substantially more telemedicine services even as lock-downs ended and doctors opened their doors again for in-house consultations. One survey showed that during the peak of the pandemic, telemedicine services got used 14% more often than before the pandemic. The levels came back to around 6% which is still much more than before.

Overall, it is safe to say that the acceptance of digital health services increased more than ever within the past 2 years.

The most likely users of telemedicine in 2020 remained consistent with past years: higher-income earners, middle-aged adults between 35 and 54, highly educated, and those with chronic diseases. This leaves still a lot of market potential for telemedicine solutions within all the untapped user groups.

Who is not using digital health services yet?

30% of respondents stated that they would still prefer to discuss health issues in person. Moreover, wearable smart health devices are not used by rural adults in lower-income classes, older generations, or less educated people. Since those devices are a lot of times the interface between the patient and a digital health application, it is important that the adoption of smart health devices is making progress. Policymakers and innovators alike must address barriers to technology and internet access as well as build solutions that account for segmented preferences and trust.

Innovation leads to higher demand and vice versa

What defines innovation? Substantial new and progressive solutions that consumers don’t know yet, but need. By creating innovative digital health solutions entrepreneurs are igniting a need in the market that consumers did not see yet. Did you feel like you desperately need grocery delivery in 10 minutes? No? How come Gorillaz went from zero to unicorn in less than a year?

The next logical step for digital health was to attract record breaking funding.

Recapping a breakthrough year

Overall investment nearly doubled in digital health from 2020 to 2021 – while 2020 was not a weak year at all. In 2021 we saw 4 (!) mega deals in digital health with more than $500M each. The top spot for healthcare funding goes to mental health. Regarding exits, we can state that an average of 23 digital health exits happened each month!

There are many factors that are driving the healthcare revolution that is happening right now. It is consumer adoption, innovation potential, money in the market, and political support. Aescuvest is seeing green lights in every single segment for more future growth in digital health. More and more money will flow into this space, more exits are going to happen and more investors will walk away with more than decent returns on their investment.

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