Digital Tech Trends and the Future of the Health Care Industry

Health technology has the potential to substantially decrease costs for hospitals and other medical facilities by diverting emergency room visits and inpatient admissions while improving patient outcomes.

Editor's Note: This article was originally published in Expansion Solutions in the November/December 2017 edition. 


Every single industry sector, and the U.S. economy as whole, is being transformed at a rapid pace by digital technologies. We can describe the next phase of each sector as simply, the “tech of everything.” The financial industry is progressing with the advancement of FinTech, in addition to agricultural-technology and manufacturing-technology, also known as “Industry 4.0.” Health care is no exception, as the field of health tech expands throughout the country. 

Have you ever thought of your phone as a medical device? What about that activity tracker that keeps beeping at you to get up from your desk and take a flight of stairs? Innovations in the field of health technology aim to use the codes, data and graphics that allow us to communicate across continents to better understand and predict vital health indicators. One of the primary functions of health technology is to harness the data available to many of us through objects that we already have, like phones, smart watches and even medical devices like pacemakers, to allow us to theoretically make smarter choices about what we eat, suggest how and when we exercise, and alert individuals to their predisposition to chronic ailments based on algorithms. For the broader health system, health technology has the potential to substantially decrease costs for hospitals and other medical facilities by diverting emergency room visits and inpatient admissions while improving patient outcomes.

This technology is changing rapidly and is still earning the trust of doctors and patients across the country. While there are many technology areas impacting health care such as those related to materials, drug discoveries, and medical devices, this article will focus on primarily on digital technologies. We will discuss the use of machine learning in predicting a patient’s diagnosis, the use of electronic health records and cloud management systems, along with related security concerns in moving delicate patient info into cyberspace. Lastly, we offer examples of strategies that will help economic development professionals and municipalities capitalize on this dynamic industry.

Health Care Spending on the Rise

Health care spending is on the rise, while providers struggle to improve quality of care - creating opportunities for investments in digital health technologies. From 2012 to 2017, total national health expenditures are anticipated to increase at an annualized rate of 4.1%, to a total of $3.4 trillion by the end of 2017.1 

As of 2016, health care activities – including medical, paramedical, nursing, dentistry, home health care agencies, nursing homes, hospitals, prescription drugs and other subsectors – accounted for 20.1% of the United States’ Gross Domestic Product (GDP). Spending increases in health care are anticipated based on two primary sources: the aging population, and expansion of federal health care programs like Medicare and Medicaid. And while the U.S. ranks as having the highest health care spending per capita among 11 nations that were studied by the Commonwealth Fund, it ranks last in terms of overall health care ranking which takes in to account health care quality, access, efficiency, equity, and health outcomes.2 These rankings and spending figures are shown for OECD countries in the table below.

The uptake and integration of health technology has the potential to significantly decrease health care expenditures, while increasing the quality of care that all patients can receive. This is not to say that some medical procedures will still not be costly or that patients now are not receiving best in class care, but that these technologies can reduce costs where possible so that hospital and other medical facilities can focus funds, which are often in flux based on political cycles, on the highest attention needs.

The applications of health technology are especially relevant to widespread chronic illnesses such as diabetes and heart disease, which are substantial cost contributors in the United States. Of the $2.4 trillion spent on health care in the U.S. in 2013, costs for the diagnoses and treatment of diabetes reached over $101 billion, and spending for the diagnosis and treatment for heart disease totaled about $88 billion.1 Targeting long-term solutions for these two chronic diseases alone aims to help reduce the strain on private and public health insurers (Medicare and Medicaid) and reduce unnecessary spending across health care facilities.

Using Machine Learning and Big Data to Predict Health Outcomes

Along with diabetes and heart disease, patients with chronic conditions account for the majority of health care expenditures in the U.S. About 86% of health care spending is derived from patients with one or more chronic conditions.2 The United States Agency for Healthcare Research and Quality estimates that applying machine learning analytics, an application within the field of artificial intelligence, to determine alternative treatments or to detect early signs of these ailments could prevent up to 4.4 million hospital admissions, saving the health care system $30.8 billion in costs. Roughly half of those costs are attributed to heart disease and diabetes.

