Reflections from VirtualMed 2018
This past week was the inaugural Virtual Medicine Conference at Cedars Sinai in Los Angeles. This two-day event, focused on the use of Virtual Reality in healthcare, brought together a wide range of stakeholders including hospitals, clinicians, pharmaceutical companies, insurance providers, startups, investors, and scientific researchers. A number of topics were covered, including research, applications in use today, what is working and what is not, what needs to improve, the increase in adoption from doctors, patients, and insurance companies, and more. I can’t say enough about the quality of event Brennan Spiegel and his team were able to put together. He, Cedars Sinai and a handful of startups, including a company I invested in, AppliedVR, are doing an amazing job creating this whole new category within healthcare.
Being at this conference really crystalized why I am so excited about healthcare as a VR application. Anyone who knows me has probably heard me drone on about why I believe healthcare is VR’s killer app. For nearly two years now, I’ve been on record saying VR will be bigger in healthcare than it will be in gaming, storytelling, and every other use case combined. VR will be the single biggest reason we reduce the improper use of opioids in this country, which killed 90 people over the conference’s two days. In the next 5–7 years, being prescribed VR therapy will be as common as being prescribed antibiotics. It will be used in hospitals and in home to treat pain, relieve stress, assist in rehab, and help with mental disorders. It will be used in children’s hospitals, labor and delivery wards, to train surgeons and so much more.
What makes this development even more profound is it comes at an inflection point in the healthcare industry. There are two fundamental changes happening within the healthcare industry that are providing incentives for doctors and hospitals to adopt new solutions such as VR.
The first is the transfer from fee for service to fee for value. VR not only improves results and saves hospitals and insurers money but improves the experience of patients as well. Who wouldn’t prefer sitting on a beach to starring at the walls of a sterile hospital room? Who wouldn’t want to throw balls at cute teddy bears or watch a Cirque du Solei performance while the doctor performs a procedure? Almost unanimously, patients have said their treatments were not only more effective but also more enjoyable due to VR. What other treatment actually brings patients joy? Because of this unique property of VR, it will allow physicians and clinics to deliver higher value care which they are under immense pressure to do.
The second biggest transformation is the digitization of the healthcare industry. Ten years ago, less than 10% of hospitals had electronic records and today, over 95% of hospitals are digitized. That’s just the start of this transformation to digital. Wearables, sensors, and biofeedback from VR experiences will continue to push this trend of digitization of the healthcare industry. This digitization opens up new possibilities as it creates opportunity for near infinite distribution at zero marginal cost.
What is surprising, and honestly frustrating to me, is that most of the investment community is avoiding VR almost entirely right now. Couple years ago, everyone focused on VR for consumers (gaming, storytelling, etc.) and that just hasn’t played out the way most people thought. Many VC’s made investments into VR companies that have either shut down or aren’t growing the way they hoped. Because of that, most are writing off the entire technology once again. The problem with that approach is that new technology paradigms rarely develop the way everyone expects. But just because gaming or VR headset sales aren’t high doesn’t mean the technology isn’t gaining momentum in other verticals. Very few are taking the time to actually study the market and appreciate what is actually working.
Our own portfolio company AppliedVR is now in close to 200 hospitals across 46 states. They have revenue and their growth is accelerating. And it’s not just AppliedVR. Anyone who attended the conference couldn’t help but walk away feeling that we are on the cusp of one of the biggest tech trends over the next 10 years. The number of independent, academic studies of the use of VR in healthcare is growing rapidly and time and again the results are clear — VR works!