Technology has not only become an integral part of the healthcare sector but is also changing the very face of healthcare. Interest in digital health is palpable from the significant growth in investments in the space over the last five years.
Geriatric population with prevalence of chronic diseases and current and upcoming changes to regulations and reimbursements will drive adoption of digital health services and technologies in 2019 and beyond. Per a report by Transparency Market Research, the global digital health market, which was valued at $179.6 billion in 2016, is expected to reach $536.6 billion by the end of 2025 at a CAGR of 13.4%. According to Transparency Market Research, technology advancements in the medical and healthcare infrastructure will lend support to this market over the next few years.
The digital health space includes telemedicine and telehealth, big data and digital transformation, m-Health, bioinformatics and digital health, genomics and precision medicine and e-health. In fact, investors can take a look at the space as digital health presents alluring prospects for the MedTech players.
Let us delve deeper:
Big Data and Digital Transformation
The rise of big data and analytics in the current healthcare environment is not only beneficial for individual patients but also to the industry as a whole. Big data has been playing a crucial role in advancing the industry by preventing cases before their occurrence, reducing prescription errors, more accurate treatment and managed care.
Tech giants have been making noticeable forays into the healthcare industry since last year. Notably, Ascension’s collaboration with Google (GOOGL - Free Report) , which will include exploration of artificial intelligence/machine learning applications, has the potential to improve clinical quality and effectiveness, patient safety, and advocacy on behalf of vulnerable populations. This in turn will enhance both consumer and provider satisfaction.
Telehealth and Telemedicine
Telemedicine is an innovative way of offering clinical and medical health care at a distance through the use of telecommunication and information technologies. Per a report by Global Market Insights, the U.S. Telemedicine market is projected to exceed $64 billion by 2025. Prevalence of chronic diseases is one of the primary factors driving demand in this market.
Meanwhile, telehealth has been gaining momentum as an increasingly popular alternative to traditional clinical care. With technological advancements enabling a prevention and wellness model, and consumer preferences shifting toward more personalized care, consumers are becoming more open to these virtual solutions.
Electronic Health Record
Electronic health records (EHRs) have been crucial in improving the quality and safety of health care. The adoption and effective use of health information technology can help reduce medical errors and adverse events, enable better documentation and file organization, help doctors in tracking their treatment protocols and provide patients with information that assists them in following medication regimens and appointments.
Per a CISION report, global EHR market is anticipated to exceed $38 billion by 2025. Rising government expenditure and funding for the development of healthcare IT solution for better understanding of diagnosis and treatment pattern is likely to contribute to substantial HER market growth over the projected timeframe.
Digital Healthcare Stocks to Keep an Eye On
Here are three MedTech stocks that have been exhibiting significant potential in the digital health space:
Cerner Corporation (CERN - Free Report) : Cerner has been taking significant strides in the digital space with its AI-enabled workflow, Chart Assist, and focus on behavioral health technology. In September 2019, Cerner partnered with GetWellNetwork – a global consumer health technology company – to facilitate communication between providers and patients from inpatient to outpatient settings and home.
This Zacks Rank #3 (Hold) company has a long-term earnings growth rate of 13.2%. For 2019, the Zacks Consensus Estimate for revenues is pegged at $5.69 billion, indicating an improvement of 6.1% from the year-ago period. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Over the past year, Cerner’s shares have gained 19.6%, outperforming the industry’s growth of 6.7%.
Masimo Corporation (MASI - Free Report) : Masimo continues to remain committed toward patient monitoring and bolstering the same. In September, the company announced Pathway, which is a feature for the Root Patient Monitoring and Connectivity Platform. Pathway is likely to aid clinicians in simplifying decision making associated with newborn resuscitation.
This Zacks Rank #3 company has a long-term earnings growth rate of 23%. For 2019, the Zacks Consensus Estimate for revenues is pegged at $932.9 million, indicating an improvement of 8.7% from the year-ago period.
Over the past year, Masimo’s shares have gained 50.5%, outperforming the industry’s rally of 13.2%.
DexCom, Inc. (DXCM - Free Report) : DexCom has stirred up the digital health space, particularly with its G6 Continuous Glucose Monitoring (CGM) system. In October 2019, DexCom G6 Pro CGM received FDA nod. This innovative technology can gather real-time glucose data over a period of 10 days and has the ability to be switch between blinded and unblinded mode.
For 2019, this Zacks Rank #1 company’s Zacks Consensus Estimate for revenues is pegged at $1.45 billion, indicating an improvement of 40.1% from the year-ago period.
Over the past year, DexCom’s shares have gained 82%, outperforming the industry’s growth of 13.2%.
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