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Every so often, business opportunities arise, we fail to take advantage of them, and then we kick ourselves for our lack of foresight.
As an entrepreneur, however, opportunity will always knock again — just in a different form. Right now, the intersection of healthcare and technology is exploding. Here’s why you should answer the door.
The Recipe for an Explosion
According to Rock Health, funding for digital health startups “continues to grow faster than overall venture funding and funding in software, biotech, and medical device sectors.” Backing up those claims, Silicon Valley Bank’s research shows 56 percent absolute growth of health tech venture capital.
Why is this happening?
Technology (both existing and burgeoning), regulation, and public needs are all colliding to create the perfect storm for innovation in healthcare — at the same time.
Almost 40 years ago, the Rural Health Clinic Services Act pushed dollars and medical talent toward underserved patient populations and geographies. Over the past 20 years, the Balanced Budget Act, Benefits Improvement and Protection Act, and HITECH Act have opened channels for dollars to flow to telehealth.
The startup world is mired with so much uncertainty. But what you can always count on is for people to act in their best interests. What fulfills that criteria better than striving for the best efforts for their personal health?
Here’s what’s already happening:
- Akido Labs, Catalyze, and Redox are leveraging standardized data for more rapid technology integration and adoption. HL7 and FHIR resources make it easier than ever for powerful clinical solutions to scale quickly by accessing and delivering the necessary EHR data.
- Sparo Labs’ Wing spirometer and other B2C devices are driving early adoption among motivated consumers in the wearable or self-tracking tech spectrum. These investments will only increase as the devices (and their respective companies) gain more data, allowing groups such as risk-bearing healthcare providers and even payers to see the value. That will allow the devices that work best to differentiate themselves from the competition.
- Across the board, a much less sexy (but no less important) innovation has helped everyone improve: the enhanced use of landline and cellular phones. Combined with automated phone calls and text messages, they make it easier to collect key data on disease-specific symptomatology, empowering care teams to manage even larger populations while responding more quickly and accurately to patients who need support.
- India-based Practo is taking advantage of the friendly climate with its doctor search portal. It allows patients to look up and book appointments with doctors across six cities in India. It even offers an SaaS platform — Practo Ray — that organizes practices, manages doctor schedules, collates patient notes, and handles payments. The best part is that Practo’s search portal is free for patients and doctors alike.
- In medical emergencies, waiting for service can prove fatal. Chinese company Guahao carved its niche with its booking service that allows patients to virtually “take a number” at a hospital before arriving.
How to Take Advantage
Want to join the gold rush? Here are four steps every telehealth effort should be taking in order to be successful.
1. Study and understand the current market and incentives
It doesn’t matter how innovative your technology is if you have no one to sell it to. Informed and tightly focused products are vital for tech startups.
2. Prove the value
Don’t let your telehealth solution be just subjectively valuable — learn how the industry currently quantifies the value provided by solutions like yours. From there, study and predict how the value will be interpreted and rewarded in the future.
3. Find the best mentors and medical experts
You should never have to guess what a medical professional wants out of a product. They will tell you if you ask. Doctors love to innovate and will jump at the opportunity to share their expertise. Your technology is meant to make their jobs easier, so they’ll be your biggest allies.
4. Know the regulations
Failing to innovate because you’re worried HIPAA regulators will knock down your door, no matter how many precautions you take, is foolish — even selfish. Regulatory frameworks in healthcare are designed to keep identities safe, medical histories private, and care streamlined. Make sure you know them backward and forward.
Healthcare costs in the United States are on track to grow by more than two percent relative to GDP over the next four years. Deloitte claims spending growth is anticipated to accelerate in 2016 and exceed four percent — then rise to more than 6 percent per year in 2017 and 2018. Therefore, venture capitalists and all types of providers (from small private practices to physician groups to multistate systems) will benefit from investing in technology that drives real health outcomes and value for their populations.