2 days Ago By jfinison
LAS VEGAS - At HIMSS Global Health Conference & Exhibition , Megan Zweig, president and CEO of Rock Health Advisory; Gaye Bok, partner of AI and digital innovation fund at Mass General Brigham and Dan Gannon, senior director of digital solutions for iRhythm Technologies , discussed venture funding of digital health startup companies and interoperability and integration. The group engaged in a panel discussion entitled, "Interoperability: Fueling Digital Health Innovation with Data," moderated by Alex McLeod, head of commercial innovation at InterSystems . Investment in digital health startups declined slightly but activity seems to be heading in the right direction, according to Zweig.
For more than a decade, Rock Health has been tracking venture funding flowing into U.S.-based digital health startups.
"Every quarter we are putting out our analysis of where we see those funds flowing, who is making the investment, who are the startups that are getting capital and what do we see as the broad market trends," said Zweig. In the past year, the company saw a bit of a decline relative to what they saw during peak pandemic investment dollars. Over $28.
4 billion was invested in 2021. "Last year, we saw about ten billion invested into that space. I think what's interesting though, is if you compare that number to what we saw in 2019, so pre-pandemic, if you look at it from an inflation adjusted perspective, it's actually about the same," said Zweig.
Zweig added that the market is returning to pre-pandemic norms, but there's a couple of key differences, including an increased concentration of capital among mega funds that have at least $500 million under management. Much of the investment is flowing into companies that are AI-powered and that number is going to continue to grow, Zweig said. "AI truly is transforming the things that you all know-clinical workflow, non-clinical workflow, diagnosis of disease, treatment of disease.
Those are kind of the value propositions, the categories of companies that are getting a lot of funding and you also see a lot of investment into particular therapeutic areas," Zweig said. "We definitely saw a rise last year in investment solutions that are focused on weight care and weight loss /given the rise of GLP-1's. We continue to see a lot of investment in mental health, especially as those services are increasingly integrated into chronic condition management physical care services.
" From a large health system perspective, Bok said, "I think that what I know now that maybe I didn't fully have as strong an understanding of is really you have to go after a pain point or a problem that is a top priority for a health system." "Then you sort of fast forward after a couple of years and the health system starts to understand that it has over 3,000 applications that it has to maintain." Bok noted that it is unsustainable from an enterprise perspective, particularly when companies are faced with increasing inflation and costs.
She pointed out that at Mass General Brigham and other large health systems there is a real shift to having an enterprise-wide architecture strategy and blueprint and then rationing the resources available for integration. "It's very complex in terms of trying to sell into a health system, for sure. There's a scarcity of integration resources across every health system that I'm aware of.
So, when you're designing a solution, it's really important to have a pretty light integration lift," Bok said. A relatively young company may succeed at getting a contract, and then another 12 months will go by before the company is integrated into the health system, sometimes because the company is in the queue for integration resources. "If you're an investor or if you're a young company, that means you're going to have a contract on your books, but you're not going to be realizing cash and revenue for probably another 12 months," Bok said.
"It behooves both sides to try and think ahead as to how companies and health systems are going to really reduce the integration lift.".
