The pandemic has sped up the growth trend in digital health in the BioRegion that started several years ago, to such an extent that Barcelona has climbed in the ranking of the European cities with the most important digital investments in 2020, just behind London, Stockholm, Oxford and Berlin. Despite the acceleration in the digitalization of health systems, the incorporation of digital technologies in the provision of healthcare services and making them reach people are still challenges ahead for Catalonia.
COVID-19 has accelerated the digitalization of healthcare services around the world. The sector has urgently needed to evolve in order to deal with interruptions in essential healthcare services and has found digital solutions to be a major ally. The pandemic has contributed to the permanent expansion of remote care, the profusion of data, patients’ use of applications and electronic devices and the inclusion of digital protocols in healthcare professionals’ activities, among others. These actions have also enabled healthcare to be guaranteed at a time when the saturation of facilities due to COVID patients led to a curtailment of other activities.
Quick growth in digital health has been detected in the BioRegion in recent years, and 2020 has confirmed this trend to become a milestone. This success largely came from the increase in the number of insurance companies in the subsector due to several important rounds of funding and the acceleration many companies have experienced when responding to the challenges of digitalization.
While the BioRegion had around 20 digital health companies in 2010, ten years later it has more than 200; that is, the number of companies has increased 10x, and they invoice €119 million as a whole, as shown in the BioRegion 2020 Report. This explosive growth reveals the youth of the subsector, 87% of which is comprised of startups. Thus, the typical company is new, founded less than 5 years ago, and small, with no more than 10 workers.
The main technologies that these companies use are artificial intelligence (with practices like machine learning and deep learning), virtual reality, big data, augmented reality and 3D printing. Artificial intelligence and virtual reality are the technologies with the highest investments.
Even though most of the digital health map is comprised of micro-enterprises, there are also medium-sized and large companies, including Doctoralia, founded in 2007. This is one of the sector's clearest success stories: in 2016, it merged with DocPlanner, and 13 years after it was founded it has more than 2,500 workers in Barcelona. The capital of Catalonia is also the international headquarters of one of the global leaders in remote medicine, Teladoc Health, which moved to the city in 2018 after being acquired by Advance Medical. Today, Teladoc Health has a staff of more than 600 employees in the city.
Even though it is still a young sector in expansion, the funding secured by these companies has also taken off in a year which was meant to be difficult due to the pandemic. The digital health startups of the BioRegion raised €34.5 million in 2020, seven times more than in 2016 (€5.1 million). On average, each operation that closed raised €2.7 million, twice the amount in 2019 (€1.4 million). And the upswing seems to be continuing, as in June 2021, digital health companies raised €22 million, more than three times the amount in the same period last year (€6.7 million) and higher than the total value of investments raised in 2019 (€21 million).
The main driver for this growth is primarily venture capital, and international participation is key. In 2020, the BioRegion reached an exceptional milestone thanks to international private investment: Koa Health, the Telefònica spinoff that offers digital solutions for mental wellbeing, closed the largest round of investment in digital health in the history of the BioRegion and all of Spain after raising €30 million.
All of these indicators reveal the rise of a subsector which despite the pandemic has led Barcelona to rise to fifth place in the ranking of European cities with the largest rounds in digital investments in 2020, just behind London, Stockholm, Oxford and Berlin. In fact, the digital investments raised this year are expected to surpass those of last year.
In this context, it should come as no surprise that Barcelona was once again the city chosen to host 4YFN, one of the most important international gatherings targeted at startups, which positions the city as a benchmark in digital entrepreneurship. This gathering brings together investors, startups, corporations, and public institutions to give shape to the future through digital technologies.
The event, which is being held from June 28 to July 1 as part of the Mobile World Congress (MWC), has an area exclusively set aside for the digital health sector, where Biocat, in conjunction with ACCIÓ, Barcelona Tech City and CataloniaBio & HealthTech, have set up its own area, coordinating the presence of 27 companies and entities from the BioRegion.
A range of studies, including those by the World Health Organization (WHO), show that the application of new technologies in the field of healthcare makes these systems more sustainable and efficient while also lowering inequalities in access to care and treatments. In this sense, they claim that the new technologies can offer a way to prevent illnesses, instead of treating them. Countries like Estonia and Germany are on the cutting edge of this strategy, and Catalonia is working on its own.
One of the challenges in implementing these strategies is adapting the healthcare provider funding model to include the use of the new technologies. Jordi Piera, the Director of the Digital Health Strategy Office of Catalonia, part of the Catalan Health Service (CatSalut), claims that “today, we have a system that does not include many of the digital transformation technologies and therefore there is no incentive for the providers to implement them.” This is the challenge that startups face when trying to introduce their technologies in the healthcare system.
The pharmaceutical industry also acknowledges the weaknesses of the system, especially in terms of the standardization and monetization of digital therapy software. “We are making slow progress. The FDA has stopped certifying software – which needs constant review – to certify companies instead,” explained Gemma Estrada, Director of Digital Health and Technologies at Ferrer, at one of the recent gatherings held by Esade Alumni, where Guillem Masferrer, Director of Investments at Asabys, and Raquel Riera, Director of Acceleration and Talent at Biocat, also participated. “Private healthcare and insurance companies are the stakeholders making the most use of these new technologies,” stressed Riera, while also emphasizing the important role played by private investment today in consolidating the digital ecosystem in Catalonia. This reflection was shared by Masferrer, who assured Asabys’s focus on digital solutions “as long as they have a positive impact on patients’ wellbeing and health.” The Asabys representative is convinced that the next technological revolution will be asynchronous doctor's appointments.
The leader of the digital health strategy in Catalonia sees another challenge when implementing these technologies within the system: training healthcare professionals in digital talent. “If we want this group to help us implement this digital transformation, we have to equip them with the tools and abilities needed to do so,” he said. In fact, other regions and countries have heavily focused on training professionals as a way of making headway. One example is in the United Kingdom with the NHS Digital Academy.
Even though the pandemic has accelerated the introduction of new digital technologies into the system, especially in terms of professional-patient communication, Jordi Piera admits that it has done so in a “somewhat haphazard way,” with the ultimate goal of dealing with the urgent situation. From now on, he says, “we have to stop and try to join digitalization strategies with business strategies to get all the stakeholders to work together.”
2021 is full of opportunities, especially thanks to the boost of digitalization in the healthcare system from Next Generation EU, the European recovery and resilience funds. Catalonia plans to earmark much of these funds to the macro-project Health 2030, a program to transform the Catalan healthcare system by developing and adopting innovative technologies.
As envisioned, Health 2030 is upheld on three main principles: reinforcing the healthcare system through digitalization, sustainable transformation based on innovation, and bringing together Catalonia's numerous capacities in emergent therapies to work towards more personalized, precision medicine.
Biocat has been part of the team that conceptualized the Next Generation proposal for Health 2030 , and disruptive projects have been planned to include all kinds of stakeholders and unique equipment or transversal platforms that are promoting a long-term change while facilitating the sustainability, modernization, and development of new healthcare models.