Digital Health Continues to Transform Healthcare

Digital health is an emerging sector of the healthcare industry, not only contributing  to the opportunity for people to better manage their own health, but also to improve the quality of care through mobile connectivity. With the integration of data and the possibility of remote access to care, health outcomes in patient care can be greatly improved.

The emergent nature of the digital health industry can be easily measured by tracking private sector investment. In 2013, total funding of these products and services was $2 billion dollars. In 2014 investment doubled with total funding at $4.3 billion, then slightly increased to $4.5 billion in 2015. The industry seems to be on the same track in 2016 with first quarter investment at $981.3 million.

Product trends in first quarter investment are: accessing health information and tracking data points to provide day-to-day monitoring of individuals health indicators. Of these, data collection is the most popular due to improved biosensors and the prolific use of smartphones.

Investment trends are also showing that fitness brands are getting more involved in the consumer sport and health experience. Asics recently acquired Runkeeper, a service designed to help runners track progress in reaching their fitness goals, and One Medical Group purchased start-up digital health company Rise. Rise will continue to add to One Medical’s mobile health offerings, and increase value to patients though telemedicine services and access to nutritionists. In turn, Rise will have a chance to show their interface to more users as they break into a competitive field of digital health services.

High-dollar investment has also contributed to 2016’s growth. Flatiron Health, a platform for cancer care providers, has invested $175 million in new technologies. Jawbone, which develops and sells wearables that provide personalized insights into how users sleep, move and eat, has put forward $165 million, and HealthLine, another product that will help people track health indicators, has contributed $95 million.

In addition, Health Catalyst, a healthcare data provider, invested $70 million, and Higi, which provides kiosks that screen for a user’s blood pressure, weight, pulse, and body mass index (BMI), has invested $40M.

According to data from Rock Health, this year’s top six highest invested products were:

  • Wearables and Biosensing
  • Big Data Analytics
  • Population Health Management
  • Consumer Health Information
  • Healthcare Consumer Engagement
  • Electronic Health Records Clinical Workflow Products

2016 Rock Health 1st Qtr

These six categories accounted for over 77 percent of what private investors see future value in 2016.

In comparison, only wearables and healthcare consumer engagement remained in the top six from 2015.

  • Healthcare Consumer Engagement
  • Wearables and Biosensing
  • Personal Health Tools and Tracking
  • Payer Administration
  • Telemedicine
  • Care Coordination

2015 Rock Health 1st Qtr

In 2014, the top six invested products were:

  • Big Data Analytics
  • Healthcare Consumer Engagement
  • Digital Medical Devices
  • Telemedicine
  • Personalized Medicine
  • Population Health Management

2014 Rock Health 1st Qtr

A record year for industry consolidation, 2015 has also brought forward 187 deals and $6 billion in disclosed funding activity. Digital health companies are clearly seeking a growth strategy through acquisition that account for seven percent of the total venture funding compared to medical devices, biotechnology and software.

Two hundred sixty-seven digital health companies raised more than $2 million dollars each, and investors that had the most activity in 2014 stayed active in 2015, with 51 firms closing three or more deals. There were also five companies in 2015 that went public, with two companies making trades above their initial public offering price; Fitbit experienced the greatest level of growth.

Through an improved and more efficient use of technology, digital health products have the capacity to help individuals be more engaged in monitoring their personal health. Such innovation will hopefully enable better communication, so patients can help both themselves and doctors improve the healthcare they receive. After the record first quarter profit of 2016, there is great opportunity for the digital health sector to impact the complex system of healthcare delivery, improving communication and care.

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