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Digital Health Growth Continues to Trend Upward

5 Min Read
Dan Martin, SVP of Client Relations, Healthcare at PAN Communications
Dan Martin
SVP, Client Relations | Boston, MA
  • Blog
  • Healthcare

Digital Health Growth Continues to Trend Upward

Dan Martin, SVP of Client Relations, Healthcare at PAN Communications
Dan Martin
SVP, Client Relations | Boston, MA

With more than 25 years of client experience, PAN has deep roots in the healthcare and HIT space. Over the past four to five years, as we have worked with many dynamic brands to build roadmaps for sustainable growth and long-term success through our NXT Stage approach, we have also closely monitored the unprecedented growth in the digital health market.

Back in 2017 we watched as VC funding in the segment topped $5B. Fast forward to 2020 and, according to Rock Health, digital health passed $10B in total funding for the first year ever, finishing at $14.6B. Now with three months left in the year, 2021 has already surpassed the $20B mark; 2021 Q1-Q3 total funding amounted to $21.3B across 541 deals, with an average deal size of $39.4M. The digital health market in the U.S. is estimated by numerous analysts to reach approximately $80.2B by the end of this year. Since 2010, digital health companies have received $59 billion in VC funding across more than 5,000 deals and almost $21 billion in debt and public market financing (including IPOs), according to Mercom Capital Group. On top of it all, the meteoric upward trajectory shows no signs of slowing any time soon.

Digital Healthcare Market Growth from VC investments

Factors shaping the state of the healthcare tech industry

The COVID-19 pandemic upended the entire health ecosystem—insurance, healthcare delivery, and pharmaceutical spaces were all impacted, perhaps permanently. At the same time, the industry saw strong provider adoption and usage of telemedicine, remote patient monitoring (RPM), and artificial intelligence (AI) to effectively treat patients from afar. But the pandemic and associated shutdowns are not the only factor in positioning the market for continued funding and growth for the foreseeable future.

Since the implementation of the HITECH (2009) and HIPAA (1996) Acts, which encouraged the usage of electronic health data and improved privacy and security protections for healthcare data, there have been significant improvements and advancements in healthcare technology. Some of those improvements are now coming to fruition in a healthcare environment that has witnessed a rapidly improving IT infrastructure and that is increasingly receptive to new, innovative ways to reduce costs and improve patient care. Many advancements have been implemented for positive impact by employers, providers and payers alike.

Technology innovations to reduce human errors and improve patient prognosis and overall quality patient care have also been large contributors. Those factors coupled with the rise in incidence of chronic diseases (including mental health) and growth in the aged population have helped fuel the demand for digital health technology—and buoyed the market’s growth.

Improving consumer experience

At the heart of all of this is today’s healthcare consumer. As costs have continued to rise—and as more of those costs have been pushed down to consumers by their health plan, employer, and/or provider—consumers have needed to become much savvier about spending and saving their healthcare dollars. This dynamic has them far more engaged and looking to interact with their healthcare in the same way they do with other industries such as banking and retail.

Data from Global Market Insights (GMI) shows that the penetration of smartphones, tablets and other mobile platforms is one-third among all U.S. adults. Also according to GMI, physicians are adopting these tools twice as much as the general population. Technologies focused on patient engagement, patient experience, care navigation and other innovations that not only educate and inform consumers so they can make the best choices possible about their care but also help guide them to the most appropriate care the first time have all played a role in advancing digital health. These technologies are further bolstered by innovations that have evolved to support patients outside a healthcare facility and in their own homes, as well as rehab centers or long-term care facilities that allow for remote patient monitoring.

As we continue to work closely with brands across the digital health market, we’ll also closely follow the trends, technologies and innovations that will shape the segment into 2022. Be sure to tune in later this year for our 2022 Digital Health Predictions blog.

In the meantime, if you are a communications or marketing professional looking for a firm that “gets it” and can help take your brand to the next level, please reach out! As we noted above, the sheer volume of VC deals in the digital health space has been astronomical—5,000 deals since 2010—which means the number of new market entrants (coupled with existing players) is making the space very noisy, cluttered and confusing. How are you going to make your mark, be heard and tell your story?

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