A decade ago, the majority of Americans finally had high-speed broadband internet at home, but the App Store was a new concept and FitBit had yet to release its first fitness tracking device. The Great Recession sent global markets plummeting, and U.S. healthcare reform was a major topic of debate.
Today, more Americans own a smartphone than a laptop or desktop computer, and our watches have collected billions of hours of biometric data. Big tech is placing big bets on digital health, and established health and pharma companies are investing in startup funds and using open innovation to pursue novel partnerships. 2018 is on track to set another record for digital health funding; Rock Health projects $6.9 billion in venture funding this year, up from $602 million in 2009.
As we plan for 2019 and the decade ahead, we checked in with some of digital health’s early thought leaders to discuss what has changed and where the industry is heading.
1. Establishing an ecosystem.
Ten years ago, “health tech” didn’t have the cachet it has now. “We were struggling as entrepreneurs to expand beyond our early adopter networks and convince investors and leaders of legacy healthcare institutions to see our vision for creating the first digital doctors office,” says StartUp Health co-founder Unity Stoakes, who was five years into building his first digital health company in 2009.
“There was no established ecosystem yet, but there was great energy and camaraderie among those who also believed we were in the midst of, and a part of, the creative destruction of healthcare. We knew we were way too early, but we also knew that transformation of the industry was not only possible, but inevitable.”
Today, StartUp Health is at the center of an entire ecosystem that spans industries and continents. “There are also armies of upstart entrepreneurs and innovators creating thousands of new solutions, most of which are still only incrementally nibbling at the edges of what’s truly needed,” Unity says.
With every new disruption comes a period of experimentation. Over the course of the past ten years, we have seen the rise and fall of numerous applications and devices — many targeted at consumers eager to take healthcare into their own hands. But innovation is a long game, and requires investment over time. Solutions that fail to gain traction today can inform tomorrow’s big wins.
“Healthcare is still messy, and there are still big problems to fix. We continue to invest in early stage companies with potential to tackle those problems, adding to our portfolio of over 50 companies,” Rock Health’s Halle Tecco and Bill Evans told us. Perhaps more inspiring is the number of repeat investors. Rock Health, which will host its seventh annual summit next week, reports that “in the early years — eight or more years ago — the vast majority of investors did only one deal in digital health. Currently and in the last two years, well over half of all investors are ‘returning investors’ with one or more prior deals under their belts.”
StartUp Health’s inaugural fund invested in 100 digital health companies; its Healthcare Transformers Fund II has already made multiple investments, including Biome Analytics, CareDox, Cohero Health, Doctor.com, Fit4D, Human Longevity Inc., Jiseki Health, LifeDojo and Zeel.
3. Rewriting the underpinnings.
Catalyst and Health 2.0 co-founder Matthew Holt, who has been at the health tech game longer than most, noted a number of milestones in 2009: “That year saw the passage of Meaningful Use [electronic health records legislation]; a migration of open data champions into the U.S. Department of Health & Human Services, led by Todd Park and Aneesh Chopra; and the first real emergence of cloud-based solutions for doctors and clinicians, as opposed to the earlier ones aimed at consumers.”
It’s this last part, the focus on the underpinnings of health tech, that is starting to bear fruit 10 years later. “By 2019, the split between enterprise technology and cloud-based tech is starting to end,” Matthew says. “Mirroring this change, the Health 2.0 conference was purchased by HIMSS to integrate the legacy enterprise and cloud-based tech communities.”
For Unity Stoakes, “the most inspiring change since 2009 … is how many people are working on health moonshots — true leapfrog innovations — with the potential to radically improve health and wellbeing. We are still in the early innovation cycles, but no longer are the legacy healthcare companies ignoring the rolling thunder of disruption created by so many Health Transformers armed with passion, persistence, and now capital.”
Google, a company known for moonshots, has placed its own big bet on Verily. And in the public sector, the National Institutes of Health and other research centers are using the Precision Medicine Initiative to “understand how a person’s genetics, environment, and lifestyle can help determine the best approach to prevent or treat disease.”
5. Everything is health.
Perhaps the most surprising shift over the past ten years is that everyone is in the health business. “Now we’re in the midst of a global wave of innovation that isn’t just transforming the industry of healthcare, but most importantly focused on improving ‘health.’ There is an arms race to own the future of a multi-trillion dollar industry, where leaders from industries like tech, consumer, and retail are directly competing to claim a stake in an ever expanding global market,” Unity says. StartUp Health’s fund raised $31 million from companies like Novartis, GuideWell, and Otsuka.
Matthew agrees, noting that “the tech giants, who have grown massively in the last decade, are moving toward the in-home health consumer market.” This shift has resulted in unexpected partnerships. Amazon acquired PillPack, Google invested in Oscar Health, and Apple has invested in its own ResearchKit, CareKit, and HealthKit products to open its platform to developers and researchers.
Are you working at the intersection of health and technology? Find us next week at Voice.Health Summit (co-located at Connected Healthcare Conference in Boston), Digital Pharma East in Philadelphia, and the Summit on Ethical Tech in New York. Later this fall, we’ll be at CNS Summit, TEDMED, and AI World Pharma.
Photo by Negative Space on Pexels.