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Beyond Telehealth, Opportunities & Challenges Ahead for Digital Health Startups

By February 25, 2022March 3rd, 2022No Comments

This article was co-authored by TFX Industry Advisory Board Members Anil D’souza, Karl Hightower & Ann Holder.

The consumer healthcare sector has historically been associated with over the counter medications and products found at drugstores, and has more often than not been regarded as uninnovative. The pandemic, however, has made patients more comfortable with online services and digital care. Traditional and highly regulated healthcare systems are being disrupted by companies that can connect with consumers regardless of their location and give them more control over how they access care. With such growth and innovation potential, the digital healthcare sector is uniquely well-suited for disruption from a venture capital perspective. The breadth of this industry goes far beyond online appointments, with healthcare devices and data becoming both increasingly intertwined and critical to treatment. CB Insights estimates that investments in digital-health startups nearly doubled in 2021 to $57 billion and unlisted health-care startups valued at $1 billion have reached a total that is four times greater than five years ago. For insight into the burgeoning and multi-faceted digital healthcare industry, here are what our industry advisors believe are the top trends that will have the most impact in the venture capital world, and which investments are the smartest.

Healthcare Everywhere – Telehealth and telemedicine companies thrived as COVID-19 hindered the ability for doctors at traditional clinics to meet with patients or prescribe medication in person. Access to virtual care has increased with CMS now reimbursing for telemedicine, which has opened the pathway for more innovation in telehealth as there is confidence it will be continued to be reimbursed in the years ahead. The growth of this trend will lead to expansion beyond simply meeting virtually with your doctor or getting a prescription filled digitally. At-home diagnostics will continue to experience rapid growth as patients become increasingly comfortable with virtual care and consultation. There is great value to be found in the ability to provide various levels of care aside from traditional channels of brick and mortar clinics, beyond telehealth, and into remote care devices. With IOT and data assets, providers can deliver advanced services and reliable communication with patients no matter the location. This will continue to prove transformation for improving access to care for those in rural parts of the country and those requiring routine monitoring for chronic conditions.

Delivering Personalized Care – Electronic health records mean more and more patient data is collected. The next push beyond obtaining such data is for healthcare providers and companies to leverage this information to personalize treatment pathways for the individual patient. This can be utilized to enhance a range of different scenarios, from a provider getting to know their patient, to providing custom treatment plans, to personalized medication.

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Ann Holder founded Marani, a TFX portfolio company, for women and their care teams to leverage technology to better understand maternal health and the prenatal journey, provide more readily available access to healthcare and improve outcomes for themselves and unborn babies. “For the growth in this space to have the maximum benefit to patients, it is critical that the FDA supports new, innovative devices and platforms to enable optimal clinical decisions and personalized treatment for patients,” said Holder. With the company already having a deep understanding regarding the importance of technology to personalized care, COVID-19 shifted Marani’s strategy to focus on prioritizing telehealth technology, which resulted in a new software platform for their prenatal and postpartum health monitoring tool. The company is on track to bring the tool and software to market in 2022.

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Devices as Prescriptions –  The Fitbit may have started the trend of users focusing on steps and heart activity, but wearable health devices such as the Apple Watch, applications, and other personally accessible devices will bring forth real-time glucose monitoring and blood analyses in the years to come. “These uses start with diabetics, but the real benefits will be to individual accountability around the impacts of what you eat and how it impacts your mind and body. Expect to see devices being prescribed as part of the doctor – patient relationship,” said Karl Hightower, Chief Data Officer and SVP of Data Products and Services with Novant Health and a TFX Industry Advisor.

Improving Data Standards – In addition to leveraging data, standards for digital health software and data protection rules will prove equally as important for continued innovation in the digital healthcare space and for optimizing treatment for patients. “Big data and algorithms can be utilized to accelerate and enable clinical decision making, and as a result, picking the correct research and development target is of increased importance,” said Anil D’souza, CEO of Tolmar and a TFX Industry Advisor.  We anticipate seeing new standards for quality and safety of new devices, alongside new rules regarding what data can be shared, how, and with whom for investors, consumers, and entrepreneurs alike.

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Mōvī Healthcare, also a TFX portfolio company, was founded to address the critical need in the healthcare industry of costly medical transportation that is often complicated and time consuming for providers. The company has developed a solution that allows organizations to leverage data and to reduce the cost, complication and lack of visibility for transportation. At the core of Mōvī’s values is the belief that healthcare must utilize technology to help solve problems and be able to survive value-based care.

Rapid innovation in the digital healthcare space, specifically data and devices, are dramatically transforming patient care while also positioning them as consumers. Success and continued growth in this sector for companies is no longer just about electronic health records and virtual appointments, it must also incorporate delivery, management and accessibility — for providers and patients alike.

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