The healthcare revolution is coming. Digital healthcare tactics are becoming increasingly popular.
With big names like Salesforce investing in customer acquisition in the space, announcing last week the signing of Mount Sinai and Amazon’s Alexa partnering with Web MD to bring medical answers to your Amazon devices; the future of healthcare is digital.
Unlike many other areas of the healthcare industry, digital healthcare is getting a boost from Trump’s Administration.
“With growing expectations for targeted experiences through new and emerging sales channels, we can expect the health insurance industry to continue to undergo a digital transformation like what we observed in the banking, airline, and travel markets.” Eugene Sayan, CEO and president of Softheon.
How is Trump pushing the Digital Healthcare Agenda?
The on-demand patient will rule
Despite the repeal of the Affordable Care Act, the mandate to make health care more customer-focused or customer-available remains.
The rise of the on-demand patient had put them in the driver’s seat and put to the forefront of discussion the idea of healthcare consumerism. This is not surprising. If you’re asking the patient to pay more than answering their demand for better experience becomes a necessity.
Healthcare consumerism is difficult as pricing data is hard to access. It’s almost impossible for the consumer to judge the quality of providers and often buyers have a poor bargaining position.
Healthcare has changed from being concerned with the needs of the provider, to focusing on consumer convenience. Increasingly patient want faster service, that is delivered in real-time to the right place.
The onus is on health systems to adapt quickly and ensure that they have digital tools like Telemedicine infrastructure in place to answer the demand.
Drug pricing and cost cutting
The 2016 presidential race shone a light on drug pricing and the policies implemented by pharma companies. Both Clinton and Trump promised to shake up the pricing regulation, aiming to bring down the price of drugs.
Digital healthcare offers the greatest opportunity to lower drug costs. Not only does this technology drive down cost, it also improves the patient experience.
“While the fate of the ACA is still unclear, it is safe to assume that the Administration will look at ways to drive down healthcare costs for employers,”Bill Wright, director, government affairs and senior policy counsel, Symantec.“If done right, digital healthcare solutions do just that: cut costs and improve patient care. Privacy is always a concern with digital healthcare, so data security will have to be an essential part of any effort.”
Medicaid and Medicare
Changed to Medicaid will open the door to more digital healthcare opportunities. As the off-loading of Medicare continues and alternative payment models arise, inevitably it will lead to a greater role for digital health.
In theory, this move will give patients more scope to choose. This could be one giant leap forward for healthcare consumerism. It could lead to a more informed patient and open up healthy competition within the space.
Tax credits form a crucial part of Trump Care. Reform is likely to lead to greater risk from digital health investors, leading to increased investment in the space.
The market of medical devices has traditionally been influenced by physician preference in regards to big ticket items such as artificial joints or pacemakers. Over the past decade, this has begun to shift towards digital devices. Venture capital investment is an early indicator of shifts in any industry.
Despite the presidential transfer of power creating an atmosphere of uncertainty, in particular over the future of the Affordable Care Act, 2016 has been hailed a ‘breakout year’ for digital healthcare funding, with $8 billion invested in more than 500 startups according to StartUp Health. Mobile technology was the big winner with $3.1 billion dollars funding 437 deals.
“Top-funded areas in 2016 included mobile apps at $1.3 billion, wearable sensors with $592 million, data analytics at $574 million, telemedicine with $528 million, mobile healthcare infrastructure and services at $228 million and wellness with $218 million.“ – Internet Health Management
Overall, 2016 was a great year for digital healthcare investment, with a total of 1,115 investors participating in funding rounds in healthcare IT. Top investors include Khosla Ventures, GE Ventures, and BlueCross BlueShield Ventures. Among health, IT investors were over 100 newcomers, including Amazon Alexa Fund and Amgen Venture. Amazon’s fund providers up to $100 million is venture capital funding across a variety of industries. The fund invested in infant activity tracker Owlet Baby Care, a clear indicator of its potential to expand outside of just infant tracking. The so-called ‘Smart Sock’ measures temperature, heart rate and the amount of sleep. Amgen Ventures entered the Health IT market in a big way in 2016, investing in Akili Interactive Labs, alongside Merck Ventures. Akili has developed a unique platform that uses video games to detect early stage cognitive decline. This could be vital for diseases such as Alzheimer’s, where early diagnosis and treatment is key.
2016 also saw the emergence of philanthropic movements like the Chan-Zuckerberg initiative entering the digital healthcare arena. In January, the initiative announced its move to acquire Meta, an AI, and machine learning platform. Meta looked to bring AI and machine learning into the medical world, with a focus on oncology. IBM Watson is another big name that made waves in 2016 with its work in oncology. Using cognitive computing, IBM is looking to ignite digital transformation in healthcare.
There was also 4 digital healthcare IPOs in 2016 of a $234 million value: Nanthealth, Tabula Rasa Healthcare, Oneview Healthcare and Senseonics. PointClickCare announced yesterday that they are considering IPO following the raising of $85 million in new funding. Their cloud-based EHR is designed for senior care, which considering that the baby boomers are approaching retirement, there is huge potential for this platform over the coming year. In 2016, the company’s revenues exceed $160 million – 28% growth year-on-year. This is an IPO to watch for in 2017.
Healthcare incubators are also on the up! These companies are supporting entrepreneurs and aiding startups in the fight for funding and investment. Blueprint Health, for example, based here in New York invested $20k annually in health IT, providing not only funding but also mentorship.
Investors predict that funding in this area will remain strong into 2017. Hot areas to watch include data analytics, telemedicine, connected fitness, patient engagement and behavioral health.
“The genie’s out of the bottle and regardless of what happens with health reform, there’s a wave of activity and a wave of investment into companies that are focusing on those solutions.” Unity Stoakes, StartUp Health.
The excitement around digital health is not limited to the United States. In 2016, China recorded $1.1 billion of investment in the first half of the year alone!
“The administration’s bend toward a competitive market in which providers will compete based on value. A key element will be applications of digital health that improve the efficiency and reach of their population health programs.”