Digitalization and healthcare – quo vadis, Germany?

From all the industry segments in Germany, the level of digitalization is lowest in healthcare. There, the share of SITS expenditures in terms of total IT spend stands at 37% and is thus below the average of 50% we see across the other sectors.

However, there have been more and more calls for increased digitization, especially in the last few years, and not only among health professionals but also among the (increasingly tech-savvy) public. This is down to a multitude of reasons:

•          Currently, there are no standardized patient data interfaces, so there is hardly any exchange of patient data between the stakeholders, i.e. physicians, hospitals and insurers, which increases the risk of losing data.

•          Germany is facing a shortage of skilled healthcare workers. In this regard, AI solutions could help mitigate this trend by freeing staff from repetitive administrative tasks and thus reducing financial losses.

•          The country suffers from demographic change and an aging society.

•          The decreasing number of doctors in rural areas is causing problems and leaving people more vulnerable, as they are confronted with limited access to medical care.

•          A new challenge is that young people, also known as digital natives, are becoming epidemiologically more prone to certain diseases. And we are expecting them to increasingly call for more networking and ad-hoc solutions when it comes to receiving medical care.

Digitization will not only result in monetary benefits but also in improved illness detection and increase in the quality of patient treatment. At the moment, the potential offered by the fast-progressing technologies is being limited by an overcautious attitude towards data protection and strict policy regulations. Therefore, the overarching challenge for the healthcare sector is the creation of an appropriate framework to balance the benefits for society while meticulously taking into account data protection.

While at first glance, the situation in healthcare does not appear overly bright, PAC sees light at the end of the tunnel:

The so-called "eHealth law", which was ratified in December 2015, contains a gradual policy plan for the implementation of a nationwide telematics infrastructure interconnecting patients, doctors, hospitals and insurance companies. The fact that the Ministry of Health is threatening to impose sanctions and penalties can be interpreted as a first attempt to expedite the process.

Another ray of hope for digitalization in the healthcare segment is the fact that the German Medical Assembly (Deutscher Ärztetag) is expected to repeal the ban on remote treatment (Fernbehandlungsverbot) in May 2018.

Based on these two developments, PAC expects SITS expenditure to experience an average annual growth of 4% until 2022.