Japan Digital Health Market Analysis

Japan Digital Health Market Executive Summary

Japan's Digital Health market is projected to grow from $13.12 Bn in 2022 to $53.1 Bn by 2030, registering a CAGR of 19.1% during the forecast period of 2022-30. The per capita health expenditure (% - GDP) of Japan has observed a decent change from $4,256 which is 10.75% of GDP in 2018 to $4,360 which would be 10.74% of GDP in 2019 owing to the COVID-19 pandemic but is expected to grow more considering the growing usage of technologies and adoption of the same. Despite high expenditure, the quality of healthcare in Japan is generally considered to be high, with a strong emphasis on preventative care and the use of advanced technology in healthcare.

Digital health involves using technologies such as electronic devices, communication platforms, and software in order to improve and support healthcare services to improve efficiency and accessibility for patients to manage their own health better. It involves applications such as Electronic health records, telemedicine, Wearable devices & other mobile applications to aid remote healthcare. Furthermore, several top healthcare technology firms, such as Panasonic and Fujitsu, are based in Japan and are active in the development and application of digital health solutions. It is expected that the digital health market in Japan will expand exponentially in the near future.

Market Dynamics

Market Growth Drivers

There have been many factors driving the growth of the digital health market, with COVID – 19 outbreak paving a way for easy adoption of digital platforms by the people at large, technological advancements have been made as private companies research and innovate digital solutions.

The ever-growing aging population as Japan has one of the oldest populations in the world, with a large proportion of the population over the age of 65, an increase in rates of chronic diseases & most of all supportive government response and initiatives to required funding have been considered to have a major impact over the digital health sector in Japan. The Health IT Promotion Council was established by the government to encourage the development and utilization of digital health technologies such as telemedicine, EHRs, and AI-based diagnostic tools.

Market Restraints

Even though the pandemic highlighted the importance of the digital health market in Japan, it is limited by a lack of digital infrastructure especially in rural population, data security concerns that requires the collection, storage, and sharing of sensitive personal and medical information, which may be sensitive to being used for marketing purposes. Many physicians may be unwilling to change their present procedures and practices. Lack of interoperability and a regulated framework to govern the use of digital health applications can also be a restraint hindering the growth of the market.

Competitive Landscape

Key Players

• CureApp Co., Ltd. (JPN)
• Ubie, Inc. (JPN)
• iCARE (JPN)
• Allscripts (USA)
• Apple Inc. (USA)

Notable Recent Deals

December 2022: Ubie raised total funding to $45.2 million to accelerate growth & presence in the US by providing an AI-powered symptom checker apps and hospital SaaS products.

August 2018: CureApp secured about $51.5 million US from a global investment firm Carlyle in a series G round to assist with the implementation of digital hypertension therapies as well as the extension of its development pipeline.

Healthcare Policies and Regulatory Landscape

To assist the growth and use of digital health in the country, the government has enacted a variety of rules and regulations. The Ministry of Health, Labour and Welfare (MHLW) of Japan, established Interim and Exceptional regulations for medical care using telephones and other communication tools due to the spread of the COVID-19 Infection in 2020.

To regulate the collection, usage, and storage of personal information, Japan has established the Act on the Protection of Personal Information (APPI). The APPI also applies to digital health solutions, which must comply with data privacy standards.

Reimbursement Scenario

The National Health Insurance System (NHIS) is a nationwide public healthcare system. Everyone in the country has a right to all forms of medical care services (including medical treatments and medications) supplied by medical institutions under the NHIS. Individuals receive treatment at a medical facility and pay a percentage (10% to 30%) of the cost of that care. The remainder of the cost is invoiced to the payment agency, which reimburses the medical institutions from insurance premiums collected from the insured by the health insurance association, with the government filling any deficit.

Reimbursement for digital health solutions is multifaceted, and factors such as the type of intervention, the healthcare provider, and the patient's insurance plan can all have an impact. Services such as telemedicine, and certain mobile health app solutions are covered under NHIS yet there is a lack of clear guidelines for the same. NHIS is more likely to make the necessary changes to incorporate more and more digital solutions into the coverage.