What’s fueling the next wave of HealthTech innovations?

Soma Tah 

HealthTech innovators need to look beyond the e-pharmacy and B2B solutions, as newer areas such as telemedicine, e-diagnostics, personal health, preventive healthcare are screaming for their attention. 

COVID-19 has exposed the most gaping problems in the Indian healthcare systems, but it also brought about changes that would have taken another decade if the pandemic did not happen. For example, we are talking about telemedicine, e-diagnostics, electronic health record (EHR), etc. but haven’t seen much adoption on those fronts until the pandemic caught us off-guard.  

Despite being a hotbed of startup investments, startups in HealthTech have not been able to replicate the success of any of the Indian e-commerce, fintech, and enterprise tech startups yet. But the huge behavioral change propelled by the new normal has brought an unprecedented  opportunity for them to transform the sector. 

HealthTech, which accounts for only 1% of the sector is a fast-growing industry vertical within the healthcare sector. It was around $1.9 billion in 2020, growing at 39% CAGR and expected to reach around $5 billion by 2023, says a report by Praxis and IAMAI.  

Image & Data Source: Praxis

e-pharmacy, B2B HealthTech rule the roost 

Majority of the Indian HealthTech ecosystem comprises technology-enabled healthcare products and services that are delivered and/or consumed by the patients inside and outside of the hospital or physician’s office like e-pharmacy, e-diagnostics, teleconsultation, B2B HealthTech, B2B medical supplies, and other healthcare solutions like personal health management, online home healthcare, etc.

But India’s HealthTech growth story is largely restricted to only a few segments such as e-pharmacy and B2B HealthTech. These two segments happen to be the two largest segments accounting for almost 70% of the overall HealthTech market. However, e-diagnostics and teleconsultation are the fastest-growing subsegments in HealthTech- growing at 66% and 73% respectively, said the Praxis and IAMAI report.

In fact, e-pharmacies saw a 200% increase in the number of orders in 2020, the adoption in households also increased by more than 2X post-COVID. Teleconsultation platforms, on the other hand saw a 300% increase in the number of consultations in 2020.

Image & Data Source: Annual reports, Invest India, IBEF, Praxis analysis 

Much-needed innovations to change Healthcare in India 

The year 2020 was a watershed moment for the HealthTech sector, as healthcare investment across the board reached record levels, mainly propelled by the way Covid-19 pandemic exposed the gaps in the healthcare systems across the world. Investors worldwide poured a record of $15.3 billion into HealthTech startups in 2020, up from $10.6 billion in 2019, according to Silicon Valley Bank’s report. Although India didn’t see any healthcare mega round deals in the $100 million+ bracket in the second half of 2020, it saw a widespread adoption of teleconsultations and e-pharmacies amongst the consumers throughout the year.   

However the promises of HealthTech are huge especially when it comes to dealing head on with the three main bottlenecks of Indian healthcare system i.e. Accessibility, Affordability, Availability, and Awareness which can be overcome with integration of technology in the healthcare ecosystem and fostering innovations across the healthcare value-chain. 

India needs innovations that can touch 1.3 billion people, most of whom are unable to bear the costs of hospitalization and the rising healthcare expenditures. Existing healthcare infrastructure in India is also inadequate with the availability of doctors at only 0.8 per capita, the availability of hospital beds at only 1.1 per capita and also from the affordability perspective. Around 75 percent of India’s entire population are still not covered by any form of life insurance even. 

Going forward, focusing on the affordable HeathTech innovations will be critical to drive down the costs of care and also to make a shift towards value-based healthcare. Instead of keeping HealthTech innovations restricted to products only, a complete business model transformation across the value chain comprising manufacturing and distribution is likely to bring significant benefits to the healthcare ecosystem partners including patients.  

Key HealthTech growth drivers

The year 2020 also saw a few government initiatives to transform the healthcare sector such as delivery of medicines through e-commerce as an essential service, announcement of Telemedicine Practice Guidelines, and most importantly the introduction of National Digital Health Mission (NDHM) to bridge the existing gap amongst different stakeholders of healthcare ecosystem through various digital and HealthTech solutions. NDHM will be rolled out in phases and four primary systems shall be launched in the first phase- Health ID, Digi Doctor, Health Facility Registry (HFR), NDHM Health Records, and Electronic Medical Records (EMR).  

Physicians, diagnosticians, pharmacies, and hospitals in India are also embracing technologies such as Cloud, Analytics, AI, ML, Robotics, IoT, Automation, Blockchain, AR/VR, 3D Bioprinting, etc. to improve access and quality of their services delivery. 

But the next wave of growth in the HealthTech space are most likely to be fueled by the innovative HealthTech companies in the personal health and preventive healthcare domain such as fitness and wellness, diagnostics, therapeutics, health monitoring, food and supplements, and health insurance, etc. 

With an increasing mobile internet penetration and the availability of easy-to-use and convenient digital healthcare solutions, personal health devices, etc., new consumer segments like internet-savvy millennials, fitness enthusiasts, ageing population with rising proportion of lifestyle diseases, mothers are getting more conscious about healthcare and will continue to push for more innovation in the HealthTech space.  

Sumit Goel, Managing Partner and Practice Leader – Healthcare, Pharma and Life Sciences at Praxis Global Alliance said, “A lot of youngsters today are very comfortable using digital technologies and hence have been increasingly adopting connected health devices to monitor their oxygen levels, heartbeat, sleeping patterns, and even to measure distress levels. Naturally, the consumer/personal health space has picked up a lot of affordable innovations of late, both on the health monitoring as well as health management side.”

Telemedicine’s role will also be critical in terms of extending the remote diagnosis to remote and rural areas as well as smaller towns. 

Preventive healthcare is another area that holds a lot of promise, but there's a gap that needs to be addressed, said Shankar Viswanathan, Partner and  India AI Lead at ZS. “A lot of the current AI algorithms and techniques are very good at predicting whether someone is likely to fall sick or whether he/she is likely to become diabetic, or is at the increased risk of any medical conditions. You can use the power of AI effectively to make predictions at scale, but what do you do with those predictions and how do you take the right preventive actions? While the first part of the problem can be solved with the help of technology but the second part of it still lies in the realm of human judgment,” explained he.  

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