Category: Digital Health

Digital Health Trends to Watch in 2023

Posted on by Jason Barry

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 Tell – DiMe 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 Segmentation – SCAN 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 Consolidation – Centura 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 Rounds – 7wireVentures 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 B2B – Alyssa 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 Engagement – MD 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 Tech – OMERS 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.

Sonde Raises $19M for Voice-Based Screening

Posted on by Jason Barry

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

Posted on by Jason Barry

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.

care.ai Raises $27M for Ambient Monitoring

Posted on by Jason Barry

“Non-clinical workflow” companies continue to lead the pack in terms of digital health funding, and ambient monitoring startup care.ai just added $27M to the segment’s Q4 total following its latest raise.

care.ai’s Smart Care Facility Platform uses ambient sensors spread within care facilities to monitor patients and their caregivers, informing real-time clinical and operational insights.

  • The platform records data such as patient bed exits and falls, while also reducing manual tracking in EHRs by enabling contactless check-ins and screenings.
  • The ambient nature of the solution means that patients aren’t required to wear any RPM device for it to be effective, removing a big source of friction for many virtual nursing or virtual sitting programs.

The fresh funding will help care.ai expand to more hospitals, skilled nursing facilities, and assisted living facilities, building on the 1,500 locations already using its technology.

  • care.ai points to the continued prevalence of staff shortages and burnout as key demand drivers for its solutions, which aims to improve the lives of overworked staff by automating away manual workflows.
  • Other products from GE, ADT Health, or even Amazon’s Alexa fall detection feature compete at least somewhat within the same arena, but care.ai is focused on creating the first truly care site-agnostic solution to the problem of ambient patient monitoring.

The Takeaway
care.ai is setting out to automate away the manual processes causing higher burnout and operational costs for the organizations attempting to deliver optimal care. It’s a tough promise to live up to, but the company’s leadership has done it before. care.ai founder and CEO Chakri Toleti sold his previous patient engagement startup HealthGrid to Allscripts for $60M, and prior to that was putting his motion sensor expertise to work while filming what look to be some pretty epic Bollywood action movies.

The Biggest Company in the World

Posted on by Jason Barry

Venture capital giant Andreessen Horowitz (a16z) got right to the point in a recent blog post that made a huge splash across health tech social media: “We think the biggest company in the world will be a consumer health tech company.”

a16z lays out two paths that could let a healthcare company leapfrog over massive consumer icons like Google, Apple, Facebook, and Amazon to become the world’s most valuable company (Fun fact: the $4T US healthcare market is 5x the size of the global advertising industry).

Path 1 involves creating a vertically integrated “payvidor” that grows to own most care. Picture a company that looks something like if “UnitedHealth Group and Apple had a baby,” with the business model of UHG but the sleek consumer experience of Apple.

  • a16z believes that these companies will need to become big enough to cover most specialties, and also own a health plan that encourages patients to stay within the same care ecosystem (similar to Apple’s tech lineup).
  • Combining both components is essential so that the reimbursement arm can serve as a distribution channel for the care delivery services.

Path 2 centers around building a horizontal marketplace similar to Amazon where healthcare services are aggregated alongside trusted reviews and comparison data. 

  • According to a16z, the key to success for healthcare marketplaces is to serve as an acquisition channel for established players, in addition to being their own acquisition channel.
  • These companies will need to crack the code on how to direct patients to relevant services, while also leveraging the traditional healthcare system for both provider listings and patients.

The Takeaway

Some of the biggest companies in the world are consumer companies that were built in relatively small industries, and the US healthcare market is so big that it can support plenty of success stories with both vertical and horizontal models. That said, packaging something as complicated as healthcare into a consumer experience as simple as Amazon isn’t exactly an easy task, which is why a16z believes that the biggest company in the world will be the one that pulls it off.

HLTH 2022 Recap and Major Announcements

Posted on by Jason Barry

HLTH 2022 is officially a wrap, and we’re sending lots of good energy to the vendors currently breaking down their booths after spending a full week in Vegas.

Hats off to HLTH for putting together a stellar 9,000 person event with awesome attendees, a great speaking track, and the best lunch menu in the industry.

If you weren’t able to make it in person, we’ve got you covered with a roundup of some of the biggest announcements that were showcased in the exhibit hall.

