ANDHealth releases report on Australia’s digital health opportunity

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A new report from ANDHealth has found Australia’s emerging digital health industry has the potential to take advantage of growing global demand but that the COVID-19 pandemic has 'disrupted' the opportunity.

ANDHealth is focussed on developing and providing programs to address the commercialisation challenges faced by digital health companies.

It was created in 2017 by a consortium of partners led by the Murdoch Children’s Research Institute. Its members also comprise Novartis, RMIT University, Planet Innovation, Curve Tomorrow, Allens, Potential(x), HealthXL, AusBiotech and HPM Executive.

The new report - Digital Health: The sleeping giant of Australia’s health technology industry - is based on responses from 317 companies. This makes it the largest ever analysis of Australia’s digital health industry.

It says the value of the global digital health market will rise five-fold over the years to 2025 - from US$86.4 billion in 2018 to US$505.4 billion - and that Australia is positioned to take advantage of that growth.

It says the current COVID-19 pandemic has provided a "catalyst for the industry" but that it has also exacerbated a number of existing commercialisation challenges – access to customers (71 per cent), the ability to raise capital (62 per cent) and secure government funding (44 per cent).

“Australia’s decades-long policy of supporting innovation, our significant investment into digital health capabilities and infrastructure, and now our highly successful management of the COVID-19 pandemic has given us an unprecedented opportunity to build a world-leading digital health industry," said Bronwyn Le Grice, CEO and founder of ANDHealth.

“ANDHealth’s data shows that our local sector has a pipeline of world-class innovation and technology. However, digital health companies face some unique challenges as they move along the path towards commercialisation, not least of which is that as a sector it struggles for recognition and appropriately focused funding structures here at home.

"To fully realise the potential of this nascent sector, we need to provide support. This sleeping giant, if awakened, will achieve the triple aim of economic growth through high-value STEM-based job creation, increased advanced manufacturing and clinical trials activity, and sovereign health system capability and resilience.”

ANDHealth says 'digital health' can be misunderstood as 'health IT'. It uses the broader definition used by US FDA that includes mobile health, wearable devices, telehealth and telemedicine, as well as personalised medicine. 

The ANDHealth report is based on an analysis of 317 Australian companies, with 37 per cent developing technologies aimed for home use such as remote patient monitoring, 25 per cent focused on diabetes and other chronic diseases, 17 per cent on mental health, 13 per cent on clinical decision support and 10 per cent on diagnosis and screening.

“While only nine percent are focused on telehealth and telemedicine, ANDHealth believes this reflects the limited reimbursement for these types of businesses prior to the COVID-19 pandemic," said Ms Le Grice.

"Assuming ongoing reimbursement frameworks for telehealth, we would expect to see significant growth in the numbers and maturity of companies across this segment.

"Beyond telehealth, the regulation of software as a medical device provides an opportunity for reimbursement for remote patient management platforms, which can further support patients to access high value care in their home. This will create market pull for a significant number of local companies.”

ANDHealth says the vast majority of companies are looking at processes and behaviours at the clinical and patient level.

"A third (33%) are deploying technologies in self-management of disease, patient behaviour change and medication management. Another quarter (26%) are seeking to address challenges in workflow (both clinical and non-clinical)," it says.

The report says the COVID-19 pandemic has disrupted what was a 'maturing industry'.

"Most companies were in the early development stage and completing detailed feasibility studies as they moved towards proof-of-concept. A healthy number had progressed to evidence-building in the lead-up to market launch," it says, adding a large portion had identified the lack of access to some key skills and expertise needed for commercialisation. 

ANDHealth says it surveyed its database of companies again in May 2020, in the midst of the pandemic, to understand the impact.

"Like most, the pandemic has forced digital health companies into making some big shifts," it says

"On the positive side, 30% had pivoted to new business opportunities, a quarter (24%) had hired staff, and 21% had accelerated their expansion plans. However, there has also been significant downside with a quarter (24%) forced to pause clinical trials and a further 15% pausing commercial trials. A quarter (24%) also stated they had laid off staff," says the organisation.

"One of the ironies for the digital health sector is that, although the pandemic has caused disruption and in some cases damage to companies, it has also provided unprecedented opportunity.

"When asked what the potential positive impacts of COVID-19 would be on the digital health sector, respondents named increased acceptance by the medical community (74%), increased acceptance by patients (50%), more reimbursement for digital health technologies (24%) and a larger market for digital health technologies (24%). The areas identified for most potential growth post-COVID were telehealth (85%), remote monitoring (68%), data analytics (35%) and digital mental health (29%)."