Category: Digital Health

HIPAA Gets First Major Update in Over a Decade

Posted on by Jason Barry

It might have taken the biggest data breach in healthcare history to make it happen, but HHS finally announced the first major changes to HIPAA in over a decade.

Big changes need big titles, and the HIPAA Security Rule Notice of Proposed Rulemaking to Strengthen Cybersecurity for Electronic Protected Health Information packs 393 pages of them.

We admittedly only skimmed that for about two minutes before turning to our usual sources for a summary, so here’s an even shorter summary of those summaries.

The proposed HIPAA changes would require provider organizations to:

  • Enhance data security measures, including multi-factor authentication, network segmentation, and encrypting electronic protected health information (ePHI) 
  • Maintain a technology asset inventory and network map illustrating the movement of all ePHI within their information systems 
  • Maintain a detailed risk analysis of each component in the inventory and network map
  • Establish written procedures to restore EHR systems within 72 hours of a cyberattack
  • Conduct HIPAA compliance audits at least once per year

Another key change is the elimination of the distinction between “required” security rules that must be followed and “addressable” rules that providers can choose not to obey.

  • By eliminating that line, HIPAA would make all of the above changes mandatory for all organizations, whether they’re ready to implement them or not.

Even tech savvy providers are still in the business of care delivery, not cybersecurity, and many of them will have to partner with outside companies to ensure compliance.

  • Larger organizations with strong IT teams might already be preparing for these changes, but smaller hospitals with already-slim margins are probably in for a tough transition.

Health data needs to be protected, and our current safety measures obviously aren’t getting it done. On the other hand, there’s also a growing divide between “the best” and “the rest” of U.S. hospitals, so an unfunded mandate with heavy compliance costs runs the risk of making it wider.

The Takeaway

Healthcare has its fair share of acronyms, but HIPAA might just be the most common one in the alphabet soup. It’s important to get these changes right, and that means finding a balance between protecting patients and not overburdening providers. HHS is seeking comments on the rule until March 7.

Rock Health 2024 Overview: David vs Goliath

Posted on by Jason Barry

If last year’s digital health market felt like David vs. Goliath, Rock Health’s full-year funding recap has you covered with the reason why.

Here’s 2024 by the numbers:

  • U.S. digital health funding totaled $10.1B across 497 rounds 
  • Continued downtrend in investment (2023 was $10.8B total, 503 rounds)
  • Shift to early-stage companies drove the dropoff

There’s a tale of two trends unfolding between the early-stage startups and late-stage incumbents battling for market share, and neither side is helping out the funding total.

  • Investors began focusing on early-stage startups throughout 2024, and a whopping 86% of labeled rounds went to Seed, Series A, and Series B startups.
  • Larger companies also started to see smaller checks, with the median Series C and D raise clocking in at $50M and $55M, respectively (down ~10% from 2023). 

The shift to earlier-stage investments was driven by an appetite for startups that can show traction with small/medium sized organizations, especially among increasingly influential mega-VCs like General Catalyst and Andreessen Horowitz.

  • These smaller orgs want gen AI capabilities, aren’t a top target for massive IT players, and can be a goldmine for the startups that can fill that gap.  
  • The mega-VC influence in digital health follows a broader trend, with PitchBook data showing that 50% of all venture capital raised in the U.S. last year went to just nine firms… out of 391 total VCs. GC and a16z happened to rank #1 and #2.

Since it wouldn’t be a 2024 recap without the magic two letters: AI investment reached a fever pitch, and AI-first startups took home 37% of the overall funding.

  • Goliaths in this space include incumbents like Epic, the healthcare divisions of Big Tech players like Microsoft, and younger startups with the warchest to compete like Commure.
  • Rock Health sees a future where the AI Davids can continue thriving by addressing specialized use cases or smaller customer segments, as long as they keep an eye on the roadmaps of their bigger competition to avoid getting stepped on.

The Takeaway

If the healthcare industry wants to keep innovating, it needs companies of all shapes and sizes to make it happen. Rock Health’s 2024 recap is a good reminder that not every startup needs to be a Goliath, and that the Davids are still finding success by right-sizing their operation to the customers they serve.