Researchers at Boston University’s Center for Information and Systems Engineering aim to use their health technology to target widespread chronic illnesses to demonstrate how this technology could drastically lower health care costs. Using an advanced algorithm, researchers in the Boston area found that they could predict hospitalizations due to heart disease and diabetes nearly a year in advance with an accuracy of up to 82%. The algorithm was built with patients’ electronic health records (EHRs) that include 200 factors ranging from demographics to previous procedures to lab results.3 The technology plays a dual purpose of providing patients with advanced care while also allowing the hospital to reduce costs by determining whether a patient needs to be admitted to the hospital or whether alternative treatment outside a hospital inpatient setting would better serve their needs.

Predictive medicine using health technology tools is even being used at the national level in the VA-DOE Big Data Science Initiative, a partnership between The Department of Energy (DOE) partnered with the Department of Veterans Affairs (VA). The goal of the program is to analyze “big data” from the VA and other sources to improve health care for Veterans, especially in the areas of suicide prevention, cancer and heart disease. The program is built on the foundation of extensive health records for about 24 million Veterans who have used the VA health system over the last 20 years. Furthermore, the MVP-CHAMPION initiative (Million Veteran Program Computational Health Analytics for Medical Precision to Improve Outcomes Now) will obtain DNA samples and surveys about health, lifestyle and military experiences to help identify patients that are at the highest risk.4

Internet Health Management

Electronic Medical Records

For machine learning to expand and improve diagnostic and care capabilities in health care, electronic health records (which have been a trend in the past twenty years) are being combined with the power of the Internet.  To accommodate this, health care providers across the country are making the move to cloud-based systems for document storage. The move to cloud-based storage has practical implications for the improved day-to-day data management of a hospital, as well as the ability to coordinate between multiple health service providers. UC San Diego Health recently underwent the 8-month process of hooking up 10,000 computers to the cloud system and set the ambitious goal to store all its data in the cloud in three years. This system will also be expanded at two of the nine other UC Health facilities, UC Irvine Health and UC Riverside Health, to help securely share information with affiliated medical practices and allow patients to access the portal to view medical visits and related outcomes at all three sites. This system ultimately aims to alleviate costs associated with increased operating efficiency across the UC Health system.5

It is not just researchers, doctors and health care affiliates that are being given access to electronic medical records for health outcome improvements. Allina Health, based in the Minneapolis region, gave half a million patients access to electronic doctors’ notes and a range of personal health information including physician instructions, prescriptions, and test orders. The portal, called OpenNotes, aims to connect different aspects of the health care sector. While patients may have already booked their appointments online, viewing digital records of the notes doctors scribble on their prescription pad are now available at the touch of a button. By allowing patients to take agency over their own medical records, researchers from the Robert Wood Johnson Foundation concluded that patients had increased recall and understanding of health issues in addition to better communication and collaboration with their doctors.6


Health technology is not just driving changes within hospitals and other medical centers but also helping to disburse the availability of health care in more remote locations of the country by boosting telemedicine and broader telehealth services. These terms are often used interchangeably by varying medical organizations, but here we use the term to generally refer to the broad scope of technology being used by doctors to treat and diagnose patients in their homes, as well as interact with other medical professionals.

This technology is expanding thanks to increased access to technology tools, internet coverage and a demand for lower costs from patients and providers. Additionally, the regulatory environment is partially responsible for an uptake to this technology. Telemedicine services were mandated by some portions of the Affordable Care Act (ACA) and are now endorsed by the American Medical Association (AMA). These factors are helping to make telemedicine as ubiquitous as visiting your primary care physician.

A KPMG report found that nearly one third of health care providers currently use video services for improved patient care, and also intended to further build out their systems in the future.7 

Yet, the ultimate challenge to ensure that these services can reach remote locations at speeds that allow medical professionals to adequately perform their services, is broadband connectivity. 4G capabilities allows Horizon Home Health & Hospice in Idaho to partner with Health Recovery Solutions (HRS) to provide 4G tablets and Bluetooth devices to patients so they can monitor vital signs and answer a series of questions through an online portal.8 But as networks continue to innovate, 5G technology is emerging as the new best-in-class network.

