The digital health industry has a projected revenue of US$193.70bn by 2024, with an annual growth rate of 9.16%. In the last couple of years, digital transformation in healthcare has been gaining traction as countries like Germany have also started adopting the “digital” way of providing care - by 2024, the German digital health market is projected to have revenue of be US$5.77bn.
MVP Factory has been particularly active in the health sector with projects like Nanell, Stitch, Third Nature, and others- in this article, we dive deep into the necessity of digitization in healthcare and answer questions like:
- What are the benefits of digital transformation in health?
- How is the current health ecosystem in Germany?
- What are the top four success factors when developing a digital health solution?
What are the benefits of digital transformation in health?
Today, VC capital is increasingly allocated to all health verticals with healthtech investments exceeding USD 16B just in 2020. This growth can be successfully attributed to the increased adoption of technical solutions - an inevitable result of the pandemic.
The rising demand for digital health solutions comes with a wide range of benefits - with the world becoming more interconnected, the digital transformation of healthcare is a necessity in improving patient care, streamlining operations, and reducing costs.
Furthermore, the digitization of health records and the adoption of Electronic Health Records (EHRs) have simplified data management, resulting in faster and more accurate diagnoses. According to a study, AI technology has revolutionized the review and interpretation of mammograms making the process 30 times faster and achieving 99% accuracy.
Digital transformation also promotes collaboration and communication among healthcare professionals. Telehealth platforms enable secure information sharing and consultations, fostering interdisciplinary cooperation and knowledge sharing, which is particularly critical in complex medical cases.
Overall, digital transformation in healthcare is driving accessibility, efficiency, and patient-centric care. It empowers patients to take control of their health, while healthcare providers can make more informed decisions and deliver personalized treatments. With the continuous evolution of digital technologies, the healthcare industry is poised for further advancements that will benefit patients and healthcare professionals alike.
How is the current health ecosystem in Germany?
Germany is often perceived to be conservatively resistant when it comes to technological adoption, especially due to its reliance on old models of operation. However, in the last 20s, it managed to emerge as a trailblazer in the global digital health sector with the launch of DiGA.
The passage of the Digital Health Care Act (DiGA) in 2019 laid the foundation for a digital healthcare revolution. Under this act, doctors can now prescribe and the German health system can reimburse digital health applications that meet specific criteria.
“DiGA does a great job in ensuring that the patients can benefit as quickly as possible from innovative approaches to care - it not only creates a digital network for the health sector but also allows easy access.” - Dr. iur. Julian Braun, Ada Health.
One thing noteworthy when exploring the German health tech landscape is that while regulations like DiGA have accelerated the investment in the industry, with increasing digital health products being launched, there still lies a complicated barrier to entry.
The first DiGAs were authorized for use in October 2020 and 24 were approved by November 2021 out of the 101 that were handed in. This low approval rate can be attributed to the requirements and challenges unique to the specific healthcare sector. An in-depth market research of the ecosystem is, therefore, indispensable before embarking on the product discovery phase.
From our experience, we have managed to identify four catalysts to enable efficient innovation processes for building health products and ventures.
What are the top four success factors when developing a digital health solution?
a) Validate Hypotheses as Soon as Possible:
In the digital health industry, speed is often the difference between success and failure and rapid hypothesis validation can save time and resources.
Early testing, even with a minimal viable product (MVP), allows you to gather invaluable feedback from users and stakeholders. This is especially more significant in health products as more often than not, they are established on hypotheses and working assumptions.
“The key factor behind the success of Third Nature, a web application designed to help women dealing with PCOS, Perimenopause, and Menopause with medically verified content, was the early validation. We identified a need for women’s health to be supported understandably and collaboratively and managed to back it up with more than 1800 active users in the first three months.” - Ioanna Papakanderaki, Senior Product Manager, MVP Factory
Early validation of hypotheses not only provides you with a high level of assurance in the marketability of the product but kickstarts an iterative process that helps you fine-tune your product, address pain points, and enhance user experience.
The sooner you validate your hypotheses, the quicker you can pivot if needed.
b) Identify the Target Audience and Provide Value:
In the digital health market, you can recognize three main target groups:
- Patients who suffer from illness, care for their well-being or want to stay healthy.
- Employees working in the digital health sector are facing the challenges of being overworked. They need innovative solutions to work effectively, manage their workload, and have more time to care for their patients.
- Companies in the health sector who want to work more efficiently, adapt to the ever-changing market, and take creative and innovative routes to reevaluate or extend their business models.
Empathizing with your target audience and discovering their daily challenges should be the core focus points when entering the digital health space for product discovery.
“For Nanell, we launched the beta phase with the sole purpose of iterating and gathering improvements and feedback - we conducted usability testing, including user interviews and surveys to gain a comprehensive understanding of their pain points. This helped us establish the user flow and craft a user-centered solution.” - Laura Segerström, Product Manager, MVP Factory
c) Understand Regulations and the Ecosystem:
Emphasizing the need to understand the regulations also entails incorporating them through the building process and adapting accordingly.
Healthcare regulations can vary significantly from one region to another - it's vital to not only understand these regulations but also to anticipate their potential changes. Staying compliant with the legal framework is essential to avoid costly setbacks and legal issues. Moreover, comprehending the broader healthcare ecosystem, including the roles of insurers, hospitals, and government agencies, can help you navigate the complexities of the industry.
“When we were building Stitch, we had to adhere to the healthcare regulations and the laws of operating in a foreign territory. To ensure that the platform remained FDA-compliant and data secure, we collaborated with a local partner who provided a “one-stop shop” solution for all things legal. With this partner, we managed to master the legislative landscape and operate remotely.” - Patrick Borbe, Head of Marketing, MVP Factory
d) Pivot When Necessary:
Flexibility and adaptability are cornerstones of success in the digital health industry. Even with meticulous planning, unforeseen challenges can arise.
Be prepared to pivot your strategy or product direction when market conditions change or new data emerges. Regularly monitor market trends, competitor activities, and emerging technologies. Staying nimble allows you to seize opportunities and mitigate risks effectively.
“When we started Pflegeclever with MVPF in 2022, our priorities differed. Once we realized what’s important for customer growth, we pivoted - this was a major success factor for our product.” - Christoph Heidemann, Product Manager, Relias
What next?
In the last few years, we have seen the digital health market experience unprecedented growth, offering vast potential.
However, success in this space requires a deep understanding of regulations, market dynamics, and user needs. Collaboration with experts, market research, and a relentless focus on user-centric solutions will be key to navigating the challenges and seizing the opportunities presented by the evolving digital health landscape.
If you’re interested in building the next big health product, reach out to us - let’s build together.
Download "Translating product goals into business goals"
This was just a preview, you can unlock the whole content here. Enjoy!
.png)