Crystal Ball Compilation: Digital Health in 2025

Posted on by Jason Barry

Welcome back to the first Digital Health Wire of 2025! The healthcare news cycle might never sleep, but we hope our readers are heading into the new year well rested and ready for big things to come.

The past few weeks have had plenty of fortune tellers predicting what those big things will be, so we’re kicking the year off with a compilation of the clearest crystal balls.

Let’s get right into it.

Second Opinion – There’s about to be a lot of AI capital incineration, Chrissy Farr

  • Favorite Forecast: AI startups will struggle if they don’t acknowledge that to sell into healthcare, you can’t ignore services. Until AI training is ubiquitous, startups will need their own teams to make it happen. Public healthcare “tech” companies have a service-heavy revenue mix for a reason.
  • Big Idea: “We are overdoing it on AI and missing out on opportunities to invest in solid, services businesses that are truly helping patients… These businesses have extremely low valuations and are struggling to raise, relative to their peers in AI that have made zero traction.”

The Surgeon’s Record – 2025 The Year of the Wood Snake, Dr. Ben Schwartz

  • Favorite Forecast: Care delivery innovation pivots from primary care to specialty care. Specialty care is extremely complex, with huge room for improvement from shifting sites of service, building new condition-specific treatment pathways, and aggregating high-quality networks.
  • Big Idea: “The specialty care innovation movement is well underway… Maven Clinic… Oshi Health… Thyme Care… Commons Clinic… The common thread here? Embracing a hybrid specialty care model.”

Out-of-Pocket – Out-Of-Pocket’s 2025 Predictions, Nikhil Krishnan

  • Favorite Forecast: Marketing becomes a mess. Meta is making some major healthcare advertising changes that make it difficult to actually target patients, and Google and LinkedIn could soon follow suit.
  • Big Idea: “AI generated slop is starting to mess up search engine optimization rankings. 50% of people are little content piggies that are fine with the slop though.”

Hospitalogy – 8 Predictions for Healthcare 2025, Blake Madden

  • Favorite Forecast: LLM advancements made back-office AI the talk of 2024, but this year could bring a surge in funding for clinical AI solutions.
  • Big Idea: “The cost and complexity of processing unstructured clinical data, combined with low risk tolerance, have historically limited the adoption of clinical AI products. Fortunately, LLMs excel at more accurately interpreting unstructured / multi-modal data, and the cost of compute is decreasing. This sets the stage for AI to create more value in clinical workflows.”

Forbes – Anti-Predictions For Healthcare In 2025, Seth Joseph

  • Favorite Forecast: Progress on data interoperability will continue, but painfully slowly. Everyone wants interoperability, but regulatory uncertainty and the rapid emergence of new data sources complicates the situation.
  • Big Idea: “The politics of access to healthcare data will continue as if it’s a 6th grade student council election.” – Zus Health CEO Jonathan Bush

NeuroFlow – 2025 Healthcare Forecast, Ellen Harvey

  • Favorite Forecast: Behavioral health will shift from access to impact. By collecting behavioral health data and merging it with physical health data, we’ll start to see which interventions truly reduce unnecessary utilization and improve outcomes. 
  • Big Idea: “The industry is finally shifting from asking ‘Do we have enough providers?’ to ‘Are our programs actually working?’ As healthcare costs continue to skyrocket, both public and private payers will demand proof that their behavioral health investments are paying off.” – NeuroFlow COO Robert Capobianco

The Takeaway

The healthcare industry has plenty of challenges, but it also has some strong tailwinds pushing it toward new solutions. Cheers to everyone making those solutions a reality in the new year.

Rock Health’s Innovation Maturity Curve Heading Into 2025

Posted on by Jason Barry

Rock Health is wrapping up the year in style by updating its Innovation Maturity Curve with the hottest trends of 2024, and sharing its predictions for what lies ahead.

The curve uses three major data categories to plot digital health innovations:

  • Research volume – gauges the potential of a topic through PubMed publications
  • Venture funding – tracks investment as a leading indicator of commercial interest 
  • Partnership activity – uses industry partnerships as a proxy for commercial traction

Here’s how 2023’s biggest trends progressed over the course of the year:

AI in Healthcare (Maturity Score: Developing) – Digital Health Wire readers know the AI hype cycle is still in full swing, with AI-first digital health startups landing $3.3B in venture capital through the end of Q3. AI partnerships also surged (Rock Health counted 80+, an undercount if anything), but 2024’s plateau in research activity gave another sign that we’re transitioning to practical applications and commercialization. 

