Important insights into the global and Brazilian health tech markets
An increasingly aging society, rising health care costs and changing consumer expectations. These are only some of the reasons why healthcare technology companies have gained significant market share over the past years.
Digital healthcare solutions from so-called health tech (sometimes referred to as healthtech or HealthTech) startups promise to accelerate innovation cycles. Naturally, the market is witnessing an increase in venture capital investments to a great extent.
This trend also shows impact on the Brazilian ecosystem. Brazil is already considered the largest healthcare market in Latin America. And the seventh largest healthcare market in the world. According to the Brazilian association of startups, the Brazilian population spends more than $ 42 billion annually on private healthcare. That is why the country’s health tech market has already heated up accordingly. But it is still in need of technology-based solutions.
Other promising news: By the end of 2020, the digital health industry is likely to have registered a further year of vast growth due to COVID-19. According to a press release by Global Market Insights, “various market players are launching novel services and product portfolio to cater to the growing demands of the people. Strict regulations imposed by the government to minimize the infection spread will propel the industry growth.” This stems from the fact that these regulations are indirectly forcing the adaptation of healthcare technology.
What is a health tech?
Companies and startups in the sector use technology to respond to urging healthcare demands. They aim to launch leading-edge solutions to improve the delivery or consumption of care, for instance. Others develop innovative diagnostic tools or patient data management systems.
As there are many different possible uses for technology in healthcare, health techs can be found in various areas. In market studies, a segmentation into different categories can usually be seen. Here are some examples: clinical administration, telemedicine, patient engagement, doctor search, digital devices, fitness apps, or insurance and payments.
These companies are gaining more and more importance and market value. Following Global Market Insights, the digital health market size will grow at 28.5% CAGR (Compound Annual Growth Rate) through 2026. Thereby, the global market value is expected to exceed USD 639.4 billion. In 2019 its size was estimated at over USD 106 billion.
Of course, the coronavirus pandemic is accelerating this development. As market data shows, the venture capital investments for digital health startups in the first quarter of 2020 exceeded the amount of Q1 2019 about 1.5 times.
What you need to know about the Brazilian health tech environment
The innovation platform distrito and some other partners published a comprehensive report (“Distrito HealthTech Report”) for the Brazilian health tech market in the second half of 2019. According to the data, the Brazilian population already reached 210 million people, who will all, sooner or later, need medical assistance.
The researchers were able to map a total of 386 health tech startups in the country. Most of them located in the southeastern part, mainly in São Paulo. Almost one quarter of these companies focuses on clinical management solutions. Other strong categories are marketplace, information access, pharmaceutics and diagnostics.
Furthermore, 94% of the registered startups employ 50 or less people, only 2.5% operate with more than 100 employees. As the report shows, 82.7% of companies have been successful. The small fraction of unsuccessful companies fails after around 4.3 years.
Important healthcare technology trends
And what are the most important healthcare trends for the next years? As reports highlight, the experts are expecting an increase in remote patient monitoring, health and fitness apps, as well as in the service segment. In October 2019, for instance, the US telemedicine company amwell partnered with a large hospital to form the joint venture “The Clinic”. Their focus lies on comprehensive digital health services through virtual visits.
As required during the COVID-19 crisis, the guiding idea is to offer remote monitoring to a large number of patients who show only minimal symptoms. This would imply a benefit especially for hospitals, as remote monitoring can lower the burden on healthcare systems efficiently.
Accordingly, Brazil and other countries are expected to witness a steady growth of health tech companies in this segment in the following years. Including the likes of Viveo Health, an Estonian health tech: This startup developed a telemedicine platform that allows doctors and people to communicate remotely, wherever they are. Due to the global coronavirus pandemic, Viveo Health has opened its platform “Virtual Office for Doctors” to medical professionals all around the world.
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