Digitalization of Healthcare

One of the most fascinating things for a young Sven Otto was, of course, all the technological devices. Mobile communication, wireless headsets, tablets, voice-commanded computers, 3D printers - everything was included in Star Trek decades before they appeared in reality.

Similarly, with the digital entry into healthcare. So much more and better care can now be produced with the help of the tremendous advancements in technology over the past few decades. Everything from sequencing our genome to advanced solutions for scanning, diagnosing, and treatments that just a few years ago seemed like something out of "pure Star Trek."

But it's not just in the production of care where technological solutions have made headway but also in distribution. Technology has made people's access to care and advice so much easier and more reliable. Many unnecessary hospital visits are avoided when medical monitoring and simpler diagnoses can be done remotely, saving substantial amounts that can be put to better use. But it's not just saving money - it saves suffering and worry for people. Accessibility to good care in time has dramatically increased.

The global market for digital healthcare services is expected to grow by nearly 30 percent per year between 2020 and 2027, reaching a value of USD 600 billion by 2025. In the debate, many worry about this significant growth, fearing that these services might encroach upon healthcare and sideline activities from the regular healthcare system. Some are outraged about profit in healthcare and want to completely ban private profit interests.

For me, it's the latter perspective that dominates. Take the digital healthcare provider Kry, for example. Since its founding in 2014, they have conducted eight million digital patient consultations. That's eight million sick and worried people who avoided going to the healthcare center, avoided sitting in the waiting room for hours, just to get the right diagnosis and a prescription. It has presumably freed up significant resources for primary care for other patients with needs that couldn't be addressed digitally. For the individual, this development is immensely positive. Accessibility has dramatically increased. The time taken for each healthcare contact has decreased. The risk of infection spread has reduced. Wear and tear on regional facilities decrease, queues have become shorter. Diagnostic and care methods have become more effective and safer.

It's a fantasy to believe that healthcare can do without private supplements. On the contrary, it is in the private sector where many of the innovative solutions for healthcare distribution are found. And in trying to facilitate for individual patients, private companies have managed to attract billions in investments from small and large investors - capital that would otherwise never have benefited healthcare.

Sure, there might be grumbles about reimbursement models, salaries, and costs. That will always happen in any publicly funded system. But the development cannot be stopped - for one reason alone: the patients like what they see. Eight million patients can't be wrong. They like receiving good care in time. Therefore, private actors in digital healthcare will increase. And even more patients will get good - and newly developed and as yet unknown - solutions to their healthcare needs. It's good for them, and it's good for healthcare as a whole. It's Star Trek for real. New technological solutions, the struggle between good and evil, healthcare's triumph over the chaos of diseases.

Stockholm on the 4th of September 2023

Sven Otto Littorin

Partner, Stadsholmen Equity