  • Keep an eye on: We’re entering a phase of AI consolidation, with cutthroat competition for major accounts in segments like ambient documentation. As Big Tech inks their own partnerships and juggernauts like Epic double down on new features, “AI enablement will become table stakes across solutions rather than a core differentiator.”

Digital Obesity Care (Maturity Score: Developing) – Moving up from “Nascent” on last year’s curve, the conversation around obesity care has been transformed by GLP-1s and contributed to a rise in digital platforms to help patients access treatment and support.

  • Keep an eye on: Increased competition necessitates differentiation. With GLP-1 access still in flux, players need to build momentum with more than just prescribing (precision treatment planning, biometric tracking, support for co-occurring conditions like PCOS).

Food as Medicine (Maturity Score: Emerging) – FaM moved from a niche term to a buzzword (props to Rock Health for helping it happen), with category funding doubling on-year after big raises from players like Foodsmart ($200M). Payors, providers, and grocers contributed to over 30 new FaM partnerships this year.

  • Keep an eye on: FaM innovation is closely tied to reimbursement models for food delivery and nutrition consultations, so continued success hinges on sustained policy support. Assuming that happens – seems likely given the Make America Healthy Again chatter – 2025 could be another huge year.

The Takeaway

With the digital health recalibration now (mostly) behind us, Rock Health expects 2025 to give innovators a chance to demonstrate a measurable impact on outcomes and continue their trek along the maturity curve. The whole report is well worth checking out for details on smaller up-and-coming categories like new wearable form factors, digital twins, and climate tech.

CB Insights 2024 Digital Health 50

Posted on by Jason Barry

CB Insights unveiled its annual Digital Health 50 rankings of the most promising private digital health startups, and this year’s list certainly included many of the industry’s brightest stars.

Here’s the methodology / our disclaimer: The final cut was selected from a pool of 10k+ applicants based on “proprietary metrics” – Commercial Maturity and Mosaic Scores – along with data on partnerships, growth stats, and market adoption. (CB Insights is of course happy to share this data with its customers, but promises that being one of them doesn’t land you a spot on the list.)

With that out of the way, here’s a look at the Digital Health 50 (high-res version):

CB Digital Health 50

It’s tough to compare this list to last year’s given the ever-evolving categories and methodology, but CB Insights called out four key themes for the latest cohort:

  • AI is becoming foundational infrastructure: 36 of the 50 companies are building AI products, ranging from operational automation high-flyers like Laguna to specialized healthcare LLMs like Hippocratic AI. No surprises here.
  • Workflow efficiency is a key priority: 19 of the companies are streamlining administrative or clinical tasks, spanning document processing startups (Tennr) to ambient AI heavyweights (Abridge). These players seem like an obvious inclusion, but the same could be said last year when ambient AI was nowhere to be found.
  • Diagnostic innovations dominate: 11 companies comprised this year’s largest category, developing next-gen diagnostics across imaging (Airs Medical), pathology (Proscia), and non-invasive diagnostics (Alimetry). Diagnostics was in a three-way tie with Clinical Intelligence and Virtual Care, although the categories have some hazy boundaries. 
  • More specialized platforms: Virtual and hybrid care representation doubled in this year’s cohort, reflecting the shift from general telemedicine toward condition-specific virtual models in areas like mental health (Talkiatry) and cancer care (Resilience).

The Takeaway

Lists like these never fail to get pushback because of the methodology or glaring exclusions, but this year’s cohort feels pretty well aligned with the high momentum names that keep popping up in our own coverage. Major congrats to the companies that were included.

PHTI Delivers Mixed Review on Digital Hypertension Tools

Posted on by Jason Barry

Digital hypertension management solutions received a mixed report card from the Peterson Health Technology Institute’s latest evaluation, which found significant differences in performance depending on the treatment approach.