5G wireless networks are now emerging across the country thanks in part to private sector partnerships, but the technology is not yet widespread. The 5G network allows for increased download speeds, ensuring that medical images and information are presented to telehealth professionals in real time.9 Expanding 5G coverage and network strength will allow telemedicine to continue to improve in coverage, accuracy and reach communities that do not have direct access to medical facilities. 10

Patient Security and Blockchain Technology

Health technology tools often require intimate knowledge of a patient’s medical past to produce accurate results. As electronic medical records become the norm, hospitals are moving to ensure that appropriate security measures are in place for this sensitive information.

Today the health care sector uses various platforms like an Electronic Health Records (EHR) system or data warehouse. These data systems typically have different formats and custom back-end codes that can make it difficult to share information across multiple platforms. This is not only a frustration for medical practitioners but also a large security risk that exists for millions of Americans. Technology to alleviate both issues will be absolutely necessary before health technology can become universally accepted.

The technology emerging as a solution to these issues is blockchain, more commonly associated with the digital currency Bitcoin’s operations. Blockchain technology is an advanced data management system that has the ability to standardize, store, and share a patient’s medical information across multiple stakeholders. The security component of this data management system revolves around that idea that any changes to a particular record have to be verified by each party who has access to the data before the change is deemed complete. In the diagram below, if a radiology professional were to enter incorrect information about a patient’s previous diagnoses it would be checked across eight other records and identified as a contradiction to the other versions of the electronic document. Medical information such as prescriptions, diagnoses, and patient visits from every doctor are placed sequentially on a patient’s blockchain as a record of critical medical information.11

While blockchain has been lauded as a superior data management system to other existing systems, rolling out this technology across thousands of locations remains a challenge. And while there is increased security with this recordkeeping system, there are still concerns about how this type of storage would interact with Health Insurance Portability and Account Act (HIPPA) regulations. Once addressed, this technology will turn health information systems upside down by placing ownership and therefore control of information in the hands of the health care consumer.

A visual depiction of the blockchain system,

Regulatory Framework

Security concerns and the mass deployment of technology is not the only challenge to the acceleration of the health technology sector. In order for life-saving health technology to reach the masses, the regulatory framework and public policy embedded in federal statute must keep up with the pace of technology development (or, at the very least, try to).

The Food and Drug Administration (FDA) is developing a program for tech companies to expedite the regulatory process for health-related technologies. The program will allow the companies to gain “pre-certification” on products that meet a pre-established list of criteria aligning it with the requirements of health technologies. Pre-approval of developing products will be based on existing data surrounding currently approved treatments. American mega-companies like Apple and Johnson & Johnson are on an exclusive list of nine companies in the program, alongside international companies like Samsung of South Korea and Roche of Switzerland.1 Currently, Apple is attempting to break into the medical device market by developing a watch that can detect heart abnormalities.2

What do these technology transformations in health care mean for the industry and economic development?

Health Technology presents several opportunities and challenges for economic development in terms of growing and supporting the industry.

Innovation and Entrepreneurs

First, technologies emerging in this field are driven by the ecosystems of innovation and entrepreneurship. Economic development organizations must recognize that creating an environment, both physically and through public policy, that allows entrepreneurs to test ideas will be vital to developing pioneering technologies. This includes establishing an appropriate pipeline for entrepreneurs to take their ideas from inception to startup to acceleration to commercialization. A firm needs to know where to turn for the right resources at the critical pivot points of business development, whether it is capital, physical work space, workforce or partnerships.

Analytics 4 Life (A4L) is a Canadian health technology company that began with 3 individuals in a 100-square foot office space in the small city of Kingston, Ontario, that went on to leverage connections with a national research and development consortium that allowed them access to cloud-computing technology through IBM and skilled workforce through another partnership. Today, the company is testing using artificial intelligence for a non-invasive test to detect evidence of a patient’s predisposition to heart disease.3 Now based out of Toronto and the world-famous Research Triangle Park in North Carolina, the company employs about 30 people.

