Why is Investment in The Healthcare Blockchain So Ridiculously Low at 2.3% in 2018?
Life inside the Digital Health bubble appears very good these days. Machine Learning/AI is beginning to demonstrate efficacy for patients and wearables like Alivecor have received FDA approval as medical devices. It is a fact that the holy trinity (+1) of Gartner Hype Cycle technologies include:
· Artificial Intelligence/Machine Learning
· Virtual Reality/Augmented Reality
VC Investment in Virtual Reality companies and projects is soaring, “ In 2016 several venture capital firms and VR companies formed the Virtual Reality Venture Capital Alliance (VRVCA) amassing $10 billion in funding and the cumulative brains.” Furthermore, there are clear early examples of effectiveness and enhancing patient experience during chemotherapy treatments accompanied by immersive VR.
There has been a massive capital infusion into artificial intelligence projects worldwide, and across every industry. In fact, artificial intelligence is creating so much interest and investment that there is a labor shortage of tech workers in Silicon Valley and New York. AI’s impact on healthcare is already causing a seismic shakeup in medical specialties including radiology and pathology.
Recent advances in artificial intelligence have led to speculation that AI might one day replace human radiologists. Researchers have developed deep learning neural networks that can identify pathologies in radiological images such as bone fractures and potentially cancerous lesions, in some cases more reliably than an average radiologist. (HBR, March 2018)
In fact the impact of machine learning/AI has caused radiologists to be encouraged to become much more prominent in patient care to establish closer relationships with patients instead of simply reading images and providing interpretations of scans. Andy DeLao’s 2016 American College of Radiology Moreton Lecture Presentation is a clarion call to all radiologists to become more involved in the patient experience as a means to combat threats from AI.
The low levels of public investment in healthcare blockchain companies and projects is surprising considering the importance of blockchain as an enabling technology for AI/machine learning and VR/AR. On May 22, 2018, a $100M investment fund for AI and blockchain was created. “SingularityNET and AI Decentralized today announced the Decentralized AI Alliance (DAIA), an open industry alliance trying to foster the development of decentralized AI technologies.” The initial
DAIA will also foster the creation of funds to support AI blockchain-powered projects. The initial DAIA plan involves an affiliated fund that will support 100 projects over the next two years, with funding allowances of $2 million for each of the first 50 projects.
The lack of scale in public funding and VC investment of healthcare blockchain projects does not mean that there are not significant efforts underway. Today, most projects in healthcare are being performed in private and utilized in back office automation/testing environments. These internal pilots have already yielded significant insight into the characteristics of more public and patient/provider facing products. For instance, pharmaceutical companies are testing logistic and supply chain offerings in strict permissioned environments.
Healthcare blockchain projects are receiving funding even if it is at a lower level compared to the importance, opportunity, and scale of the healthcare sector. Tools like ICO Bench allows prioritization and search for ICO’s by category, including “health.”
If you are interested in the latest digital health related ICO’s than Vince Kuraitis has created the most comprehensive listing to date. The curated ICO list includes a 50 word description as well as reference to the ICO Bench Summary.
Certain horizontal efforts/models in blockchain identity and interoperability will be able to be utilized in healthcare blockchains. It will be useful to see the upcoming announcements from pharma, payors, investors, and health systems that will further validate blockchain as an enabler for the high flying and funded companies focused on VR/AR and AI/machine learning.