Covid-19 accelerated the adoption of digital technologies in the delivery of healthcare, mostly arising out of need and necessity. While the pandemic laid bare the inadequacies in our healthcare systems, digital technology enabled the sector to leapfrog some of the gaps. The Healthtech vertical, in particular, has moved into the fast lane!

What is Healthtech?

Health technology (Healthtech) is the fastest growing vertical within healthcare technology sector, with $51.3 billion invested into global Healthtech companies in 2021. Healthtech includes any digital technology application or technology enabled product, that is consumed or delivered outside of a hospital setting.

Healthtech has also one category that exists within the hospitals; providing information technologies such as hospital management software, billing management and electronic health records, that help improve healthcare delivery while decreasing costs.

Healthtech is about prevention and monitoring rather than treatments, with a focus on enhancing the delivery, payment, and consumption of care. By leveraging emerging technologies such as cloud computing, deep learning, machine learning and IoT, Healthtech companies aim to optimise patient-centric healthcare.

Sorting through the Healthcare sector: Healthtech vs Medtech vs Biotech vs Insurtech

 Not all Healthcare technology is categorised as Healthtech. Since different technologies are applied to different parts of healthcare system – from organisation, diagnosis, treatment to drugs – the industry created various types of technologies to meet specific needs.

While Healthtech is centred around optimising personal and preventive care, Medtech focuses on therapeutics and diagnostic technologies used by doctors to detect and treat medical conditions. Medtech includes equipment, devices, machines, software, and many kinds of well-known tools such as prosthetics, inhalers, stethoscopes, surgery gloves, and MRIs. Medtech needs a regulated path to market as the solutions may have a severe effect on people’s health. Sometimes the line between Healthtech and Medtech is quite thin and not clearly defined – for example a pulse wearable if used at patients’ home is categorised as Healthtech, and it turns into Medtech if it is used and monitored inside a hospital.

Biotech focuses on technologies based on biology and living organisms; Biotech companies derive their products from the extraction or manipulation of living organisms. The identification of DNA has helped industry make great leaps, and this technology is mostly used to make new drugs derived from living organisms. Vaccines are also being produced with the help of biotechnology – Biotech companies like Moderna and BioNTech were the ones who developed mRNA vaccines for COVID-19. Biotech is heavily regulated and must undergo numerous clinical trials before they reach the market. There are many use cases for Biotech in other sectors such as agriculture where companies developed pest-resistant crops, created biofuels like ethanol, and developed gene cloning.

Insurtech challenges the traditional insurance models through use of technology to simplify the insurance process and enhance customer experience. Insurtech companies have led significant innovation and disruption in insurance markets by providing innovative services with flexible signups, micro payments, tele-health and wide range of services directly from the mobile. Insurtech companies are also integrating the elements of Healthtech to develop comprehensive patient centric solutions. Companies such as Vitality combined Healthtech applications (prevention care with wearables, access to providers etc.) with ease of using health insurance (immediate authorisation of treatments etc.) to empower patients to easily manage their care when they need it.

Healthtech in the fast lane

The global pandemic triggered large-scale responses by governments and healthcare providers alike, ushering in a new reliance on digital care delivery as well as innovations across healthtech.

Catalysed by the pandemic, an already growing Healthtech sector and investments reached record highs in 2021. UK and US are leading the way for innovation and are also driving the rapid growth in global Healthtech sector, with $51.3 billion funds invested into healthtech startups in 2021, up by 280% since 2016 (as reported by Dealroom).

The US leads globally with $31.9 billion in VC investment in 2021, while the UK comes in third with $3.8 billion, which is close behind China’s $4.1 billion. The UK Healthtech investment has risen from $420 million in 2016, which is an increase by nine times while US investment has increased by 3.4 times. (London & Partners)

Healthtech revenue is anticipated to reach $504.4 billion by 2025, up from $86.4 billion in 2018 (as reported by prnewswire).

Healthtech trends to watch

Healthtech will gain further momentum in 2022 as providers are looking for new and better ways to improve care, while patients now expect convenience and flexibility. Further, the world is ageing, increasing the cost of care globally, and the need for efficiencies and automation is more pressing than ever.

We believe startups will continue to lead the way in innovation with data becoming the central currency of healthcare. The advent of health technologies is carving a new path for the future, one with improved patient outcomes, reduced costs and enhanced care efficiency.

We will leave you with few Healthtech trends to watch, that have the potential to change the healthcare landscape in 2022 and beyond.

1. Digital Therapeutics (DTx) that deliver evidence-based therapeutic interventions directly to patients through digital apps.
2. Remote patient monitoring (RPM) solutions that provide access to real-time patient data through an array of medical devices such as implantables, sensors, blood pressure monitors and many others. RPM devices enable reliable, consistent monitoring and deliver high quality care outside traditional healthcare settings.
3. Smart wearables and devices that allow patients to play an active role in monitoring their health and help prevent chronic conditions.
4. Digital prescriptions (e-Rx) will drive digital health records for patients, which in turn will improve patient outcomes through effective collaboration and seamless clinical workflows.

We believe the technology driven response to address urgent needs will last well beyond the current health crisis, giving providers and patients new options for preventive care, diagnosis, and treatments, which should also be of interest to thematic investors. Technopreneurs in the healthcare technology space take note!