For the past few years, the largest tech companies—including Alphabet (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), and Microsoft (NASDAQ:MSFT)—have accelerated their advances into the digital health market. The reason for this is simple: as the baby boomer generation ages, health care costs have exploded.
It’s also common wisdom that the next industry ripe for disruption is health care. Artificial intelligence is expected to help diagnose a range of conditions, including strokes, heart disease, and skin cancer, while making predictions based on medical records. Robot-assisted surgery now allows doctors to enhance precision, flexibility, and control through mechanical arms and high-definition cameras, while lowering the risk of infection. Virtual reality and augmented reality devices such as the Microsoft Hololens have been used to train surgeons, and the list goes on.
The relative “veteran” of medtech is Alphabet’s healthcare spinoff Verily, which has been working on a broad spectrum of health-related hardware, including “smart” contact lenses to measure glucose levels in the body; a “smart” spoon that helps people with movement disorders eat; and “smart” shoes that can track weight, movement, and even falls.
Last year, Microsoft also launched a health care division to explore the application of artificial intelligence in medicine. This division, called Healthcare NExT, is planning to develop health care innovations by leveraging Microsoft’s capabilities in AI and cloud computing. Meanwhile, Apple (NASDAQ:AAPL) has also rolled out quite a few platforms for health care providers and is also working with Dexcom (NASDAQ:DXCM) to bring continuous glucose monitoring to the Apple Watch.
The latest entrant into the digital health market is the e-commerce behemoth Amazon. Although it’s not exactly clear what it’s planning in the health care space, Amazon recently entered into a health care alliance with JP Morgan Chase (NYSE:JPM) and Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) to form a non-profit health care entity. Its vaguely articulated goals include finding ways to lower health care costs and increase access to consumers, with a focus on technologies such as AI, mobile, and cloud computing.
It’s China tech majors, however, that enjoy a major head start when it comes to the digital health market, having worked closely with the government to revamp China’s antiquated health care system for quite a few years. The country is now making headway in developing low-cost health care technologies and access for a population in which medicine can be exorbitantly expensive for low-income residents, and access to health care staff is limited, particularly in the countryside.
This makes telemedicine quite popular. Last year, e-commerce and technology giant JD (NASDAQ:JD) rolled out a comprehensive China health care strategy to partner with hospitals, businesses, and government to develop an “Internet Hospital.” Through this platform, the disadvantaged, elderly, and immobile would be able to complete remote diagnosis and obtain treatment without even leaving their homes. With JD’s impressive logistics infrastructure, patients can have their medicine delivered on the same day, and the company has even used drones at one point to deliver medicine to hard-to-reach villages.
Meanwhile, Alibaba (NASDAQ:BABA), Tencent (OTC:TCTZF), and Baidu (NASDAQ:BIDU) also have their own health care divisions that are trying to introduce AI into the Chinese intelligent medicine. Tencent, for instance, has deployed AI-based disease-detection devices in over 100 hospitals, which have lowered costs significantly.
These developments are why investment interest has grown exponentially. Global venture capital funding in the digital health market, which includes private equity and corporate venture capital, neared $10 billion in 2018, according to Mercom Capital Group, compared with $7.2 billion the previous year. But now that every single tech major has finally broached digital health, we should see funding figures continue to climb in the coming years.
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