US Digital Health Market Analysis

US Digital Health Market Executive Summary

US's Digital Health market is projected to grow from $88.6 Bn in 2022 to $302.7 Bn by 2030, registering a CAGR of 16.6% during the forecast period of 2022-30. In 2020, U.S. national health expenditure was seen to rise high up to 19.7% of its Gross Domestic Product (GDP) from 17.6% in 2019. According to the World Health Organization (WHO) Global Health Expenditure database, US healthcare expenditure per capita has risen to $10,921.01 as compared to $ 10,515.32 in 2018. Healthcare spending in the US has been growing at a faster rate than the overall economy for many years.

Digital healthcare entails the use of digital tools and communication platforms to offer healthcare services and information remotely. Video consultations with physicians, remote monitoring of patient's health status, and the use of mobile applications to track symptoms and manage chronic diseases are examples of this. They have been widely impactful in providing convenience and accessibility to patients and potentially lower healthcare costs. The US is found at the forefront of adopting healthcare innovations with a number of companies and organizations creating and integrating a wide range of digital health solutions.

Market Dynamics

Market Growth Drivers

US digital market is expected to be driven by the rising prevalence of chronic diseases and with advancing geriatric population. By extending access to treatment and allowing patients to get care remotely, digital healthcare can assist satisfy this need. Increasing healthcare costs has generated space for low-cost provisions driven by advancement in digital technologies, and an increase in access to electronic health data and various data analytics tools and thus have been the key to providing more personalized patient care.

Moreover COVID – 19 pandemic has led to more and more adoption of digital ways of treatment both for care providers as well as for patients. Furthermore, support from the US government through improvised policies and good funding for the adoption of digital health technologies will rise.

Market Restraints

Increasing adoption of digital technologies will lead to the requirement for more robust data security and privacy, the breach of which might lead to cybersecurity issues. Moreover, the lack of standardized protocol to manage a wide range of technology and its applications can also be a barrier to the efficient exchange of information and continuity of care. Lack of reimbursement policy to provide full coverage of insurance can also be a main factor with a major role to play in allowing patients and providers to adopt the new technology.

Competitive Landscape

Key Players

• Cerner Corporation (USA)
• Allscripts (USA)
• Apple Inc. (USA)
• Epic System (USA)
• McKesson Corporation (USA)
• AT&T
• AirStrip Technologies
• HIMS (USA)

Notable Recent Deals

October 2020: Teladoc completed its massive $18.5 billion acquisition of Livongo which provides diabetes monitoring and remote monitoring devices to create a leading consumer digital health platform.

October 2019: Cerner Corporation and Amazon Web Services have collaborated to develop "Project Apollo," a next-generation cloud-based health platform.

Healthcare Policies and Regulatory Landscape

The Centers for Medicare and Medicaid Services (CMS) has created telemedicine reimbursement standards that allow Medicare reimbursements for some telemedicine services given to patients in rural regions. Intending to run a high-quality healthcare system CMS offers access to coverage, better medical care, and improved health.

The Health Insurance Portability and Accountability Act (HIPAA) is a federal legislation that mandates healthcare providers and organizations to safeguard Personal Health Information (PHI)

The 21st Century Cures Act: This legislation is designed to speed up the development, review, and approval of drugs and devices, which will help to foster innovation in digital healthcare.

The Affordable Care Act (ACA) promotes the use of Electronic Health Records (EHRs) and other Health Information Technology (HIT), which boosts the development of digital health technologies.

Reimbursement Scenario

In the United States, the reimbursement landscape for digital healthcare can be complicated and differs depending on the type of service or technology.

In 2021, CMS has expanded the list of covered telehealth services for Medicare beneficiaries to include more than 130 additional services. CMS has also introduced new reimbursement models such as the Merit-Based Incentive Payment System (MIPS) and the Alternative Payment Models (APM), that rewards providers for using digital health technologies and achieving better outcomes.

Private insurance firms may have their own reimbursement criteria for digital healthcare services, which might differ significantly. Some private insurers may deny coverage for some digital healthcare services, or they may need pre-authorization before providing coverage. Some employer plans are self-insured and they may not follow the same reimbursement policies as public or commercial insurance plans.