The 71-page report assessed clinical and economic evidence across three solution types:

  • Blood Pressure Monitoring – extend hypertension care beyond in-person visits using home monitoring devices that stream data back to providers. Ex. AMC Health, Health Recovery Solutions, VitalSight (Omron)
  • Medication Management – employ dedicated virtual care teams to coordinate medication adjustments as a supplement to the patients’ main primary care team. Ex. Cadence, Ochsner Digital Medicine, Story Health
  • Behavior Change – deliver educational content, alerts, reminders, and virtual interactions with coaches or care teams to improve hypertension self-management. Ex. Dario, Hello Heart, Lark, Omada, Teladoc (Livongo).

PHTI’s signature chart delivers a great summary of the findings:

The analysis found that all approaches across all payor types increase total healthcare spending over a three-year time horizon, because the cost of the solutions exceeds the savings from improved clinical outcomes.

The good news – at least for Medication Management and Behavior Change solutions – was that improvements in blood pressure over a 10-year window reduced patients’ risk of cardiovascular disease and prevented enough deaths to justify the cost.

  • PHTI found that only Medication Management solutions demonstrated significant blood pressure reductions compared to usual care, and recommended that this is the “most pressing area of integration” for most practice settings.
  • BP Monitoring showed “slightly greater, but not clinically meaningful declines,” but failed to breakeven at current RPM reimbursement levels.
  • Behavior Change approaches produced only “limited incremental declines,” which doesn’t support broad adoption for most patients but could still play a role for underserved populations with difficult access to usual care. 

Those findings naturally led to pushback from some of the companies named in the report. 

  • Omada said that the analysis “inadequately groups companies with very different offerings” and “narrowly focuses on select clinical metrics,” while underweighting user experience and patient-reported outcomes. 
  • PHTI responded to the critics by saying that “patients expect that clinically-focused digital solutions are improving their health. We can talk about competing on user experience… but we need to prove that they work.”

The Takeaway

There’s a high bar for digital solutions that need to justify their cost above standard care, and PHTI just raised that bar even higher for hypertension management. Not all approaches are created equal, and while some companies might not agree with PHTI’s findings, reports like these are a maturity milestone for digital health as a whole.

HLTH 2024 Recap and Major Announcements

Posted on by Jason Barry

That’s a wrap on HLTH 2024, and the showfloor was every bit as electric as outside on the Vegas strip.

Over 12k attendees made the trip out to Sin City, and they all had the same two things on their minds: Busta Rhymes and artificial intelligence.

The blind excitement of 2022 and the hallucination trepidation of 2023 gave way to calculated strategies on using AI to deliver results for patients, platforms, and everyone in between.

It was also refreshing to see the good ol’ fashioned innovation happening outside of the Cirque du Chatbots, and we rounded up the biggest announcements from the exhibit hall to help keep them all straight:

