Digital Health

Digital Health Trends to Watch in 2023

2023 Digital Health Wire

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.

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