Digital health in Germany: Patients and care providers want change, while venture capital for health start-ups is up

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  •  Germany is falling behind: Several European countries have successfully implemented electronic prescriptions (Estonia 98%, Italy 80%, England 57%) while Germany has postponed to start work on implementation until 2019
  • Germans want digital change: About 6 out of 10 patients believe their health data will be less well-protected with digitization. However, even more, 8 out of 10 Germans expect better treatment if care providers exchange health data
  • In Germany, venture capital for health start-ups has increased from €11 million in half-year 2015, to €253 million in half-year 2017

 

Traditional healthcare providers like doctors, hospitals, health insurers, medical product and service companies are under increasing pressure; Long waiting hours, time-consuming appointments, false diagnoses or double examinations and a lack of collaboration between healthcare professionals could often be avoided if more digital technology were to be used in healthcare. Patients wonder why the internet has improved most areas of their lives excluding this one. 

  • Why do patients need to fill out a form with their medical history every time they visit a new doctor?
  • Why do they have to repeat talking through their case history when they have been referred to this specialist doctor and when they are handed over to another doctor who is doing the further treatment?
  • Why can’t a radiologist send his images and diagnoses electronically to the relevant colleague? Instead, the patient often has to take the hard documents in an envelope.
  • Why do patients need to visit the (crowded) doctor’s office for a follow-up prescription in person, if no consultation with the doctor is needed?
  • Why are doctors not using the vital data that many of their patients are tracking themselves via apps?

 

The example of telehealth: The development is unstoppable

As society ages, there will be more demand for healthcare services while supply of doctors, especially in the countryside, will diminish. Today, one third of all general practitioners in Germany are 60 or older (KBV 2017). By 2030 there will be a shortage of over 6,000 doctors (KBV 2016). Telehealth solutions such as video-calls with doctors or online-submission of vital signs data will present the opportunity to provide medical services in areas with little or no on-site presence of doctors. While some European countries have already seized on the chances of telehealth, Germany in particular is lagging behind.

 

Germany lags behind: Example of electronic recipe and telemedicine

In the U.S. for example, already 62% of all hospitals offer telemedicine services (American Telemedicine Association, 2016). In Germany it is only 10% (Bitkom 2017). For electronic health records the gap is even wider: 95% of the state-certified hospitals have implemented them (Health IT US Government 2017). In Germany, the figure stands at only 9% according to a recent survey (Bitkom 2017).

Germany is also lagging behind many of its European neighbors as the example of electronic prescriptions depicts: The German Ministry of Health has announced it will not begin working on its introduction before 2019 (DAZ 2017) – when it was identified as an area with one of the greatest potentials for savings. In many other European countries electronic prescriptions have been common practice for a long time: Estonia introduced electronic patient files and subscriptions in 2008 and today issues 98% of all prescriptions electronically (WHO 2016, p). In Finland, electronic prescriptions will be the only option for dispensing medication from this year (2017) onwards. Belgium has announced the phase-out of paper-based solutions by 2018 (De Standaerd, 2016). Other countries such as England (57%, NHO 2017) and Sweden (90%) have high adoption rates. Even Italy, which is, like Germany, a large, federally organized country, prescribes 80% of all drugs electronically (March 2017).

 

Doctors and Patients both want digital change, despite concerns over data security

While Germany is lagging behind in these aspects of digital health, physicians and patients want technological change: In Germany, 62% of all doctors believe digital technologies will help them to reduce costs (Bitkom 2017). Patients also see the change positively: Although about 6 out of 10 believe their health data will be less well-protected, even more, 8 out of 10 Germans expect better treatments if care providers exchange health data (Forsa 2017). 75% of patients would provide their personal health data for research if the data is anonymized in order to help prevent diseases (Bitkom 2017). Already 31 million Germans, a staggering 55% of all internet users in this country, purchase drugs online (Bitkom 2016).

Investors are catching up with digital health, venture capital is on the rise

The global venture capital for digital health start-ups is at a record high with over US$ 3.2 billion in Q2, 2017, which is far more than what was invested in the whole year of 2013 as can be seen in the longitudinal tracking of CB insights. This is against a backdrop of venture capital across industries cooling down as depicted in the longitudinal tracking of KPMG (KMPG, p9): The overall venture capital spending decreased in both in Q1 and in Q2, 2017 in a year-on-year comparison. Investment in general has been levelling off for the last three years whilst in healthcare the overall trend is up again. In Germany, venture capital funding for health start-ups has increased by a factor of 23 within two years: from €11 million in half-year 2015, to €99 million in half-year 2016 to €253 million in half-year 2017 (EY 2017).

 

About Heartbeat Labs
Heartbeat Labs is a healthcare company builder based in Berlin. Our agile teams combine entrepreneurs, medical specialists and technology experts to launch several digital health companies per year. We provide seed funding of €0.5 to €5 million, access to a unique network of investors and operational expertise in marketing, HR, finance, regulatory affairs and more. Our team has the experience of building more than 20 successful internet companies that have brought the advantages of digitization to industries such as financial technologies and advertising.

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