Germany Digital Health Market Analysis

Germany Digital Health Market Executive Summary

The Germany Digital Health market is projected to grow from $7.72 Bn in 2022 to $26.75 Bn by 2030, registering a CAGR of 16.8% during the forecast period of 2022 - 2030. Germany has one of the highest healthcare spendings as a percentage of Gross Domestic Product (GDP) among developed countries. Germany spent 12.8% of its GDP on healthcare in the year 2021 as compared to 11.7% in 2019. The government initiated the annual federal grant to the umbrella health fund and direct subsidies to fight the COVID – 19 pandemic.

To strengthen the healthcare system, the German government encourages the use of digital health technology such as electronic health records, telemedicine, and mobile health apps. Germany has a standardized EHR system called "elektronische Patientenakte" (ePA) that is being expanded across the country to improve patient coordination and continuity of treatment. The country also has a robust telemedicine infrastructure in place, with a variety of telemedicine services presently available.

In the digital health industry, Germany also has a significant start-up environment, with numerous creative businesses focusing on digital health solutions such as wearables, diagnostic tools, and patient interaction platforms.

Market Dynamics

Market Growth Drivers

Considering Germany as a leader in medical innovations amongst other developed countries, it has well-trained medical professionals and a well-developed network and framework required to grow in this sector.

The German government has long advocated for the use of Electronic Health Records (EHRs) to enhance the efficiency and quality of healthcare services. The government has issued regulations for the use of EHRs, which include measures for data protection and security; this will raise demand for EHR systems and will propel the digital health industry forward.

Having a higher spending capacity to meet the demands of digital health services, a robust start-up ecosystem, technological advancements, increase in aging populations have been adding to the factors driving the growth of Germany digital health market.

Market Restraints

While Germany has an advanced healthcare system, there are still gaps in digital infrastructure, especially in rural regions. This may limit the adoption of digital solutions in some parts of the country. Also, the expense of implementing and sustaining digital health solutions may be an obstacle to adoption for some healthcare professionals and patients. Other factors such as privacy and security concerns about medical data, resistance to change by the care providers and patients, and lack of regulation & interoperability can at times hinder the growth of the digital health market in Germany.

Competitive Landscape

Key Players

• Siemens Healthineers (DEU)
• Celesio AG (DEU)
• Allianz SE (DEU)
• AOK Bundesverband (DEU)
• Deutsche Telekom AG (DEU)

Notable Recent Deals

November 2021: Allianz completed the acquisition of Aviva’s operations in Poland and Lithuania. It involved Aviva’s life and non-life insurance operations as well as its pension and asset management businesses.

August 2020: Siemens Healthineers announced that it has successfully completed the acquisition of Varian Medical Systems, Inc to build a partnership called “EnVision” to create a fully digital, diagnostic, and therapeutic environment that incorporates patient management. & to accelerate the development and implementation of data-driven precision care, redefine cancer diagnosis, patient care, and post-treatment survivability. 

Healthcare Policies and Regulatory Landscape

In December 2021, the new federal administration made the digital transformation of Germany's healthcare system a priority and proposed the construction of a national e-health policy. Objectives of which included realigning the telematics infrastructure and advancing the countrywide rollout of electronic patient records and e-prescriptions.

Germany has implemented the General Data Protection Regulation (GDPR) to regulate the collection, use, and storage of personal information. The GDPR applies to digital health solutions as well, which are required to comply with the regulations on data protection. The regulations also address concerns about data privacy and security and are in line with the European Union (EU) regulations, which aim to create a single market for digital health solutions in the EU. Moreover, a centralized EHR system called the "elektronische Patientenakte" (ePA) is rolled out across the country. This system allows for better coordination and continuity of care for patients.

Reimbursement Scenario

The healthcare system in Germany is divided into two parts: Statutory Health Insurance (SHI) and Private Health Insurance (PHI). The SHI system, which is supported by payments from both employers and employees, covers the vast majority of the population. Individuals with greater earnings are more likely to use the PHI system, which is paid by premiums. Telemedicine services & medical devices are covered by SHI but at a lower rate compared to in-person consultations whereas other digital applications are yet to be covered.

Reimbursement for digital healthcare has also improved over time, with the inclusion of remote patient-monitoring reimbursement codes for heart failure and a reversal of telemedicine laws. Since around April 2022, reimbursement for teleconsultations was limited to 30% of total consults for a specific healthcare profession (earlier in the COVID-19 pandemic, physicians and psychotherapists could get reimbursed for an unlimited number of teleconsultations) The reimbursement scenario in Germany is likely to undergo changes owing to collaborative work of insurance companies and government.