A number of new trends are emerging against the backdrop of the Affordable Care Act (ACA)–mandated health insurance exchanges being rolled out. One is the creation of new businesses based on digital technologies that allow individuals to manage and improve their own health, and gives service providers the ability to deliver increased quality and efficiency at lower costs. These companies span from PracticeFusion (EHR), which addresses efficiency of
Digital health as an industry sector is not new; there has always been IT investment throughout the healthcare industry, and as in any business, healthcare’s administrative aspects have been serviced with increasing levels of
Statistics on the size of this industry are inevitably slanted depending on the perspective. But however you look at it, this new industry is large and growing quickly. Rock Health, a digital health incubator, estimates that the sector saw $1.4 billion in venture capital investment in 2012, up 46 percent over 2011. Investment at that level would represent about 5 percent of total venture capital investments in 2012—a significant number.
Growth areas in digital health include:
- EHR, the digitization of health information
- Access to information and remote monitoring of patients via smart phones and other mobile devices
- Big Data: analytics and mining all that information
- Efficiency and administration: improving operations, lowering the cost of delivery and increasing quality
- Hardware sensors and wearable devices that enable wellness and improved monitoring and personal health. (Is Apple’s “one more thing” going to be a smart watch loaded with body sensors?)
From a practical point of view for finance professionals, digital health companies will often have a complex combination of hardware, software and services in their products—but that is not unusual for technology companies. Digital health companies will not pose the unique
We will wait and see how digital health as a sector unfolds. Undoubtedly, we will see failures as in any emerging sector opportunity, and we will see technology thrown at needs that don’t exist. But the macro trends are too large for digital health to not become an important part of the evolution of healthcare and the startup economy.