Health Tech – Where is it headed?
December 18, 2018
2018 was a great year for health tech startups. According to Rock Health, venture capitalists invested in over 290 companies, giving a total of 6.8 billion dollars toward all aspects of health care. These companies cover disease management, women’s health, mental health, telemedicine, genetic testing, substance use, benefits management, nutrition, medical records, geriatric care, and more. In October, Rock Health’s summit in San Francisco brought in keynote speakers such as the CEOs of Kaiser Permanente, 23andMe, Oscar Health, the Cleveland Clinic, and Collective Health to address hopes for the future and concerns about AI and data security for a crowd of 600 health tech enthusiasts, entrepreneurs, and investors.
What sectors were the most popular for investors this year? On demand services that bring medicine or doctors to your fingertips scored the biggest share of the funding in 2018. Second were fitness and wellness solutions, followed by clinical diagnosis tools such as Butterfly Network’s smartphone-enabled ultrasound device. Investors poured in around 900 million dollars in health education and information, indicative of the continued rise of consumerism in health care and the growing interest in personal health solutions. Cigna and GSK represent the most prominent health-sector investors. Silicon Valley tech companies like Amazon and Apple also acquired, invested in, or competed with other startups in the market.
While these big hitters demonstrate the growing value of the health tech world, the year has not been without challenges. Google’s Verily shut down their glucose-monitoring contact project; Driver, a startup matching patients with clinical trials, only lasted two months after launching. 2018 can be remembered as the year Theranos formally closed after years of legal battles. Meanwhile, Lantern and Chorus, both fitness apps, shut doors. The finish line is a constantly moving target for any new entrant or point solution- any new rollout requires a big investment toward the communications and operational strategy to be successful. CPR is here to support employer-purchaser efforts in collectively pushing for, and making the most out of, high-value solutions. Our Collaborative workgroups help set clear expectations for what purchasers would like to see from health plans and independent, third-party vendors moving forward.
The startup world is constantly growing, adapting to new regulations, finding fresh niche markets, consolidating, failing, and starting anew. We all hope that health tech startups can help make health care more navigable, interconnected, efficient and cost effective, and most importantly, drive better health outcomes for patients. 2019- we’re ready for whatever is in store!