#4 What South Korean Innovators Should Know to Develop in Order to Bring Their Products to the U.S. Health Market

The U.S. healthcare sector is the largest, most expensive, and most complex in the world. The annual spending per capita is the highest in the world—between healthcare and long-term care combined, it amounts to almost $4 trillion.

Why is it so expensive? The U.S. healthcare sector is run by a private sector and is very profitable. It brings an average of 9.64% net profit (#8 in the U.S. economy), 45.6% GM (#4 in the U.S.), with the highest remarkable profit in the U.S. economy going to HealthTech: 21.6%.

Changes in U.S. Healthcare Sector

Healthcare in the U.S. is shifting towards quick, convenient, close-to-consumer provider types with low and transparent prices like retail clinics, workplace clinics, urgent care, and ambulatory surgical centers. All these new areas grow very fast at 6% to 26% annually. Some other areas are in decline, for example, rural and remote care centers are closing (about 100 closed since 2010, 700 are vulnerable to closure).

What is growing so fast and why? The expected answer is – follow the money.

The trends responsible for this shift are the same everywhere – a rapidly aging population that lives longer and needs more care, as they are sicker, resulting from bad prevention methods and lifestyle choices.

The catalyst to the market shift came through the U.S. regulations that changed service reimbursement rules from fee-per-service to the outcome-based model. If in the past, care providers were paid more for doing more procedures.  Now they are paid more for a healthier patient.

What are the key opportunities for Korean companies?

We observe a shift from large to small, home-based and mobile provider capabilities. Nursing homes can not accommodate all aging citizens. This stimulates the growth of retail clinics, self-care at home, and tools for traveling nurses to serve this population in need. The tools used by these types of providers need to be smaller, yet display high-quality in operation and user-friendliness. An increasingly lower level of workforce qualification requires easy-to-operate tools that prevent users from making errors, assist in decision-making, and use advanced analytics for more value addition.

There is major growth in wellness and fitness products and remote care (especially in rural areas), requiring novelty products and operations to monitor, coach, and keep people from getting sick.

South Korea has the #1 health system in the world and is home to many high-quality product makers. Korean companies are known for their outstanding hardware and robotics, while U.S. or EU companies make better software and interfaces. We recommend that Korean manufacturers collaborate with overseas partners on developing best-in-class digital solutions using their unique know-how.

When going to the U.S. market, make sure you bring a product developed based on the U.S. buyer’s tastes and expectations, with the best strategy to partner with local innovators like CVSHealth or Walmart to insert your product into a complete, more marketable solution.

If your offering increases doctor office productivity or improves patient experiences or outcomes, you are ready to explore the U.S. landscape for potential market entry, with the assistance of an experienced local agency familiar with the market for faster traction and loss mitigation.