Our healthcare system is at a crossroads. Many people are fed up with rising costs and long wait times. Companies are starting to understand their role in helping to change the healthcare industry (and the underlying business opportunity). As a medtech entrepreneur and co-founder of a red light therapy device company, I know the implications this shift has not only had on my business but also the healthcare industry as a whole.
America’s approach to health care is changing, and I predict 2020 will be another important year in which medtech and retail health companies will continue to adjust it. Here are some of the key trends to watch in the new year and where opportunities exist for anyone in the industry:
1. People are taking health into their own hands.
For those who are frustrated by growing healthcare costs and long wait times at the doctor’s office, it’s no wonder people are looking for alternative measures to support their health, which is a key underlying factor behind the wellness movement.
People are taking proactive steps to take charge of their health by focusing on lifestyle-based wellness strategies like meditation, workout classes, and wellness conferences. As I previously wrote about, some people are prioritizing a “wellness” lifestyle, taking health into their own hands and spending money on their wellbeing. The global “wellness economy” was valued at $4.2 trillion dollars in 2017, and there is no sign of this trend slowing down in 2020 -- Statista estimated that the U.S. market value of health and wellness would rise from $166.5 billion in 2015 to $179 billion in 2020.
2. Corporate America is just getting started in its quest to modernize healthcare.
When Haven was announced in 2018, it made headlines. It was created by Amazon, Berkshire Hathaway and JPMorgan and is placing a big bet that it can transform the industry -- seemingly by providing an entirely new healthcare ecosystem for their employees.
Apple, on the other hand, is focused on working with traditional medical institutions by providing a gadget modality to measure its impact through efforts like the “Apple Heart and Movement Study.” These have been relatively well-received, but many (if not most) are proceeding with cautious optimism; for example, Berkshire Hathaway billionaire Warren Buffett even said there’s “no guarantee of success” with Haven. Some companies have even been accused of violating the law, like Google for its “Project Nightingale.”
While there are risks involved, I am optimistic about what the future holds in this space and I believe big companies will continue to invest in healthcare initiatives. Corporate company ideas like Haven are taking much-needed new approaches for a singular goal: cut costs and take steps to change a flawed system. I believe tech companies will provide some of the most promising ways in which we’ll see real change.
3. Real innovation will come from retail health companies.
I believe the biggest commercial opportunity lies in the hands of retail health companies. Big tech companies like Amazon are often innovative, but a mid-sized to smaller company or startup has a unique and undeniably powerful upper hand: agility. There’s likely less red tape and more room to work quickly. Don’t just take my word for it; one report (via MarketWatch) estimated that the retail health clinic market would grow at a combined annual growth rate of 18.3% between 2019 and 2030. And FitBit is an example of a startup that helped change behaviors and that has now gone big. After growing from its small beginnings, it was acquired by Alphabet Inc.'s Google for $2.1 billion.
I believe retail, e-commerce and digital health solution companies are an important part of changing the healthcare system, in part because of their customer-centric models. Venture capitalists even recognize this opportunity; according to TechCrunch, digital health startups raised over $10 billion in two years. As with any business venture, the healthcare business can certainly be high-risk but also high-reward; as long as a company is working with the FDA and not against it, the potential commercial benefits can be significant.
So what do these trends mean for health-conscious entrepreneurs in 2020? Big companies will likely make an impact on the healthcare industry, but burgeoning business owners also have a big role to play. Startup and small business owners can capitalize on the trend of people taking health into their own hands and potentially change lives for the better. Here’s what I would tell any entrepreneur thinking about getting into the healthcare business this year:
• Find your niche. The broader healthcare market is massive, and it extends beyond traditional modalities to treat disease. Don't be afraid to start small and focus on a narrow niche in an effort to establish product-market fit.
• Understand your impact. Consumers are becoming increasingly proactive about their health. There's never been a better time to employ direct-to-consumer marketing strategies when you're commercializing your product, and you have a real opportunity to positively benefit people’s health.
• Take action. Even if you don't have a new health-focused offering or product, take advantage of these trends with your current or prospective employees. Provide innovative wellness benefits and you'll likely have more productive, happy, and healthy employees. And you'll stand out when you're trying to recruit new members to your team.
If you're an entrepreneur or medtech professional, I’d recommend following these trends in 2020 and beyond to find your niche to make a positive impact on our shifting healthcare landscape.
