Digital health in Germany – Should you become a first-mover or wait until the road is cleared?
Is digitization part of the answer to the challenges within the German health and care sector – as it is in most other European countries? And why is Germany currently one of the European countries with the least digitalized healthcare sector? Get answers to these complex questions – and prepare your German entry - or hold your breath.
Europe is ageing. Fast.
In Germany, it is even more drastic and distinct than in most other European countries. The rapid ageing causes severe pressure on all aspects of the German economy. Especially the health and care sector is being challenged.
Source: UN World Population Prospects. Visualization by Aron Strandberg
Just like in other European countries, digitization, both of workflows, administration and other aspects are seen as part of an answer to the challenges. However, while digitization of the health and care sector has been tested and implemented in the Nordic countries for the last decade, Germany is lacking behind and is regarded as one of the European countries with the least digitalized healthcare sector.
Source: https://digital-agenda-data.eu/charts/desi-components. Click to enlarge image.
Germany falls behind
Complicated reimbursement catalogues, a segmented healthcare sector with multiple stakeholders and strong lobbies, complex administrative structures and a general lack of funding of healthcare infrastructure. A variety of factors has caused Germany to fall behind in the implementation of the standard of digital health & care technologies. I.e. electronic patient journals.
As a consequence, digital solutions developed to support people in need of care, enhance their independence or ease work processes for care staff, are not yet implemented in the German healthcare sector, whereas such solutions are found implemented at scale in Nordics.
The Nordic opportunity
This digital divide along the Nordic-German border creates a multitude of opportunity for the Nordic companies having products and services within digital health. Nordic companies have been able to test and scale their products on their home markets for the past decade. Many of them are ready to expand internationally, with Germany as the gigantic and unexplored market, in the heart of Europe, being an attractive priority.
And indeed, there are signs that Germany is moving towards a more digitalized healthcare system.
The new German Minister of Health kickstarts the digitization process
Under pressure by the demographic changes and its economic consequences, the new German Minister of Health, Jens Spahn, appears ready to pass the necessary hurdles to kickstart the digitization process.
In 2018 his ministry passed a law obliging all of the more than 100 German public and private healthcare insurances to start providing electronic patient journals to their members by 2021. Digitization is also on the agenda also in other healthcare-related fields.
The big ? about Germany as an export market
For Nordic companies with digital products for the health and care sector, the question is: IF and WHEN they should actively focus on Germany as an export market? It depends on a variety of product and company-specific aspects, but most of all on HOW and WHEN Germany opens up for digital products within the healthcare sector.
During a recent Deep-Dive event for Nordic companies, Prof. Dr. Dr. Wichelhaus, a healthcare economics expert from the Hochschule Hannover, was asked about this strategic question. He remained critical of the near-future prospects for digitization of the German healthcare sector.
Concerning the recent digitization reforms, he pointed towards the administrative challenges, the costs of changing workflows and training of healthcare staff, that in its majority is not used to working digitally. These are definitive challenges that Nordic companies need to take into account while considering the German healthcare market.
It can be argued that there are no longer any doubts that the German market for digital health and care is about to experience a paradigm shift. But there are strong interests at stake, hence, it is unknown how fast and in what manner these changes are going to happen.
Are you a first-mover?
Whether it is worth being a first-mover for digital health and care products in the German market depends on factors such as:
- The financial solidity of your company - can you face years of investing without much revenue?
- The kind of product you offer - can it easily interact with the current workflows and the current German payment model?
- Your strategy - does it fit in the German healthcare sector or do you need to adjust strategy or perhaps even the product?
But fundamentally it all depends on how the healthcare digitization reform in Germany will turn out, which no one can give a guaranteed answer too - yet.
Join the programme Digital Health & Care 4.0
These and many other questions were answered when 22 Nordic companies went on a Deep Dive to Hannover as part of the Digital Health and Care 4.0 programme. If you missed the Deep Dive, you are still welcome to join the activities in the programme.