  • Artera overhauled its Harmony platform with a string of new features and an AI agent dynamic duo for Staff (translation, predictive text for patient comms, message shortening, EHR-integrated conversation summaries) and Insights (no-show reports and engagement analysis).
  • Blue Shield of California partnered with Salesforce to streamline the prior authorization process by co-developing a tool that’ll allow physicians and patients to receive PA answers in near-real-time during visits. 
  • Caregility is doubling Lee Health’s virtual acute care infrastructure to nearly 1,000 patient rooms by building on its existing fleet of telehealth wall systems and carts with additional APS200 Duo dual-camera devices.
  • CHAI – The Coalition for Health AI – published its draft frameworks for certifying independent Health AI Assurance Labs and standardizing the output of these labs with CHAI Model Cards, which are pretty much a “nutrition label” for AI solutions.
  • CirrusMD is making physician-first, on-demand healthcare available to over 55k for-hire-vehicle drivers in New York State through a new collaboration with The Black Car Fund.
  • Clarify Health joined forces with Prealize Health to help payors and providers anticipate utilization trends and proactively allocate resources. The fresh faces in Clarify’s C-suite also send a pretty clear signal that it sees market consolidation on the horizon and wants in on the M&A action.
  • CopilotIQ merged with Biofourmis to create “the first end-to-end platform” for delivering in-home care from pre-surgery to acute, post-acute, and chronic condition management. Massive news that we’ll be circling back on next week.
  • GE HealthCare launched an AI Innovation Lab to accelerate progress across areas like clinical decision-making, cancer recurrence predictions, and model training for medical imaging.
  • Healthie and Zocdoc are now able to access and update each other’s calendars using all the latest availability and booking information.
  • HealthSnap unveiled its new Principal Care Management program that delivers disease-specific pathways to patients with complex chronic conditions, enabling providers to comply with CMS requirements for PCM through automated eligibility reporting, care coordination, and tailored treatment plans.
  • Luma debuted the next iteration of its Patient Success Platform with the introduction of its LLM-powered Spark solution, which unlocks new capabilities like automated fax processing and “patient-facing omnichannel concierge” (AKA conversational phone chat).
  • Oracle Health debuted an end-to-end payments solution that handles gateway routing, processing, and acquiring under a single agreement, as well as a separate medical claims processing product dubbed Oracle Health Clinical Data Exchange.
  • Solera Health shared key findings from its new report showing that strategically supplementing in-person care with a multi-condition virtual care network could lead to a 2.3%-3.1% reduction in total cost of care. It was great kicking off the show with Solera diving into the details.
  • Spring Health took the lid off its Specialty Care solution that provides rapid access to intensive treatment for acute behavioral needs, addressing the harsh fragmentation within the mental health system by supporting 50+ conditions through a single platform.
  • Suki is bringing its AI documentation capabilities to Zoom’s telehealth platform, marking the startup’s second partnership along the same vein after teaming up with Amwell earlier this year.
  • Upfront is now live on the athenahealth Marketplace, bringing its suite of patient engagement solutions within closer reach of more providers.
  • Withings Health Solutions announced the launch of the BPM Pro 2, the first cellular blood pressure monitor to collect patient-reported outcomes and empower remote care programs to scale. Easily one of the best demos we’ve ever seen.
  • Wolters Kluwer Health showcased the integration of UpToDate within Abridge’s ambient AI platform that allows draft clinical documentation to include direct links to the latest, evidence-based recommendations.

We had a blast catching up with everyone at HLTH, and want to give a warm welcome to all of our new readers we met at the show! Stay tuned for deeper dives into many of these in next week’s Digital Health Wire.

IT Leaders Are Ready For New Solutions

Posted on by Jason Barry

The future’s looking bright for digital health after the Peterson Health Technology Institute’s 2024 State of Digital Health Purchasing Survey found that decision-makers across the industry are ramping up their tech investments.

  • The headlining stat: 97% of employers, 86% of health systems, and 84% of health plans intend to maintain or increase digital health spending in the coming year.

Three quarters of purchasers have already grown their budget for new solutions, motivated primarily by consumer demand (83%) and improved outcomes (62%).

  • Cost advantages were cited as a top investment driver for 60% of health plans and 49% of health systems, versus just 34% of employers.
  • Across all three groups, 43% have acquired enough solutions to address 6+ conditions, and it was interesting to see how their clinical priorities varied.

Purchasers are more hawk-eyed than ever when it comes to their contracts and vetting processes.

  • 59% of contracts have a duration under two years, leaving a short window for solutions to demonstrate clinical improvements and illustrate their value.
  • When comparing vendors, a proven track record was usually the deciding factor, beating out both ROI and ease-of-use for every group.

Looking ahead to next year, value-based care is top of mind, with 100% of employers expressing interest in risk-based contracts for new solutions, as well as 60% of health plans and 50% of health systems. Other top goals include:

  • 72% of health plans are looking to reduce costs and improve member experience
  • 74% of employers are looking to improve productivity
  • 80% of health systems are looking to improve patient experience

The Takeaway

Health plans, employers, and health systems all seem to be embracing the transformative magic of digital health, and this report gave vendors a way stack their decks with data on the unique priorities of each group.

Rock Health Q3 Update: Tapestry Weaving

Posted on by Jason Barry

Rock Health’s Q3 Digital Health Market Update showed that investors have found comfort strolling down a path of “focused funding,” with last quarter’s innovation story shifting from transaction volume to market positioning.

The U.S. digital health sector logged $2.4B in venture funding across 110 rounds in Q3 2024, bringing year-to-date funding to $8.2B. 