Infrastructure and Space for Business growth and development

To enable existing companies in this sector to expand, access to adequate space and connectivity resources will be vital. Companies require sufficient broadband capacity to test, operate and market their devices. Additionally, broadband connection will be crucial for the storage and security of health records. While 3G and 4G may allow technologies to operate across some platforms today, as more and more facilities and individuals use this technology, an improved network will be required to handle the volume. Municipalities that incentivize 5G network expansion on a regional level, perhaps through public-private partnerships, will shake out to be the most competitive locations for companies in biosciences and health technology. In rural areas that have typically been challenged with land-based broadband infrastructure deployment, advances and increases in satellite technologies offer promise on the horizon.

In addition to connectivity, firms attempting to innovate need flexible physical space for product and service development, testing, and deployment. For digital technology firms working in health care, this means space with close proximity to and/or partnership with health care services providers. A notable example of this type of partnership is TechSpring in Springfield, Massachusetts. TechSpring was launched in 2014 by Bay State Health System to work with health technology companies to closely develop their products in line with the needs of the health care market. TechSpring provides a range of offerings, including physical space for technology companies, along with other services that allow firms to understand the real-world implications of their technologies and the different utilizations of their tools.  Essentially, TechSpring is “the bridge between technology innovators and health care professionals, making it possible to prove value and bring better solutions to market.”4


The talent needs for health technology companies ranges from those with precise medical backgrounds to those that have advanced computing, data, and analytical skills. Those regions that can help develop and foster these skillsets will be best positioned for growth and investment. To fulfill the talent needs of existing and emerging firms in the field, workforce and economic development professionals should work to:

  • Promote STEM workforce training and development in K-12 schools and public/private educational institutions. 
  • Increase awareness of the multitude of opportunities presented by the health care system.
  • Establish and strengthen sector partnerships to increase awareness and training in industry specific needs like including cloud computing, network administration, coding, machine learning, data science and analytics, telehealth, and cybersecurity.
  • Anticipate the need to retrain some existing health care workers who may require more computer-based skills to accompany their medical skills to remain competitive in the workforce. 



1 “Total Health Expenditure.” IBISWorld. April 2017.

2 E. C. Schneider, D. O. Sarnak, D. Squires, A. Shah, and M. M. Doty. "Mirror, Mirror, 2017: International Comparison Reflects Flaws and opportunities for Better U.S. Health Care." The Commonwealth Fund. July 2017. Web.

3 Ferris, Robert. "Americans Spending More Money Treating Diabetes than Any Other Disease." CNBC. CNBC, 27 Dec. 2016. Web.

4 Multiple Chronic Conditions Chartbook." Agency for Healthcare Research and Quality. Abt Associates, Apr. 2014. Web.

5 Paschalidis, Yannis. "How Machine Learning Is Helping Us Predict Heart Disease and Diabetes." Harvard Business Review. 30 May 2017. Web.

6 Office of Public and Intergovernmental Affairs. "Office of Public and Intergovernmental Affairs." News Releases - Office of Public and Intergovernmental Affairs. 01 Sept. 2016. Web.

7 Why UC San Diego Health Moved Electronic Medical Records to the Cloud." Digital Commerce 360. 17 Aug. 2017. Web.

8 Allina Health Gives 500,000 Patients Access to Electronic Doc Notes." Digital Commerce 360. 10 July 2017. Web.

9 Telemedicine Services To Surge: KPMG Survey." KPMG. N.p., n.d. Web.

10 "Horizon Home Health Brings Comprehensive Telehealth Services to Patient." PRWeb. 07 June 2017. Web.

11 HITInfrastructure. "5G Network Infrastructure Improves Telemedicine, Remote Care." HITInfrastructure. 23 Mar. 2017. Web.

12 Is 5G Security More of the Same for Telemedicine?" Tektonika. N.p., 06 June 2017. Web.

13 HealthITAnalytics. "Is Blockchain the Answer to Healthcare's Big Data Problems?" HealthITAnalytics. 17 July 2017. Web.

14 Fingas, Jon. "Apple, Alphabet and Fitbit Test FDA Fast Track for Health Apps." Engadget. 26 Sept. 2017. Web.

15 FDA Test Speeds up Approval for Apple and Other Tech Companies." CNNMoney. Cable News Network, n.d. Web.

16 A4L Uses Machine Learning to Detect Coronary Artery Disease." InvestinOntario. 11 Aug. 2017. Web.


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