Germany is on the rise in digital health, which is why the market size is expected to reach 57 billion euros by 20251. Factors such as new regulations, the presence of successful accelerators, investors, and associations make Germany an attractive ecosystem for digital health startups.
As regulations in particular are a critical factor for digital health startups, Germany has already achieved a major step in this area. Since the introduction of the E-Health Act for better patient care through digitalization of the healthcare system in 2015, more and more laws have been passed to strengthen digitalization in healthcare with influence on the digital health market. In particular, the introduction of the Digital Health Act in 2019, with the prescription of digital health applications (DiGAs)
. Since the introduction of DiGA in Germany, eleven digital health companies focusing on therapeutic areas such as mental health, orthopedics, and cardiovascular disease have been included in the associated DiGA directory on a provisional or permanent basis.
Digital Health Cloud Platform
In addition, further laws introduced in 2020, such as the Patient Data Protection Act and the Hospital Future Act, which focus on the digitization of hospital infrastructure, support the digitization of the entire healthcare industry and enable new opportunities for digital health companies in Germany.
But there are also European initiatives that support the spread of digital health with a positive impact on Germany. European programs such as EU4Health, Horizon Europe and Digital Europe support investments in the field of a digitalized healthcare system in Europe.
In addition, initiatives such as the European Health Data Space focus on an efficient exchange of health data in the EU, not only for health care itself, but also for health research on the way to a networked European Health Union.
Digital Insurance Ecosystem Of Healthcare Companies
Factors for a digital health ecosystem. In Germany, there are so far about 26 accelerators, incubators and innovation hubs supporting digital health companies.
Most of them are located in Berlin, which is not only a hotspot for accelerators, but also for digital health startups and venture capitalists investing in the digital health space. In 2020, 62 digital health startups were located in Berlin, of which about 83% were founded after 2013.
Based on internal researches, there are about 79 venture capitalists in Germany that had an investment in digital health, showing a founder-friendly landscape for digital health startups.
Integrated Health Care Service Ecosystem
In general, Germany is driving positive changes for a conducive ecosystem for digital health startups. Further regulations planned for 2021, such as the Act for the Digital Modernisation of Care and Nursing, with the expansion of digital health not only in the form of DiGA, but also with the introduction of digital care applications (DiPA's) for people in need of care with the outlook for prescription, will support Germany's overall digitalization strategy.Author’s Note: This paper was originally completed for publishing in early 2020 prior to the major outbreak of the COVID-19 pandemic in the United States. We believe that the COVID-19 pandemic, and economic downturn, has only accelerated the evolution of healthcare ecosystems. As we move forward, organizations can consider ways to use healthcare ecosystems to improve patient experience and health, while reducing total costs.
Ecosystems create powerful forces that can reshape and disrupt industries.1 “How the best companies create value from their ecosystems, ” November 21, 2019, . In healthcare, they have the potential to deliver a personalized and integrated experience to consumers, enhance provider productivity, engage formal and informal caregivers, and improve outcomes and affordability.2 Singhal S and Carlton S, “The era of exponential improvement in healthcare?, ” May 14, 2019, . We define an ecosystem as a set of capabilities and services that integrate value chain participants (customers, suppliers, and platform and service providers) through a common commercial model and virtual data backbone (enabled by seamless data capture, management, and exchange) to create improved and efficient consumer and stakeholder experiences, and to solve significant pain points or inefficiencies.
