Digital Health Trends to Watch in 2023

Happy holidays, and welcome to the last Digital Health Wire of 2022! For our final issue of the year, we’re polishing off our crystal ball (crowdsourcing predictions from digital health leaders) to bring you some of the top trends likely to make a big impact in 2023.

Without further ado…

  • Show, Don’t TellDiMe CEO Jennifer Goldsack – Digital health innovators with practical solutions for real problems have enormous potential to thrive in the coming year, but only if they have clinical evidence to demonstrate their value. Even better, full-stack digital solution providers will identify pathways to reimbursement that don’t involve throwing themselves at the feet of healthcare systems and carving away at their margins.
  • Deeper Patient SegmentationSCAN Health Plan CEO Sachin Jain – The idea that all patients should receive the same clinical model is being fundamentally questioned, and more companies will look at further segmenting their offerings to differentially serve diverse populations. See: Clever Care (MA startup with Asian-focused benefit offerings), Included Health (Affirm product focused on LGBTQ+ population), and Zocalo Health (clinical care “by Latinos for Latinos”).
  • More ConsolidationCentura Health CEO Peter Banko – Traditional health care competition will intensify as consolidation continues and new entrants bring disruptive value propositions. Private equity firms’ $700B+ in dry powder is set to surge even higher in 2022, and national health plans are deploying their pandemic-driven financial gains to fuel consolidation and diversification.
  • Quality Funding Rounds7wireVentures Partner Alyssa Jaffee – With fewer IPOs for exits, many high quality startups will return to the private markets for another funding round. Fewer investors are running around with loose capital, making it likely that investment decision cycles will take longer but have more discipline. For context, there were 23 public digital health market exits in 2021, vs. 7 in 2022.
  • D2C Pivot to B2BAlyssa Jaffee again since her Twitter thread was best-in-class – As inflation continues pressuring the global economy, half of consumers can’t cover a $1K medical expense within 30 days. As consumer purse strings tighten, we could see an increasing number of D2C companies pivot to B2B models to survive.
  • AI-Driven EngagementMD Anderson Cancer Center CIO Rebecca Kaul – AI will start to enable omni-modal communications that are personalized, predictive, and empathetic to the patient. Communications platforms will need to be able to seamlessly connect patients to integrated end-to-end solutions, and more sentiment analysis is needed to build emotional intelligence into digital tools.
  • Mission Critical TechOMERS Ventures Principal Christina Farr – Hospitals are bleeding revenue, so 2023 will be about “must have” vs.“nice to have.” What’ll do well is anything mission critical (addressing labor shortages, burnout, revenue cycle). Companies that can be wiped out by Epic’s next feature update will be in a tough spot.

The Takeaway

It’s tough to predict which of these trends will become the top story of 2023, but it’s pretty safe to say that we’re in for another action-packed year for digital health. While the record shattering funding days of 2021 are behind us, we still have overworked providers, rising healthcare costs, and patients in need of innovative solutions. Cheers to making those solutions a reality in the new year.

Telehealth Startups Sharing Patient Data

An absolute firework show of a joint report between STAT and The Markup cast a spotlight on telehealth companies sharing sensitive patient information with advertisers, and it definitely wasn’t a good look for some of the biggest names in the space. 

Over the past few months, STAT and The Markup created accounts and completed onboarding forms on 50 telehealth sites (most major players, notably excluding Teladoc/BetterHelp), then tracked what data was being shared with advertisers such as Google, Facebook, and TikTok.

Of the 50 telehealth websites analyzed, advertisers received information from:

  • URLs users visited – 49 sites
  • Personal info (name, email, phone) – 35 sites
  • When user initiated checkout – 19 sites
  • User’s answers to questionnaires – 13 sites
  • When user added to cart – 11 sites
  • When user created an account – 9 sites

Yikes. One of the stats that stands out the most is the fact that 13 of the websites shared patients’ answers to medical intake questions, such as their migraine frequency or substance use history. All but one of the sites shared the URLs that users visited – gold star for Amazon Clinic – but most of the websites shared information with multiple advertisers. 

Here’s how many of the sites shared data with each advertiser:

  • Google – 47 sites
  • Facebook – 44 sites 
  • TikTok – 23 sites
  • Snapchat – 15 sites
  • LinkedIn – 9 sites
  • Twitter – 7 sites

You can find the full list of telehealth platforms and the information they shared roughly a third of the way down the report, and the authors were even kind enough to provide a cringe worthy round up of each company’s response

The Takeaway

Telehealth companies often act as middlemen between the patients and providers covered under HIPAA, rather than delivering care themselves, which results in limited protections for the sensitive information they collect.

Most patients probably assume that their health data is always protected, and many of them turn to online solutions for more privacy in the first place. The end of STAT and The Markup’s report included thousands of words from privacy experts and regulators, nearly all of them agreeing that protections like HIPAA need to be reformed for the telehealth era.

Only protecting sensitive information in certain settings is clearly starting to feel out of step with the times, especially when advertisers have the answers to your health intake forms.

Sonde Raises $19M for Voice-Based Screening

Sonde Health puts a few unique spins on the hard problem of early disease detection, but its core tech is built around doing one thing extremely well: flagging patients at risk for health conditions using short voice clips.

Now, after landing a string of new partnerships and $19.25M in Series B funding, Sonde is turning its sights to global expansion.

Sonde’s AI-enabled platform analyzes vocal biomarkers like smoothness, pitch, and clarity to gain insight into a patient’s mental state. It also measures breath cadence and vocal capacity to gauge their respiratory health.