  • 98point6’s new OEM platform tailored for health systems signed Tacoma-based MultiCare Health System as its first partner, licensing the virtual care solution within its hybrid ambulatory care platform, Indigo Health.
  • Awell and Healthie are partnering to enable care organizations to build clinical workflows in Awell’s low-code platform and easily integrate them into Healthie’s API to automate routine clinical tasks and synchronize data between systems.
  • Carenostics joined Bayer G4A’s portfolio of Digital Health Partnerships, providing the AI startup with a €200k convertible loan and coaching from industry experts to help enable earlier clinical intervention through machine learning on EHR data.
  • Google and Epic are partnering to create a new offering that’ll allow Epic hospitals to run their EHR on Google Cloud, with New Jersey-based Hackensack Meridian Health set to be among the first users.
  • General Catalyst tripled its health system partner roster with 10 new logos that it will work with to co-build startups: Banner Health, Cincinnati Children’s, Hackensack Meridian Health, Health First, MetroHealth, OhioHealth, MUSC, UC Davis Health, UC Irvine Health, and Universal Health Services.
  • Health Gorilla was selected by MEDITECH as the technology platform for Traverse Exchange Canada, a new interoperability network designed to enable the seamless flow of health information between participating organizations across Canada.
  • Hello Heart added Dot-to-Dot capabilities to its digital heart health program, leveraging AI to help people draw connections between their lifestyle choices, such as minutes walked or medication adherence, and their heart health.
  • Included Health, the digital health powerhouse formed by the merger of Doctor on Demand and Grand Rounds, launched an All-Included Health hybrid care service to provide primary, specialty, and behavioral care with personalized care teams.
  • Maven Clinic entered the unicorn club with a $90M Series E raise that’ll help the virtual maternity and family health clinic expand its parenting, pediatrics, and menopause platform beyond the 175 countries it already serves.
  • Nomi Health unveiled its Connect fintech platform to power real-time healthcare payments, enabling health plans and third-party administrators to drastically speed up their processes while cutting down on administrative waste.
  • Roche unified its digital health portfolio under the navify brand, providing a range of solutions that help provide evidence about optimizing operational processes and clinical decision making.
  • SonderMind acquired neuroscience company Total Brain to enable patients to better understand their mental state outside of therapy while helping therapists implement measurement-based care techniques.

Welcome to all of our new readers that we met at HLTH, and stay tuned for deeper dives into many of these announcements in next week’s Digital Health Wire.

2022 Digital Health M&A Trends

Posted on by Jason Barry

One of the best reads of last week was Rock Health’s deep dive into the digital health M&A trends that have defined 2022 as the funding bubble lets some air out.

While big ticket acquisitions have taken up most of the spotlight, Rock Health makes the case that declining valuations, customer overwhelm, and an unfriendly IPO market are setting us up for a widespread upswing in M&A activity.

This year’s 144 M&A moves have been shaped in part by supply-side dynamics (harsh fundraising conditions make M&A look more appealing than a down round or shaky IPO), but the report lays out four acquirer archetypes that are likely to drive the next wave.

  • Consolidation for inorganic growth – Lets startups grow their customer base while building confidence from investors looking for growth. This approach is particularly useful as purse strings tighten and customer acquisition costs climb.
  • Enhancing core operations – These acquisitions ideally offset their cost with the internal efficiencies gained in areas such as data integration or analytics. Provider orgs are leaning into this approach, logging 11 transactions Q1-Q3 2022 (3x 2021’s total).
  • Buy-and-build – Acquiring complementary features that enable the acquirer to move along the care delivery value chain or into adjacent categories. Examples include Quest Diagnostics’ acquisition of Pack Health (pushed Quest beyond lab testing into patient engagement / condition management) and Advocate Aurora’s acquisition of MobileHelp (propelled the health system into in-home care).
  • Disruptive innovation – Transforms an acquirer’s existing services and positions them to create a new business model or drastically differentiate in the market (Ex. Amazon acquiring One Medical). Rock Health predicts that the most likely targets will have strong clinical evidence and user bases, but may be struggling with their business model.

The Takeaway

Rock Health makes a pretty convincing argument that digital health M&A is poised for an active year ahead, but also wraps up the report with a warning that acquisition announcements are rarely the end of the story.

“Successful M&A approaches are determined by important choices (e.g. how best to integrate tech stacks as well as cultures and operations, what to keep and where to cut bait, workforce strategy, etc.)… but assessing these frameworks alongside financial, cultural, and operational aspects of M&A is necessary to help organizations—both acquirer and target—maximize impact.”

Headspace Launches Unified Mental Health Platform

Posted on by Jason Barry

Headspace Health just took a massive step forward in delivering on the promise of last year’s $3B merger with Ginger, rolling out a new unified product experience that combines the services of both companies into a comprehensive mental health platform.

The integrated experience brings together Headspace’s meditation and mindfulness offerings with Ginger’s on-demand coaching, therapy, and psychiatry solutions – all within the Headspace app.

The Headspace Health overhaul is set to debut in January 2023, which should be welcome news to the employers and employees that have been calling for more mental health support as the pandemic drags on.

