Growing home health market to bring in radically new digital solutions

BCG predicts a surge in new technologies and competition between ecosystems providing hybrid healthcare.

Digital health trends for 2023 are expected to focus on new technologies that allow populations to experience digital health solutions never seen before, according to management expert of Boston Consulting Group (BCG).

Anurag Agrawal, partner and associate director at BCG, revealed that both traditional and nontraditional players in the entire healthcare industry are now invested in the future of digital health, following the pandemic that shocked the world.

Although many organizations were not prepared for a pandemic situation, Agrawal said they realized quickly the need to be resilient through either supply chain changes or the right human capital interventions.

“COVID has served as a wake-up call for these players, they have invested in digital health at many times, disproportionately,” he said, adding that the unprecedented challenge prompted them to immediately address access to health services, especially for the remote and marginalised populations.

The response was monumental as digital-native players rapidly expanded their scale, offering innovative business models and wider suites of offerings in the health industry that has turned hybrid.

Traditional brick-and-mortar players invested in digital health and accelerated their digital plays, and new players continue to enter the market, looking to partner with digital-first players.

“COVID has served as a watershed moment. It led to rapid and mass uptake of digital health in many, many ways,” said Agrawal, who noted significant structural changes that ushered in not just digitalisation, but a growing momentum of the home health market post-pandemic.

As the world eased out of the pandemic, the home health market continued to be driven by an aging population and technological advances.

In addition, Agrawal noted the expansion of women’s health across fertility options, community-based care, alternative birth options, and the emergence of hybrid care models that continue to expand.

Based on these findings, the expert from BCG believes that there will be competition between ecosystems rather than individual players.

“So, winning will mean not having just a great product market fit, but also making wise choices about who you partner with and the ecosystem that you are building so that you can then compete with another ecosystem,” explained Agrawal.

In 2023, BCG sees new technologies such as virtual reality, digital twins, and generative AI emerging in digital health solutions. In this realm, hybrid care models will also emerge, targeting patients virtually and physically, said Agrawal.

Regarding women’s health, Agrawal expects an expansion of what is known as “femtech.” This ushers in a rapid growth across dimensions such as fertility options, community-based care, and alternative birth options.

But BCG has noted that in 2022, mega deals in late-stage startups declined dramatically due to capital supply challenges and founders avoiding raising capital at a smaller valuation.

Also, funding in digital health pivoted from top-line growth to profitability, and so more early-stage and smaller deals are expected.

Still, Agrawal sees exciting times in the health industry, as the structure evolves and new technologies expose more populations to never-before-seen digital health solutions.