When we published our report on Connected Health earlier this year we focussed predominately on how technology could improve peoples’ access and ability to self-manage, develop better communication and understanding between patients and healthcare professionals and help health and social care providers deliver safer, more efficient and cost-effective care. One issue we found difficult to quantify was the current size of the digital health market in the UK. In September, our colleagues in Monitor Deloitte sought to tackle this issue and, on the basis of work commissioned by the Office of Life Sciences, published a report on the industry challenges and dynamics in the UK. This week’s blog highlights some of the key findings in this report and why the UK is well positioned to take advantage of the digital health opportunity.
The report, Digital Health in the UK: An industry study for the Office of Life Sciences acknowledges that digital health innovations are necessary for the future of efficient healthcare service delivery. Specifically, if the identified market challenges can be resolved, over time, then digital health advances have the potential to help increase access, decrease healthcare system costs and improve health outcomes. The report focuses on the UK in the context of the global market, drawing on examples from other countries to identify the challenges to growth, barriers to adoption, shifting dynamics and how the emergent industry is developing.
Overall, the report considers the UK to be well positioned in many elements of digital health with the potential to grow into a global leader. It examines four inter-related sub-sectors: telehealthcare (telecare and telehealth); mHealth; health analytics; and digital health systems (the primary care and hospital information systems used to collect data that is used for health analytics). Though these sub-sectors currently have different levels of maturity, rates of growth and market penetration the line between them is becoming increasingly blurred.
Telecare, which provides care and support at a distance based on fixed line, analogue technology, is a mature market in the UK with a strong UK heritage and the highest penetration per capita in the over 65s category of any global market. The strength of the UK market and global position is in part due to the UK being an early adopter, supported by a large local government programmes for telecare. However, the market is well established and not expected to grow rapidly (the UK market is forecast to grow at a compound annual growth rate (CAGR) of four to five per cent to 2018).
Telehealth, the remote exchange of clinical data between a clinician and their physician, is a faster growing and more dynamic market. While not positioned as strongly as telecare, there have been a number of initiatives designed to improve the evidence base and adoption. However, the evidence on cost-effectiveness from a large scale telehealth trial, was disappointing. As a result, adoption of telehealth faces a number of barriers, including the perceived lack of evidence around cost-effectiveness, reimbursement mechanisms and clinical buy-in. While reduced costs and improved capability of the technology are opening up new market opportunities, in the short- to medium-term, as fixed line and hardware-dependent systems become increasingly mobile-based, progress in the UK is at risk. Indeed, markets such as Spain and the USA are moving ahead with implementation of larger scale mobile enabled telehealth implementation.
mHealth, or health–related mobile applications (apps) and wearable devices, is an emerging market which is still small and fragmented. However, the mHealth apps sub-sector is growing rapidly, and is predicted to be the fastest growing segment in digital health, with a CAGR of around 35 per cent in the UK and 49 per cent globally. There is a high consumer demand for mHealth apps, but monetising them in the UK is difficult due to a lack of clear reimbursement models, both in the NHS and elsewhere in Europe.
The health apps market is segmenting into two distinct groups. The first group handling low-confidentiality data (personal wellness and activity data), usually a consumer-driven purchase with strong consumer interests attracting multiple companies into the space. The second group manages medium to high confidentiality data (health data, personal medical records and genomics data), used by clinicians, patients or hospital reporting systems. mHealth solutions in the second group offer the greatest potential to improve healthcare outcomes. The UK is already an attractive destination for app developers and wearable manufacturers, due to high levels of digital literacy and adoption. While there is a concentration of mHealth app companies around Greater London, the current industry for wearables is concentrated in the US, around Silicon Valley, with only a few UK companies.
Health analytics is an emergent and fast growing digital health sector. The market is currently relatively immature but expected to grow rapidly, around 24 per cent up to 2018. This growth could be exploited by UK industry to become a world leader in this sector, but barriers include the development of relevant skills and capabilities alongside data access challenges and governance issues. The UK, however, has a unique environment to develop the health analytics industry, combining the large volume of data being generated by digital health solutions with NHS medical records and investment in genomics. This is driven by a strong research and academic base and a willingness to develop the industry. Continuing to build the necessary infrastructure to access and use data will be key to fulfilling its potential.
The largest (and slowest growing) of the four sectors in the UK is digital health systems, including health records and e-prescribing, with an estimated total market size of £1.3 billion. The UK is a frontrunner in the use of primary care electronic medical records due to early government initiatives to support system uptake, while hospitals have generally lagged behind. Implementing the use of EMR platforms and investing in interoperability will help the market reach its potential. The aim is to move healthcare data securely across organisational boundaries, store highly confidential data safely, link data sets together and deliver consistent analytical methodologies. These actions are fundamental to improving the quality and efficiency of health care.
Digital health has enormous potential to improve access to healthcare. Wide scale adoption also has the potential to improve the efficiency, productivity and cost-effectiveness of healthcare delivery; but only if used as a lever to transform delivery systems. Health analytics, in particular, is already transforming our understanding of treatment pathways andpatient outcomes. We also know that digital health is central to the delivery of the Government’s NHS policy agenda and is a key enabler for realising the NHS Five Year Forward View.
The UK has significant opportunities to accelerate adoption of secondary care EHRs, mHealth and data analytics. Although the UK has historically been good at generating ideas it has been less successful at commercialising them, or building companies to scale, but there are now significant opportunities within digital health that the UK could exploit; building on current government policies and initiatives, and inherent strengths in certain skills and infrastructure. Developing partnerships between the public and private sectors will be critical to realise these opportunities.
There is also a need for the UK, to address a skills shortage in health analytics and IT; build commercial skills within health; improve clarity on how to access, transfer and analyse healthcare data; improve reimbursement policies; and build capabilities to commercialise and scale up UK companies. The Government also has a key role to play in providing the infrastructure such as regulatory frameworks and information governance to support the growth of the sector. However, by addressing these challenges and continuing to build on current initiatives, we believe the UK is well positioned to take advantage of the digital health opportunity.