Frost & Sullivan Unveils Top 8 Healthcare Predictions for 2019: Key Areas to Watch

Recently, Forbes released a report titled “Eight Major Healthcare Predictions for 2019.” VCBeat (WeChat Official Account: vcbeat) has compiled the main content of this report for you.

Globally, 2019 will mark a pivotal year for value-based healthcare, as the focus on “outcomes-based care” becomes increasingly globalized. This shift will foster more mature risk-sharing arrangements among healthcare providers, pharmaceutical R&D institutions, and original equipment manufacturers (OEMs), thereby delivering commercial value to providers. Furthermore, access to affordable, high-quality care will emerge as a key political agenda item in the upcoming 2019 elections across emerging markets such as Asia, Africa, and Central and Eastern Europe.

As the boundaries between the retail, IT, and healthcare industries become increasingly blurred, Google, Apple, Facebook, and Amazon (GAFA), along with Baidu, Alibaba Health, and Tencent (BAT), will begin to dominate the personal care market in the East during 2019. Non-traditional digital market providers, such as Alibaba Health, Tencent, Amazon, Google, Apple, Microsoft, and IBM, will lead the home health sector, providing the necessary impetus for public health systems to ensure the accessibility and affordability of care. We also anticipate that future investments in pharmaceutical and medical device R&D will be more targeted toward meeting the unique needs of emerging Asian markets. Finally, we predict that 2019 will serve as a reality check for the two most popular healthcare technologies of the decade: artificial intelligence (AI) and blockchain.

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Eight Major Predictions for the Global Healthcare Industry in 2019:

In 2019, the healthcare industry will continue its shift toward a value-based model. We anticipate that by the end of 2019, up to 15% of global healthcare expenditure will be linked in some form to the concept of value- or outcome-based care. This transition will be driven by greater urgency in countries where nearly 10% or more of GDP is currently allocated to healthcare spending, such as the United States, the Netherlands, Sweden, France, Germany, Canada, and Japan.

In 2019, the VBC initiative will continue to transition from economic models or cost-effectiveness measures toward a greater focus on health outcomes and treatment efficacy, leveraging data-driven risk-sharing frameworks and sustainable reimbursement models to benefit both providers and payers.

We estimate that by the end of 2019, the value of artificial intelligence in the healthcare IT application market will exceed $1.7 billion. We further project that productivity will increase by 10–15% over the next two to three years through the deployment of AI platforms in selected healthcare workflows. However, pricing remains a critical factor for AI solutions, as users are often reluctant to allocate additional budget for such IT capabilities. Adopting cost-effective approaches and clearly demonstrating the potential return on investment for both parties is an effective strategy to sustain market growth.

Throughout 2019, the development of artificial intelligence and machine learning will focus on human-machine interaction. More specifically, AI will begin to yield tangible results and returns, particularly in applications such as imaging diagnostics, drug discovery, and risk analysis.

In 2019, the application of digital health will continue to extend far beyond traditional healthcare systems, empowering individuals to manage their own health. According to our estimates, by the end of 2019, digital health technologies tailored to hospital settings will grow by 30%, surpassing a global market value of $25 billion. The rising cost burden of chronic diseases and population aging will become the primary drivers for digital health solutions, such as Remote Patient Monitoring (RPM) devices, telemedicine platforms, Personal Emergency Response Systems (PERS), and mHealth applications.

Furthermore, favorable reimbursement policies for clinically relevant digital health applications will continue to expand healthcare service models beyond physical medicine, encompassing behavioral health, digital therapeutics, dentistry, nutrition, and prescription management.

Historically, most channels for medical innovation have flowed from the West to the East. Now, as emerging markets capture 20–30% of the pharmaceutical industry’s value with double-digit growth rates (10–15%), a range of global original equipment manufacturers (OEMs) of drugs and devices are seeking to reverse this trend by introducing new products tailored to Asian healthcare institutions and populations. We anticipate that by 2019, up to 10% of healthcare R&D will be directed toward innovations in Asian emerging markets. For instance, in terms of growth, the Asia-Pacific region represents the strongest market, where more than 30% of global late-stage cell therapy trials will be conducted.

Furthermore, we believe that the Asia-Pacific region will witness a genomics revolution in the coming years. China, in particular, will play a leading role in the field of genomics in Asia. This evolving pattern of product development and geographic expansion leads us to believe that the number of “unicorn startups” (valued at over $1 billion) and foreign direct investment will increase alongside rising demand for healthcare services, population aging, and income growth.

As the healthcare industry becomes more familiar with data management workflows, we anticipate that a significant number of specialized analytical solutions will come to prominence among these vendors: those focused on investigating drug utilization, treatment variability, enhancing clinical trial eligibility, reducing billing discrepancies, and supporting self-care programs for major chronic diseases. We predict that by the end of 2019, 50% of healthcare companies will have dedicated repositories for accessing, sharing, and analyzing real-world data for organizational use.

Looking ahead, the primary objectives for healthcare payers and providers in leveraging analytics capabilities will include: population health management (identifying at-risk individuals), identifying optimal care pathways (lowest cost, best outcomes), and automating operations for patients, payers, physicians, and procedures. Furthermore, the integration of artificial intelligence with analytics capabilities will continue to drive analytics into mainstream adoption over the next two to three years.

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Healthcare is at a tipping point, with specialized voice technology providers such as Nuance and Orbita, along with leading tech companies (including Amazon, Apple, Google, and Microsoft), adopting voice technologies tailored to healthcare industry use cases. We anticipate that HIPAA-compliant healthcare voice and chatbot applications will gain prominence before 2019, driven by the active participation of these tech giants in the competition for voice solutions.

However, the current state of speech technology limits its applicability to narrow use cases, such as rapid retrieval of medical information and voice-guided transcription interactions, making it unsuitable for conveying lengthy messages. In the future, applying speech technology to vetted clinical use cases—such as elderly care, chronic disease management, and physician assistant support—will create growth opportunities.

During 2019, blockchain technology will shift from the perception and hype phase to early commercial deployment, demonstrating initial return on investment (ROI) in enterprise B2B-focused initiatives. We anticipate that by the end of 2019, 5%–10% of healthcare-focused enterprise blockchain applications will transition from pilot stages to partial or limited commercial availability.

Furthermore, the selective attrition of healthcare ICOs (Initial Coin Offerings) and the proof-of-concept stage for startups will ultimately yield few commercial use cases by the end of 2019. This will attract early adopters who have been waiting for the right opportunity to create much-needed network effects in the healthcare sector and explore how blockchain technology can be applied within it.

Undoubtedly, today’s health insurance policies have become outdated and fail to meet individuals’ personalized needs. Consequently, we project that the growth rate of the health insurance industry in 2018 will be below 1.5%. To ensure future growth in global insurance profits, many insurers have begun providing data- and digital-driven healthcare services to their policyholders, thereby reducing potential claims costs.

We believe that by the end of 2019, 5–10% of health insurance plans will be linked in some form to interactive policies driven by lifestyle and health data. Research by Frost & Sullivan indicates that interactive policies will continue to gain popularity globally, as they enable insurers to leverage individual data for personalized premiums, discounts, and rewards.

In short, 2019 was undoubtedly an exciting year for the healthcare industry.

This article was written by Kamaljit Behera, an innovation industry analyst.