  • This data isn’t positioned as a standalone solution for diagnosing medical conditions, but as a way to improve the clinical workflows of physicians / therapists, the patient stratification of RPM programs, and the value of call center audio.
  • Sonde’s platform can be embedded directly onto device chipsets for passive health monitoring, a feature that’s already being explored within Qualcomm’s smartphone chips and GN Group’s hearing products.
  • This technology also produces a treasure trove of every healthcare startup’s favorite asset – data. Sonde claims to have the largest and most diverse health-labeled voice dataset, with over 1.2M voice clips from 85k users across four continents.

The latest funding will help Sonde expand into Asia, where it’s reportedly seen high demand for its existing solutions, and support the addition of more health conditions to its platform.

  • A validation study of Sonde’s mental health tools is underway at McMaster University, and research on new focus areas is in development at Cambridge University (cystic fibrosis) and the Albert Einstein College of Medicine (dementia).
  • A partnership with Korean telecom giant KT corporation should also streamline the international expansion by bringing Sonde into its call centers and telehealth solutions.

The Takeaway

Although voice-tech is a relatively new healthcare arena, the prospect of passively diagnosing conditions has attracted plenty of competition from startups like Kintsugi ($20M Series A in March) and Eleos ($20M Series A in April), and it’s definitely on the radar of larger players like Microsoft (Nuance) and Amazon (Alexa).

As these companies begin to refine the AI models supporting voice diagnosis, access to proprietary data sets for training the algorithms will become increasingly important for gaining an edge, and Sonde’s funding announcement makes it clear that it plans on turning its dataset into its biggest competitive advantage as quickly as possible.

CB Insights Digital Health 150 Report 2022

CB Insights released its annual Digital Health 150 rankings of the most promising private digital health startups, and it was interesting to see how dramatically the landscape evolved over the past year.

Methodology (maybe more of a Disclaimer): The startups that made the final cut were selected from a pool of 13k applicants based on “proprietary Mosaic scores,” company business models, funding, investor profiles, competitive positioning, tech novelty, and plenty of other metrics. Getting your company to purchase CB Insights’ data products wasn’t listed as one of them, although it probably wouldn’t hurt your chances.

With that out of the way, let’s dive into some of the biggest trends that emerged in the Digital Health 150 pictured above (here’s a high-res version).

  • Early-stage innovation: This year’s Digital Health 150 included a huge share of high flying up-and-comers, with nearly half of the list at Series A or earlier in their growth. These players included Equum Medical (acute care telehealth), Vori Health (hybrid MSK treatment), Playback Health (mixed media patient-provider communications), and Homeward (rural healthcare provider).
  • Diagnostics focus: The screening, monitoring, & diagnostics category led with 29 startups (25%), including Babyscripts (virtual maternity care), Ixlayer (precision health testing), and Enlitic (medical imaging AI). That category was followed by interoperability & data (12%), virtual care (11%), and patient engagement (11%). These categories clearly have a ton of momentum, but growing success leads to growing saturation.
  • Mental health momentum: Although the treatment indications took some time to sort out manually, we counted 24 startups building mental health solutions, a big step up from the 10 that were included last year. It would have been more surprising if it were any other area.
  • Few repeat showings: Around 90% of this year’s cohort wasn’t on last year’s list, which was apparently due to record M&A activity and public exits in 2021. Repeat showings included names that are tough to argue with like Xealth, Redox, and Maven Clinic.
  • Top investors: General Catalyst was the most active investor in this year’s cohort, backing 13 of the companies since 2017 (Ex. Equip, Casana, SWORD Health). Insight Partners was a close second (10), followed by 7wire (6), and Plug and Play (6).

The Takeaway

Lists like these usually get some pushback because of the methodology or glaring company exclusions, but this year’s Digital Health 150 cohort feels pretty well aligned with the high momentum names that keep popping up in our own coverage. For what it’s worth, here were some of social media’s most commonly mentioned exclusions: Ada Health, Awell, Cityblock, Innovaccer, Memora, Ribbon, Turquoise, TytoCare, and Zus.

UpStream Lands $140M for VBC Services

Many VCs appear to be done waiting on the sidelines, with VBC tech startup UpStream Healthcare adding to the recent string of digital health mega-rounds with an eye-popping $140M Series B raise.

UpStream provides primary care physicians operating under full-risk, value-based arrangements with a suite of solutions designed to help manage complex populations such as seniors on Medicare. 

  • To accomplish this, UpStream deploys pharmacist-led care teams into partner practices with the aim of improving patient outcomes (and generating shared savings) through careful prescription management.
  • Upstream also equips PCPs with a tech platform built on top of Innovaccer’s unified patient record to enable custom chronic care workflows that predict health risks and provide clinically contextual patient engagement sequences.
  • Providers get the benefit of offloading most of the administrative burden that comes with transitioning to VBC, as well as proactive compensation for delivering quality care through Upstream’s GAP-Q program.

The Series B raise will be used to help UpStream expand to 20 states over the next three years, with the goal of becoming profitable in each market within 24 months.

  • UpStream currently has over 2,900 physicians contracted for 2023 across Community Care Physician Network in North Carolina, Tidewater Medical Group in Virginia, Primary Care Associates in South Carolina, and MUSC Health Alliance.
  • Like most companies operating in this space, UpStream views provider burnout as one of its key adoption drivers, and it’ll be focused on bringing its solution to independent physicians, large health systems, and everyone in between.

The Takeaway
As more PCPs continue moving towards value-based care models, companies like Agilon, Privia, Tebra, and UpStream have each begun competing with their own unique flavor of resources to help enable the transition. UpStream’s pharmacist-centric approach seems like a solid way to help PCPs manage risk without adding more work to their plates, but the VBC-enablement landscape has plenty of competition and each strategy’s individual results will ultimately be what decides the victors.

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