At the start of every year, Frost & Sullivan’s Transformational Health team brainstorms top predictions for the healthcare space. Despite on-going political uncertainties and rising cost pressures, the global healthcare industry will register a stable growth rate in 2018 and will cross the $1.85 trillion mark in terms of manufacturer revenue. Digital health investments crossed $6.5 billion in 2017, up 109% from the previous year. This growth curve is expected to continue in 2018 as technologies and platform solutions that promote innovation around care quality, outcomes, and chronic disease management will continue to rise. High growth opportunities in emerging markets will change the paradigms of product development and geographic rollouts.
Frost & Sullivan’s top 10 predictions for global healthcare for 2018 are as follows:
Prediction 1: Service-as-product solutions will become powerful tools to achieve competitive advantages in healthcare
X-as-a-service model will gain prominence and open up new revenue streams for the future sustainability of the healthcare industry. In addition, estimate service-based models will contribute a 2-3% revenue share for leading drug and device companies over the next 2-3 years. Entailing this transition to service-focused Product-as-a-Service (PaaS) and Data-as-a-Service (DaaS) business models, funding, spend, and revenue will continue the shift from CAPEX to OPEX in cognition of the IT enablement of desired business outcomes. Turning data into action will be the new sources of innovation and service-oriented future revenue streams where differentiation through intelligent solutions and services for outcome-based health benefits will be critical to demonstrate value to end users.
Prediction 2: As stakeholders demand cost efficiency, cloud will emerge as a core platform across multiple sectors
With the rising volume and complexity of healthcare data, cloud will emerge as a core platform as data storage flexibility needs to be expanded across all stakeholders. The global healthcare cloud computing market revenue for providers is expected to cross the $5 billion mark in 2018, growing by an estimated 24% from 2017 to 2022. The rising demand to deliver value-based care and precision medicine practices necessitates the deployment of scalable cloud platforms to integrate diverse health data sets to promote care coordination and help healthcare providers establish new care models (telehealth and homecare, for example) and actionable real-time analytics solutions.
Prediction 3: Large technology companies will see high rewards from their investments
In 2018, the FDA program designed to fast track digital therapeutics and health apps will provide significant impetus for non-traditional participants, such as Apple, Verily (Google), Samsung, and Fitbit, to enter the medical-grade arena. Moreover, there will be a fundamental convergence of healthcare with IT and retail industries to leverage technology and business model-related best practices to excel in terms of patient centricity and innovation.
Prediction 4: The adoption of virtual and remote clinical trials will increase with a focus shift to efficiency and patient centricity
The early application and integration of wearable devices and smartphone app data demonstrate compelling benefits around reducing trial costs, streamlining trial processes, and demonstrating real-world efficacy. As a result, approximately 20% of global clinical trials will adopt some form of virtualization – mHealth solutions will gain maximum traction over the next 12-18 months. Technologies such as wearables and the aforementioned mHealth, which have been traditionally under-utilized in clinical research, are gaining traction with bring your own device (BYOD) models and are quickly becoming a standard.
Prediction 5: Robotics for surgery and care assistance in hospitals will attain high penetration
The need to improve care worker productivity and reduce routine medical errors will propel the demand for global care assistance and automation robots. The automation robots market is expected to cross $1.6 billion in 2018. As competition intensifies, finding the right type of partner for the right type of robotic technology in any segment will be the key to gain early leadership and traction. By 2025, 80% of surgical procedures are likely to be performed by robots.
Prediction 6: Asia-Pacific countries will take the lead in terms of smart hospital projects
Several digital advancements and market trends, including the smart city concept, are pushing the need for hospitals to become smart. By 2018, South Korea, Australia, Singapore, and Malaysia will account for approximately 3,200 smart hospital beds. However, interoperability and cybersecurity will continue to remain major hurdles in the implementation of smart hospital solutions.
Prediction 7: Despite increased investments by healthcare stakeholders, cyberattacks in the healthcare industry will double in 2018
As the industry continues to digitize its information, it will attract more attention from cybercriminals. Therefore, cybersecurity hacking is likely to result in a significant multi-million dollar risk for a medical technology or a consumer device company. This makes it essential for governments, health authorities, and medical device OEMs to work more collaboratively to release frequent guidelines and manufacturer disclosure statements for stronger awareness and to also develop risk management solutions.
Prediction 8: Incentive-based wellness programs will gain popularity
Based on industry estimates, about 52% of the global workforce is overweight and 76% are struggling with their wellbeing. Despite this, just 9% of the workforce currently has access to some form of enterprise/employer-driven wellness program – making this a critical business imperative for employers. As a result, in 2018, data insight-driven incentives that impact premiums will become the standard for payer-corporate partnerships, which will help to drive global wellness programs. For example, private insurers such as Vitality and Prudential (myDNA) in South Asia; Discovery in Africa; UnitedHealth Group in the United States (Motion Program with Qualcomm Life); and Oscar in the United States will be at the forefront of this trend.
Prediction 9: AI will become mainstream for the imaging diagnostics segment
Artificial intelligence (AI) is expected to play a major role in the future of medical imaging by automating processes, improving workflow productivity, and increasing diagnostic accuracy. By operationalizing AI platforms across medical imaging workflows that leverage advanced or deep learning capabilities, a 10–15% gain in productivity will be realized by augmenting the work of radiologists and improving screening outcomes. This is likely to happen over the next 2-3 years.
Prediction 10: Blockchain will move from hype to reality and its initial use cases will generate ROI
Although blockchain is a nascent technology in the healthcare space, early adoption use cases, especially in the B2B space, will provide meaningful demonstrations of its value and potential. For example, in 2018, the initial implementation of blockchain solutions will begin to have implications across insurance claim management, clearing houses, and the revenue cycle management (RCM) outsourced vendor ecosystem. In addition, it will be an exciting year for initial coin offering (ICO) or token sale activity, with grand aspirations of disruption and consumer empowerment in the healthcare space.
2018 will definitely be an exciting year for healthcare; be prepared for some major transformations and new entrants in the market!
