Your Fitbit is Going to Replace Clinics near You

First, it was payments and now it’s healthcare. Big Tech in the US and China is revolutionising the health sector, with hundreds of billions of dollars of market share at stake. There are multiple factors that are driving this movement. For starters, there’s the simple need to find new avenues for growth for both American and Chinese tech giants, and there are only so many trillion-dollar industries to disrupt to add shareholder value. China has more reasons and more at stake here. Both countries boast of high levels of internet penetration and smartphone use. Both the US and China are rapidly aging societies. This implies a growing geriatric healthcare burden and creates incentives for new alternatives to overcrowded hospitals. Both are home to a wealthy middle class, which is seeking better health solutions. According to Royal Philips’ Future Health Index 2019, both the US and China are global frontrunners in terms of adoption of digital health technology, with a large number of medical professionals and consumers relying on tools for self-monitoring and online consultations. This is a key contributor to their rise in demand for wearables. This is supported by and fuels their dynamic and thriving innovation ecosystems. This explains why American and Chinese companies are making moves in healthcare based on their core competencies. Recently, Amazon backed on its software to move into telemedicine and also invited healthcare companies to build tools on Alexa’s platform. Amazon’s core competence, however, is its efficiency in distribution networks. So the e-commerce giant acquired Pillpack, an online pharmacy. The Alibaba Group, on the other hand, entered the healthcare game early with its TMall Pharmacy in 2015. However, in 2018, Alibaba consolidated its healthcare assets, including medical devices, e-appointments, drug purchases, and delivery services under the banner of Alibaba Health, which leverages the group’s advantages in data processing and e-commerce. Another big Chinese player in the field is Tencent, which owns WeDoctor, one of the world’s biggest health tech start-ups. Google is great at data analytics and OS development. Keep that in mind and Project Nightingale begins to make sense. As does Google’s $2.1 billion acquisition of Fitbit. Google’s Chinese search counterpart Baidu has bounced back after a 2016 controversy over healthcare ads to explore the possibility of leveraging artificial intelligence and blockchain technology for its medical data sharing and distribution solution. Meanwhile, Apple excels in devices that track wellness. Think Apple Watch and the electrocardiogram that comes installed on it. Or the dedicated carekit and researchkit open-source frameworks that Apple has been pushing recently for developers. IDC data for 2018 show that while Apple is the market leader in the wearables segment, Chinese firms Xiaomi and Huawei take the second and third spots, respectively. Their global ranking is buttressed by their dominance in the Chinese and Indian markets. So what does the future of the health tech sector look like? We predict three scenarios that we believe will play out over the next five years: First, wearables will become the new OPDs: With Big Tech investing in healthcare across Silicon Valley, Zhongguancun, and Shenzhen wearables and telemedicine have a bright present and future in their diagnostic capabilities. Recording pulse or temperature, scanning bones or tissues, diagnosing based on those, and getting medicines have become or are becoming tasks that can be worked upon remotely or be delivered to you. Over the coming decade, wearables will reliably send accurate data in real-time to process for millions of people. This would give them a decisive advantage over the number of people physical OPDs can carter to, making the latter obsolete.  Second, tech giants will dominate health & life insurance: Wearables and smartphones are becoming increasingly sophisticated in diagnostic capabilities and tracking. As that continues to happen with every new iteration of FitBits and the Apple Watches, the OS becomes a platform for companies to sell services and gain revenue. WatchOS and WearOS (and/or what future FitBit OS is going to be called), are likely to go on to sell insurance through their devices. Whether Google/Apple curate a new insurance policy or end up acquiring an insurance company to do it for them is irrelevant. Considering that insurance is a lucrative market, and that data from the apps in the OS gives Google/Apple a comparative advantage means that it is the matter of when, not if, for both tech giants to start peddling their own insurance through the OS on smartphones or wearables. Third, Sino-US rivalry will stymie health tech’s future growth: The deepening strategic rivalry between the US and China has already shifted from competition over trade policies to a battle for technological supremacy. This is playing out in the form of expanding the definition of sensitive technologies that must be protected, tighter security reviews of Chinese tech investments, undoing of completed acquisitions, blacklisting of certain firms, export restrictions and a contest for foreign markets and data streams. Much of this is captured in the geopolitically charged discourse over Huawei and 5G. The health tech industry can expect a similarly rocky future. Collaboration between research communities and business entities across the Pacific will be difficult. Acquisitions in foreign markets are likely to become a politically polarising decision. Capital flows into each other’s health tech ecosystems will become increasingly constrained. Data will become the biggest sticking point, with most states preferring some form of localization.