Healthcare has shifted away from its post-World War II focus on contagious disease and workplace accidents, which necessitated episodic interventions.3 Singhal S and Jacobi N, “Why understanding medical risk is key to US health reform, ” May 1, 2017, . Today, the primary goal is preventing and effectively managing chronic conditions. However, as we have shown, productivity in healthcare is lagging other services industries as these goals shift.4 Sahni N, Kumar P, Levine E, and Singhal S, “The productivity imperative for healthcare delivery in the United States, ” February 27, 2019, . New technologies promise care that is available nearby or at home, supports continuous self and autonomous care, and reduces friction costs between supporting stakeholders. These shifts create an imperative for stakeholders to move toward an ecosystem-based model of care enabled by five key industry forces driving technological innovation:
Going Inside The Health Care Ecosystem
Mature ecosystems exist across industries, with both technological disruptors and incumbents deriving value from these ecosystems. One example is Disney. Its robust ecosystem allows each component to positively reinforce the other. Disney launched its first movie in 1937, its first television series in 1954, and, by 2019, the streaming service Disney+. Its theme parks, such as Disney World, reinforce the brands of characters, allowing children and families to have engaging in-person experiences. Those children also ask for Disney toys, Disney apparel, and Disney games, creating a self-reinforcing experience within the ecosystem enabled by the control of a scarce resource—content—and the underlying data and analytics to best deliver it.7 Disney has four interlinked business units: Media Networks; Parks, Experiences and Products; Studio Entertainment; and Direct-to-Consumer and International. Safo N, “How the Disney ‘ecosystem’ works, ” Marketplace Morning Report, May 21, 2015, marketplace.org.
The healthcare ecosystems of the future, like other ecosystems, will be centered on the consumer, in this case the patient. The capabilities and services that form the healthcare ecosystems of the future (illustrated in Exhibit 1) will include, but are not limited to:
Each of these capabilities and services contribute to the underlying data backbone and advanced analytics technologies. These capabilities maintain data integrity and enable insights from the ecosystem. These layers are further outlined in section 2.
The Healthcare Ecosystem
The healthcare ecosystems of the future will likely be defined by the needs of different patient populations and their associated effective care journeys (including beyond care itself). The consumer-oriented nature of these ecosystems also will increase the number of healthcare touchpoints, with the goal of modifying patient behavior and improving outcomes.
On one end of the spectrum, healthcare ecosystems will emerge to address the needs of healthy patients, who have less consistent medical challenges, but often set personal wellness goals. These patients will likely experience a more digital ecosystem, where patient data and insights are consumed in a highly personalized and meaningful way, such as with wearable devices. Only a small percentage of the touchpoints would be in modalities of traditional care.
At the other end of the spectrum, healthcare ecosystems will emerge to address the needs of patients who have multiple complex chronic conditions. For these patients, especially the Medicare and Medicaid dually eligible population, coordination between providers and services delivered virtually and in-person at or near the home becomes critical to the end-to-end experience. Technology components of these ecosystems will often be leveraged to enhance the in-person experience and support the care team. This team includes informal caregivers, such as the adult children of elderly patients who may play an increasingly important (and technology-enabled) role. Healthcare startups are already experimenting with this model in a targeted way.8 Examples include Iora Health, Livongo, Omada Health.
The Untapped Potential Of Ecosystems In Health Care
Although patient segments help organize how we think about care journeys and the ecosystems required to support them, the services provided along these journeys will be tailored to the specific needs of each patient. Below we imagine a tailored patient journey for John, a financially constrained patient with multiple chronic conditions, and the healthcare ecosystem that supports him.
Ecosystems are built on three layers: infrastructure, intelligence, and engagement. The infrastructure layer is foundational, composed of effective data capture, curation, management, storage, and interoperability to create a common data set upon which the ecosystem can operate. Built on top of the infrastructure layer is the intelligence layer, which converts data elements to consumable and actionable insights. Finally, bringing an ecosystem to life also requires a robust engagement layer, enabled by the infrastructure and intelligence layers, to effectively curate an end-to-end experience for suppliers who provide services and offerings to patients. Components of these layers can be built, bought, partnered, or vended by ecosystem curators and participants.
Data liquidity—the ability to access, ingest, and manipulate standardized data sets—is required for the infrastructure layer to serve as the foundation for all insights and decisions made in the ecosystem. This data liquidity enables the ecosystem to create value and removes silos by allowing stakeholders to operate off the same data sets with increased coordination.
Health Ecosystems: Striving Towards An Integrated And Seamless Patient Experience
Similar increases in data liquidity in other industries, specifically consumer banking, have altered competitive landscapes. The Society for Worldwide Interbank Financial Telecommunications (SWIFT) messaging system, created in 1973 to transmit financial data, was a game-changer in introducing industry-wide standards.9 White J, “What Is SWIFT and How Is It Used in 2019?, ” The Street, April 16, 2019, thestreet.com. The
