Top 10 Healthcare Industry Trends for 2016 – Frost & Sullivan Predictions

As 2015 draws to a close, experts and thought leaders at Frost & Sullivan have made the following top ten predictions for trends in the healthcare sector in 2016:

1. Market sales of next-generation wearable devices will reach $6 billion
The sensing, data capture, and analytical capabilities of next-generation wearable devices will be enhanced, making them more suitable for clinical use. Currently, commercially available wearable medical devices (such as those developed by Vital Connect and Proteus Digital Health) primarily rely on monitoring technologies. With continuous technological advancements, devices that provide therapeutic support will continue to gain market traction, such as Quell, developed by Neurometrix.

A recent study by Frost & Sullivan on consumer behavior and digital health reveals that currently, approximately 24% of consumers use mobile apps to track personal health, 16% use wearable sensors, and around 29% access their personal electronic health records (EHRs). This trend is projected to continue in the near future, with the proportion of consumers using wearable devices expected to rise to 47%.

2. Retail healthcare will achieve mainstream status, with clinic coverage expanding to 35%
In 2015, a significant portion of investments in the retail healthcare sector was allocated to expanding clinic coverage, acquiring new medical tools, and establishing commercial partnerships with healthcare companies. Based on this trend, it is inferred that in 2016, retailers will aggressively implement their respective expansion strategies to fulfill their ambition of becoming at the forefront of primary care services.

3. The New Development Bank will ramp up its investment in the healthcare sector, which will reshape the development momentum of multiple countries
The New Development Bank (formerly known as the BRICS Bank), with an initial capital of $100 billion, stands as a formidable rival to other global banking institutions dominated by major shareholders from the United States and Europe. Committed to improving living standards in developing countries, the bank’s primary initiatives include providing funding to build medical infrastructure for populations with limited access to healthcare.

4. The rapid expansion of private health insurance in India will open up new markets
As of March 2014, health insurance coverage in India stood at only 17%. Consequently, the public faced high medical costs and a heavy financial burden, with out-of-pocket expenses accounting for more than 75% of total healthcare spending. The new Indian government adopted a strategy prioritizing healthcare development and implemented a national health insurance scheme. This initiative not only provides free medications and diagnostic services to the public but also helps individuals access affordable insurance.

5. Population Health Will Drive Over $50 Billion in M&A Activity Among Healthcare Companies
It is estimated that long-term strategies related to population health management will become the driving force behind corporate decisions such as restructuring, mergers and acquisitions, divestitures, and R&D investment.
The demands of population health tools are forcing companies to reconsider their acquisition strategies from a different perspective, which will lead to increased business volume among companies in adjacent or complementary markets.

6. Point-of-Care (POC) testing has become more timely and cost-effective, potentially giving rise to new diagnostic models
New point-of-care testing platforms have been endowed with novel capabilities, such as molecular POCT, connectivity features, biosensors, and microfluidic systems. If these new platforms are deployed in practical settings and commercialized, physicians’ turnaround time will be significantly improved (increasing from 5 minutes to 15 minutes), enabling testing services to be performed at the point of incidence—a feat previously unattainable.

7. In the United States, coverage of free preventive care services will exceed 90%.
To reduce the medical costs and burdens for patients with advanced chronic diseases, a range of technologies and benefits will be provided by payers, employers, and governments alike, facilitating greater public access to preventive care. Meanwhile, consumer engagement is bound to impact the preventive care services industry, a development we eagerly anticipate.

8. IoT Strategies in the Healthcare Industry Will Attract $10 Billion in Venture Capital for Startups
Numerous companies in the early stages of development plan to introduce their IoT expertise, honed in other industries, into the healthcare sector, a move that will revitalize the entrepreneurial environment within healthcare. These companies are focused on disruptive business models, aiming to phase out outdated methods of healthcare delivery and adopt approaches that fully leverage new technologies and tools.

9. The hospital will invest substantial funds in renovating and upgrading outdated equipment to reverse its declining trajectory.
The widespread trend of hospital closures and mergers has compelled them to rethink every aspect of their operations, from overall institutional layout to the rational utilization of resources. To align their development with new models of healthcare delivery that prioritize high efficiency and patient satisfaction, numerous hospitals across China are implementing renovation plans; for example, Parkland Hospital in Dallas has invested $1.3 billion in facility upgrades.

10. In 2016, the global regenerative medicine market will reach $30 billion in revenue.
It is projected that the regenerative medicine market will grow by 22.4% compared to 2015, emerging as a new strategic advantage for numerous pharmaceutical manufacturers. With expanding investment in this sector, the enactment of favorable legislative policies, and an increasing number of cell therapy products being launched onto the market, a wave of new competitors will emerge to vie for a foothold in this field.

Compiled by Lü Xiaoyi
Editor: Mo Renying