Economics And Digital Health Market In 2020
In its most simple and concise definition, economics is the study of how society uses its limited resources. When we talk of healthcare and its stakeholders as society, and digital health as a market, we need to discuss the economics behind it.
The definition of digital health as given by Wikipedia states that it is the convergence of digital technologies with health, healthcare, living, and society to enhance the efficiency of healthcare delivery and make medicine more personalized and precise. According to the research report published by Market Research Future Reports, the global digital healthcare market has observed a tremendous growth by 11.8 percent CAGR, which is estimated to expand till the year 2023.
Today the digital health market is a rapidly expanding market because there are various influencing factors helping the market to grow, such as tremendous research and development in digital industry, technological advancements, increased penetration of mobile phones and internet network, increase in technical capabilities of common individuals in every household as well as increase in the number of tech-savvy work force in the industry.
It is a multi-disciplinary domain involving clinicians, researchers, and personnel with a wide range of expertise in healthcare, engineering, social sciences, public health, health economics, and data management.
The challenges for the digital health market in coming years will be to address the economics behind the decision-making process. While evaluating the digital health market on the economics principles, one easily focuses on the demand and supply part of it. There is a huge gap, or more or less a mismatch, between what various healthcare consumers are demanding when they think of digital health and what products are supplied to them. If we talk of wearable-devices market as an example, there are basic step and activity trackers and there are devices having facilities of blood pressure monitoring, ECG, etc. Newer and cheaper alternatives have opened up the market by generating the demand and exploring the untapped market by overcoming the affordability hurdle.
What is making things more complex is that there are too many stake holders in healthcare. There are individual patients and families, hospitals and healthcare delivery setups, insurance and third-party organizations, and regulatory organizations. So, to succeed in this market, the digital health product companies have to bridge this gap of expectations.
Second economic principle ruling this market is the opportunity cost of resource. Healthcare is not a resource-rich industry. Talented and qualified human resource, financial resource, technical and technological resource, all are scarce. So, when a consumer thinks about investing in digital health by purchasing new software or equipment, the foremost question that comes is whether the value of the next highest-valued alternative use of that investment will reap more rewards or not. And digital health brings along with it other hidden costs apart from digital infrastructure, which include cost of training and motivating the healthcare professionals to become technologically aware and accustomed to new processes. Today, many good digital platforms are underutilized or are not able to provide valuable data because the end-users are not convinced, trained, or motivated to use it correctly.
The third and one of the most alluring points is economic feasibility or economic viability of a product in digital health market. There are numerous factors like whether the product or project is able to generate funds by being the innovator or by having a larger impact on healthcare or by bringing more return on investments. Flexibility of modifications and universality for integrations are to be balanced to make the product feasible. So, it is not just what investment is done and how quickly returns will be generated but also how impactful digital health products will be for the society that will matter in the coming years.
