The US healthcare industry has adopted software as a service (SaaS) to increase its versatility and accessibility. SaaS users can now connect directly to their Electronic Health Records (EHR) through online portals and get billed through subscription fees.
In 2020, there were over 370 healthcare SaaS companies in the US. Studies show that the SaaS adoption rate in the healthcare industry is growing and will reach $51.9 billion by 2024.
For the last few decades, healthcare organizations have contended with heightened costs, a population that is growing older & sicker, and greater consumer demand for fast and convenient services. Furthermore, the electronic health record (EHR) boom over the last ten years has ushered in the need for organizations to revamp their operations, IT strategies, and infrastructure.
SaaS platforms give health organization partners the opportunity to realize cost savings and bolster their top lines. These platforms have also helped save more lives by delivering faster, better, and cheaper healthcare services, in addition to enhancing the quality of those services.
The medical staff can access lab results, tests, etc. from one place. Online sharing has allowed medical professionals from all over the world to collaborate and communicate.
Health records are maintained online, improving transparency.
Medical professionals can study, take tests, and enhance their knowledge at their own pace.
Through reliable SaaS platforms, medical institutes can access the latest technological solutions to improve data security at reasonable costs.
Health SaaS platforms can expand with the increasing user base, hence reaching a wider audience.
Telehealth, and specifically telemedicine, has gained immense popularity over the last few years. In broad terms, telehealth refers to electronic and telecommunication technologies and services used to provide care and services at a distance, while telemedicine is only the practice of medicine using technology to deliver care remotely.
A Frost & Sullivan report predicts that the telehealth market will reach an estimated $234 billion by 2023, up from $147 billion in 2019.
Covid-19 has accelerated the growth of healthcare SaaS startups in the US. With hospitals becoming areas for potential contagion, the demand for medical distancing, and consequently, virtual clinics has increased. In response, the American government provided $200 million to support telemedicine services. The effectiveness of telemedicine has been promising in diabetic care, dermatology, and cardiology, allowing for high-quality remote care while saving time and valuable physical space.
Big players have also started investing in the virtual healthcare sector. For example, Merck Global Innovation Fund has made more than 40 digital health investments and $500 million in evergreen funds related to therapy planning, care management, e-clinical trials, and health analytics. Similarly, BlueCross has pledged $575 million to invest in primary healthcare.
Amazon has also been one of the companies on the frontline to assist in the pandemic. AWS launched the HPC on AWS for COVID-19 Research and AWS Diagnostic Development Initiative (DDI) to support diagnosis, treatment, and vaccine studies. Moreover, the COVID-19 Dataset from Johns Hopkins is also available on AWS Data Exchange.
Healthcare represents a $3.5 trillion sector for Amazon. Therefore, the company launched Amazon Care, a healthcare program for its employees, and acquired Health Navigator. AWS also launched Amazon Transcribe Medical, a voice transcription service for physicians that inputs text directly into medical records. The service can be integrated into a cloud device or apps.
Amazon has also made several partnerships and investments in the healthcare space. For example, Cerner made AWS its preferred cloud provider to enhance the clinician’s use of the EHR, lower the operational burden on the health systems, and improve patient outcomes. Similarly, AWS collaborated with the Pittsburgh Health Data Alliance to improve cancer diagnosis, precision medicine, voice-enabled technologies, and medical imaging. They also hope to enhance treatments using machine learning. Both these partnerships resulted in an increase in AWS revenue by 35 percent, reaching $9 billion. Another AWS collaboration is with Virtusa, a digital health company. This partnership aims to conduct medical research using artificial intelligence. AWS also partnered with the NFL to use artificial intelligence and machine learning to observe the impact of player injuries, equipment, game rules, and rehabilitation strategies on player health.
Amazon has transformed the field of telemedicine. The introduction of Amazon Care will serve as the new model for corporate healthcare. According to a survey by Henry J. Kaiser Family Foundation, in 2020, annual family premiums for employer health insurance rose 5% to an average of $20,576. Workers pay $6,015 approximately towards the premium cost, leaving the rest up to their employers. With services like Amazon Care, corporations can save up on insurance costs while controlling for quality. It will also make access to primary health care easier, medicines more affordable, and the overall insurance process more straightforward and transparent. Such services positively impact employees, as found in a survey conducted by Deloitte. This system proved to be more convenient for 64% of the employees, and 52% agreed that it boosted patient satisfaction.
Amazon’s new healthcare company can also give smaller healthcare companies a much-needed boost. For tech giants such as Amazon to develop an efficient health system, they need to collaborate with those in the field already. Amazon can provide such measures through machine learning, AI, online communications, etc. To supplement their program, they need outside help from health experts, where these smaller healthcare companies come into action.
With Amazon’s entry into healthcare SaaS, other tech giants such as Apple have also entered the market. Apple has introduced AC wellness – an on-premise and remotely accessible healthcare service as part of their employee compensation and benefits package. However, Apple does not seem to be a strong competitor. Amazon has made the most in-depth move into the telemedicine sector, representing a $130 billion market opportunity if it opens its clinic to the general public.
Healthcare SaaS is one of the rapidly increasing industries in the USA and has successfully established a large customer base. It pervades almost all areas of medicine, ranging from cardiology to mental health to online pharmacies. Its rise is likely to accelerate in response to the COVID-19 pandemic, which increased the importance of virtual healthcare. With support from the US government and adoption by top companies such as Amazon, Healthcare SaaS is one of the most important industries to track moving forward.