For employees, the new experience provides seamless navigation between Headpace’s wellness content and Ginger’s clinical services.

  • An onboarding survey helps Headspace get to know its members and create personalized care plans, then ongoing check-ins help scale the level of support to individual needs.
  • A sample program might include meditation, a mindfulness walk, and a Sleepcast, with easy escalation to text-based behavioral health coaching or therapy if warranted.

For employers, the single platform approach is designed to eliminate administrative burden, while providing high-level insights for understanding their employees’ mental health needs.

  • Employers can access joint enrollment and engagement trends, such as the percent of members using both Headspace and Ginger simultaneously, as well as aggregate outcomes data for each product.
  • An included Employee Assistance Program bolts on work-life services, critical incident support, workplace training, and manager consultations.

The Takeaway
As we enter the fourth year of the pandemic, most employers are making mental healthcare a top strategic priority, but they’re also trying to avoid cobbling together point solutions to make it happen. The new Headspace Health experience sets out to be the end-to-end solution employers are calling for, although their biggest competitor seems to have gotten the same memo. Headspace will be up against Calm’s new clinical mental health product that was announced last month.

Providers Double Down on Software Investment

Posted on by Jason Barry

A new 2022 Healthcare Provider IT Report from Bain & Company and KLAS Research drew a lot of coverage this week with a headline takeaway that served as a nice break from recent bleak healthcare forecasts:

  • Providers are doubling down on software investments, even in the face of macroeconomic turbulence.

The research includes plenty of interesting data that’s worth checking out if you have half an hour to absorb it all, but here are the highlights for the visual learners with 3 minutes to spare.

  • Over 75% of providers expect to make new software investments next year, and one-third plan to invest more than usual (Figure 1). This signals a turning point in the provider IT market as many orgs who have stayed on the sidelines are now looking to retool software roadmaps for a “new normal.”
  • Of those investing heavily, nearly 80% cite labor shortages, inflation concerns, or restructuring (M&A, change in leadership) as the top catalysts (Figure 2).
  • Providers are particularly interested in revenue cycle management, security, and patient intake solutions as they look to address rising margin pressure and improve the productivity of limited staff (Figure 3).

The other main point that the report drives home is that providers are feeling increasingly overwhelmed by their expanding tech stacks and the proliferation of new vendors.

  • Over half are struggling with the flood of offerings and 24% believe that their existing tech stack keeps them too busy to stay current on new solutions (Figure 4). 
  • As a result, providers are actively trying to streamline their bloated tech stacks, with 72% attempting to expand with existing vendors before considering new ones and 63% looking to cut back on third-party software solutions over the next year (Figure 5).

The Takeaway

The consensus among providers appears to be that falling behind on software investment isn’t the way to turn around struggling performance, and neither is overloading their staff with disjointed products. That seems like a telltale sign that we’re in for more consolidation, especially with the report concluding that software vendors should pursue bolt-on acquisitions and strategic partnerships to create sticky platform offerings in a crowded field.

2022 Trends Shaping the Health Economy

Posted on by Jason Barry

Trilliant Health just released its 2022 Trends Shaping the Health Economy Annual Report, providing a unique perspective on the healthcare market through the lens of supply and demand.

Even though these dynamics don’t play out in healthcare exactly how they would in an “ideal market,” the 147-page report does a good job turning the core principles into a framework for examining 13 different secular trends.   

Perhaps the biggest trend, at least on the demand side, is what looks to be a shrinking total addressable market. The share of Americans with commercial health coverage dropped 0.6 percentage points from 2020 to 2021.

  • On top of this, care forgone during the pandemic appears to be permanently lost rather than delayed. Pandemic-related care is driving the appearance of a rebound, but with COVID treatment and vaccination omitted, healthcare encounters are down 6.2%.
  • The widespread availability of virtual care options hasn’t saved the day either, with Trilliant’s data showing that half of telehealth users in 2021 only used the modality once.

At the same time as demand is contracting, a growing supply of new entrants like CVS, Walmart, and Amazon is making consumer loyalty harder to capture. 

  • Trilliant makes the case that these retailers are commoditizing low-acuity services, leveraging their scale and large customer bases to pressure established players. 
  • This is taking place against a backdrop of burnout among traditional providers, with 9.8% of physicians leaving the field between 2019 and 2022. When accounting for new physicians entering the industry, the U.S. saw a -2% reduction in the physician workforce during the same period.

The Takeaway

If the full report makes one thing clear, it’s that the health economy is quickly turning into a negative-sum game as the number of patients with commercial health coverage decreases and new entrants swarm the field. Even though Trilliant doesn’t set out to give a solution to this problem, its research is a solid tool to help each stakeholder make sure they’re at least asking the right questions.

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