Opportunity Mapping of the E-Health Sector prior to COVID19 Outbreak
Authors: Akad Doha, Markman Ofer and Lefkort Jared
This paper investigates 30 deals in the fields of digital health and e-health from 2017-2020, specifically observing deal size and other critical information.
Variables:
Target audience – the target audience of the deal purpose
Year – the year in which the deal was conducted
Deal size – deal size in million $USD
Deal business rationale
Platform type
Service type
Deal prioritization
Market
Field
Descriptive Statistics and General Characteristics:
Deals in the field of digital and e-health were targeted towards six groups. This includes patients, {general}, organizations, employees, aging in place, and students. The majority of deals were focused on patients, as is seen in figure 1.
Figure 1: Tech Company Deals Organized by Target Population
Figure 2: Size of Tech Company Deals from 2017-2019, Organized by Target Population
Figure 2 depicts the size of deals in the digital and e-health fields in $USD between 2017-2019, targeting different populations. Those deals targeting the “general” population, and those targeting patients were observed to have the largest size. In particular, deals focused on patients were found to be significantly larger in 2018 when compared to patient-focused deals in 2017 and 2019.
Figure 3: Size and Specific Market of Digital and E-Health Deals by Target Population
Figure 3 shows that in the technology market, the greatest deal size is observed when targeted towards the general population, or patients. On the other hand, deals in the health services market tend to have the greatest size when targeted towards general customers, employees, and patients.
Figure 4: Rationale for Deals in the Tech Industry
Figure 5: Deal Sizes based on Business Rationale
Deals that introduce a new service for a company represent the largest deals. It is also important to note that deals focused on digital solutions and improvements to existing services were fairly large in size. When examining the relationship between deal size and business rationale, we can see that the largest and majority of deals were focused on company independence, acquiring information, market expansion, the addition of a new service or product, and the expansion of saas (software as a service).
This information has led to the analysis that there is a relationship between business rationale deal size.
Figure 6: Number of Deals by Platform Usage
While substantial platform usage information was not available for all companies, for those that had data, app and cloud platforms tended to be the dominant platform.
Figure 7: Number of Deals by Target Experience Improvement
Figure 8: Deal Size by Target Experience Improvement
Customer and patient experience where the main interest of deals in 2017 and 2018.
Figure 8 shows that customer and patient experience categories account for the largest deal sizes.
Figure 9: Number of Deals by Market Sector
Figure 10: Deal Size by Market
Figure 9 depicts the fact that most deals occurred in the health services, technology and analytics markets from 2017 to 2019. Figure 10 shows that clinical, research, and shopping markets have the three largest average deal sizes. Thus, the market in which the deal occurs plays a major role in the size of each deal.
Figure 11: Number of Deals by Field
Figure 12: Deal Size by Field
The majority of deals observed occurred in the fields of healthcare and internet-based media. The field of the deal is one of the four main contributors to the size of a deal.
If we look at the deal size specified by field, we can see that diabetes care, wearables, life sciences and oncology care have the largest sizes.
Figure 13: Average Deal Size ($USD) by Year (2017-2019)
Deals observed in 2018 had the largest size in terms of $USD when compared to those occurring in 2017 and 2019. However, the largest single deal took place in 2019.
Inferential Statistics:
As depicted in the above section, the main factors that affect the size of a deal are the market, business rationale, improvements in targeted user experience, and field of the deal.
A clustering analysis has been performed for years between 2017-2019.
Figure 14: Cluster Analysis of Deal Size by Year (2017-2019)
Three different groups were identified through the cluster analysis:
- Cluster 1 (Red): deals in 2019 and 2018 sizes less than or equal to 1 billion.
- Cluster 2 (Green): deals between 2017-2019 with sizes of approximately 2 billion or greater.
- Cluster 3 (Blue): deals in 2017 under 500 million.
Figure 15: Cluster Analysis of Deal Size by Market Sector
Figure 15 shows that cluster 2 deals (green) in the clinical, health services, and research markets are all sized at approximately 2 billion and greater.
This trend continues amongst the other clusters, as cluster 3 deals (blue) remain at a size of less than half a billion in the health services and analytics markets, and cluster 3 deals (blue) remain at a size of 1 billion or less.
Thus, in general, all markets offer approximately 1 billion and under deals with higher deals only available in clinical, health services, and research markets.
Figure 16: Cluster Analysis of Deal Size by Field
Figure 16 shows that the cluster 2 deals (2 billion in size) mainly occur in the fields of diabetes care, health wearables, internet-based media, life sciences and oncology care.
There are deals in all fields that are approximately 1 billion and under.
Cheaper deals in blue (below half a billion) are only in healthcare and smartwatches.
Figure 17: Cluster Analysis of Deal Size by Business Rationale
Business Rationale: Deals aiming to add new services, increasing company independence and acquiring wider information show deal sizes of approximately 2 billion and above. It is noteworthy that deals whose rationale is to integrate more clients, more experts and provider groups, and analytical solutions are clearly under 0.5 billion $USD.
Figure 18: Cluster Analysis of Deal Size by Deal Prioritization
From figure 18 one can observe that deals with higher deal prices tend to focus on customer and patient experience.
Other categories are mixed and do not depict a trend when it comes to the price of deals. However, we can see that most of the cluster 3 deals focus on patient experience.
Conclusion:
More Comments, conclusions:
Deals approximately 2 billion and above are featured with:
- clinical, health services & research markets
- diabetes care, health wearables, internet-based media, life science and oncology care fields
- business rationale: adding new services, company independence and acquiring wider information.
- Are interested in customer and patient experience.
Deals approximately 1 billion and below are featured with:
- in 2018-2019
- Analytical, delivery, digital, electronic solutions, expand capability, expand globally, improvement, inelegant platforms and more client’s
Deals under 0.5 billion are featured with:
- In 2017 only
- Deal offers integrating more clients, more experts and provider groups and analytical solutions.
- Patient and employee experience.
End Notes
Statistical Methods: Since we are interested in the features of deals in the tech industry between 2017-2019, before doing the clustering several multi-linear models was conducted to decide which model include the best variables to explain deal size looking at different significant measures mainly AIC (r-squared, adj-r and so on).
Additional Clustering Information: in figure 16, Although healthcare exists in all clusters, because of other specific descriptions of the field we still can say that the clusters contributes to the understanding of what fields are best to wrap up a deal.
2012pharmaceutical
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Paper in collection COVID-19 SARS-CoV-2 preprints from medRxiv and bioRxiv