  • While Q3’s 110 rounds marked a slowdown from 136 in Q1 and 133 in Q2, average investment size held steady at $22M quarter-over-quarter, indicating that investors are honing their focus while continuing to make sharp plays.
  • The analysis also noted that investments are overlapping with partnerships, with companies keen to support startups they’ve already worked with in crowded spaces like healthcare AI – as seen with NVIDIA and Hippocratic AI.

The real narrative behind last quarter’s activity was what Rock Health referred to as “tapestry weaving,” or digital health players building up their offerings to compete with legacy leaders and market incumbents. The related graphic was easy on the eyes.

  • While Q3 mergers and acquisitions were also low at just 21 moves – versus a quarterly average of 37 last year – companies like Dario and Fabric are using M&A to integrate new capabilities and expand their footprint.
  • Like weaving a tapestry, both Dario’s addition of Twill and Fabric’s acquisition of TeamHealth VirtualCare stitched together different solutions to create a more robust platform and address a broader range of customer needs. 

Tapestry weaving isn’t exactly an easy hobby. It involves integrating different products, teams, and go-to-market strategies that all have a chance of backfiring along the way.

  • Big acquisitions help compete for big contracts, but they can also strain the acquirer’s balance sheet.
  • CVS is an easy example. In the last six years, CVS used $88B to add a major payor, a clinic operator, and a home-care provider to its flagship pharmacies. The entire company is now valued at less than the cost of those three moves ($83B current market cap).

The Takeaway

Although the raw count of digital health investments continues to drop off, activity volume isn’t the same as activity quality. The tapestry weaving trend is a reminder that the “true impact of digital health innovation is shaped in the details,” through its investment structures, targeted partnerships, and post-M&A playbooks.

2024 Trends Shaping the Health Economy

Posted on by Jason Barry

Trilliant Health just released its 2024 Trends Shaping the Health Economy Report, delivering a unique perspective on the healthcare market through the lens of supply and demand.

The fourth edition of the report builds on the core findings from the previous three:

  • 2021: Healthcare is a negative-sum game.
  • 2022: Every part of the health economy will be impacted by reduced yield.
  • 2023: The victors in healthcare’s negative-sum game will be those who deliver value.

This year’s 164 page analysis is organized into eight sections, each examining a significant macro trend and supported by a wide collection of data-driven stories:

  • 1) The healthcare system is disproportionately expensive. Despite spending nearly 2X more on healthcare than peer countries, utilization has remained largely unchanged, while increasing 7% in peer countries since 2000. U.S. outcomes are also far worse. (Page 11 Chart)
  • 2) Health status continues to decline. We’re seeing higher volumes of early onset cancers in patients under age 45 for breast (+6.6%), colon (+10.0%), and kidney (+2.1%) between 2018 and 2023. (Page 22 Chart)
  • 3) Government regulation is failing to produce value. This one’s a mixed bag. Regulating cigarettes decreased usage by 30%, but mandated reporting of quality measures hasn’t yielded enough improvement to offset the cost of reporting. (Page 46 Chart)
  • 4) The value of tech advancements is uncertain. Since 2018, multiple AI CPT codes have been introduced, but utilization remains infrequent and concentrated among cardiac conditions such as coronary artery disease and ECG cardiac dysfunction. (Page 77 Chart)
  • 5) Supply constraints are correlated with inadequate yield. The decrease in practicing physicians from 2019 to 2023 resulted in a -0.9% workforce reduction. Notably, 31.3% of physicians changed practice location over that time period. (Page 89 Chart)
  • 6) Forced consumerism has fostered fragmentation. Over 14% of patients with commercial coverage go out-of-network for behavioral health services, versus just 2% for physical care. (Page 111 Chart)
  • 7) Lower-cost care settings can offer better value. New treatment paradigms often start in the hospital but shift to new settings over time (due to new tools, reimbursement reform). How long will that continue? (Page 125 Chart)
  • 8) Employers are better equipped to demand value. Employers have historically been relatively passive in managing healthcare costs., but new transparency requirements compel them to change that. (Page 148 Chart)

The Takeaway

Trilliant’s report showcases the fact that the inputs of the U.S. healthcare system, as measured by cost, exceed the outputs, as measured by the actual value received by Americans. As Trilliant’s Head of Research Sanjula Jain puts it, “every stakeholder can – and must – deliver more value to their customers.”

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