China presents a ripe opportunity for US digital health companies
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As the global digital health market snowballs, some US-based digital health startups are looking beyond US borders to rope in business: Boston-based digital therapeutics startup Biofourmis linked up with China-based online healthcare platform Jianke, for example, according to South China Morning Post.
Jianke boasts partnerships with a slew of hospitals and pharma giants, like Pfizer, per MobiHealthNews. And now, Biofourmis will be able to tap into Jianke's 2 million chronic disease patients in China. Bifourmis joins a small rank of health startups crossing over to China: San Francisco-based telemedicine startup More Health also leapt over to China to tap into its huge population.Here's why China presents a ripe opportunity for US digital health companies:
China's massive population of tech-savvy consumers opens the door for US companies looking to grow their user base. China's residents are more likely to use connected health devices than consumers in other regions. China also surpasses the global average in wearables ownership: For example, 36% of Chinese consumers own a "smart bracelet" compared with only 16% of the global population, per a 2018 Deloitte survey. A population that's more tech savvy when it comes to health could woo US-based digital health companies having a hard time securing a foothold in the market.
A doctor shortage might spark demand for digital health tools that sop up spending and help conserve resources.China's doctor-to-patient ratio is lagging: China had only 1.8 doctors available for every 1,000 patients in 2017, compared with the US' 2.6, per the latest OECD data. And the small pool of doctors is met with a population that's skewing older: China's population is aging fasterthan any other country's, Forbes notes. Digital tools could help provide adequate care for an older and sicker patient base and cut costs: China's healthcare spending's projected to skyrocket to $1 trillion by 2020, up from just $350 billion in 2011, per McKinsey.
Here's what's next: The current political clash between the US and China will stall US digital health companies from laying down roots in China in the near term.
Digital health companies have already landed in the crosshairs of the US-China dispute. The Trump administration forced Massachusetts-based PatientsLikeMe to separate itself from Chinese digital health company iCarbonX - which laid claim to most of its stake - in April. This could be a warning sign for US startups turning their sights to China for capital and tie-ups.
The threat of government backlash could deter smaller players from moving into China's market, and it also might make US companies an unappealing choice for Chinese companies looking for partners: Chinese funding for US businesses has plummeted 90% from $46 billion in 2016 to just under $5 billion in 2018, per CNBC.
So, as long as the strife between the US and China prevails, we don't think we'll see an upsurge of US companies flocking to China. If tensions cool in the coming years, though, the region could present a huge opportunity for US companies.
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