Perhaps unsurprisingly, one of the major trends we’re seeing lately is the acceleration of digital health. Certainly, the pandemic has acted as a propellant. We’re seeing people more concerned about their overall health, whether it’s focusing more on their physical fitness or spending time on their mental wellbeing.
Then there’s been the exponential rise in the likes of telemedicine as health services have strived to maintain service provision while keeping patients and healthcare professionals as safe as possible.
But really, what COVID-19 has done is show that, particularly when considering tele or remote delivery of healthcare, these digital services can work. Like with so many trends (such as remote working), it has accelerated acceptance and growth of something that was already in existence.
Where this year’s growth is going to come from will be to build on the work that has taken place last year. But it won’t be about a direct response to the pandemic. Or at least that won’t be the main focus. It will be about taking the learnings of 2020 and applying them more broadly to the delivery of medical treatment and guidance.
It will be a maturation of the market, driven increasingly by user acceptance. For instance, in Germany, the Digital Healthcare Act (DVG) officially granted doctors permission to prescribe apps to their patients for the first time, with two covered – one for tinnitus, and one for anxiety.
Currently consumer use of paid medical apps is very low, but appetite remains high – while just 6% use them, more than 60% would do so if the costs were covered. The German ruling means insurers will cover the cost of the apps.
This points to the immense potential market for paid medical apps, something that we’ve been seeing in the mental health space with the rise of Calm and Headspace. While the former was recently valued at $2.2 billion, the latter is reportedly seeking approval from the FDA, investing heavily in clinical trials which would lead it to being covered by health insurance in the US.
It’s a similar story with dacadoo, a Zurich-based business we’ve recently invested in around our thesis on superior digital health technology. It develops technology solutions for digital health engagement and health risk quantification. Its platform motivates users to achieve and maintain healthy lifestyle habits, combining behaviour science, gamification and artificial intelligence-based coaching to activate and engage people. It also offers Health Risk Quantification, which draws on more 300 million person-years of clinical data to make health measurable and quantifiable on an individual basis.
What is interesting about dacadoo is that its solutions work for both individuals, to help them manage their health, and insurers, ensuring both parties have access to accurate data which can inform more representative outcomes.
Over the past few years, dacadoo has raised more than 70 million Swiss francs, and growth is accelerating as a host of insurers and healthcare providers are signing up to white label its platforms and inject greater levels of digitalisation into their own operations. Most recently, the company launched its next-generation platform – Wheel of Life – to meet the demand for insurers to accelerate their digitalisation and align their offerings more closely with health and wellbeing services.
Research has shown that lifestyle choices alone can affect an individual’s overall health outcome by over 40%, so the importance of maintaining a healthy lifestyle is paramount – and so much of that comes down to having the information available to make the right choices. We invested in dacadoo because we saw the immense potential it has in supporting users to enjoy better health, equipped with accurate data about their lifestyle choices.
While no one has a crystal ball to tell us what 2021 might bring, with lots of uncertainty around what a recovery from the Covid-19 pandemic looks like, we’re certain digital health is going to be one sector that continues to grow fast. There is an ongoing need for remote forms of care and treatment, as it is unlikely we will see all patients flock back to full face-to-face treatment when it is safe to do so. For the likes of dacadoo and other digital health services, that means a significant opportunity for growth as they deliver services users are looking for.
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