Digital health market 2018
Over the past year, the number of mentions of the eHealth industry and telemedicine has increased a few times. We are seeing the rapid growth of the new sub-sector and it’s silly to ignore it. As elsewhere, opinion leaders emerge, but they are as contradictory as they are convincing — what can they believe? Let’s figure it out.
Connected health or technology-enabled care (TEC) it's increasingly seen for telecare, telehealth, telemedicine, mHealth, digital health, and eHealth services. TEC involves the convergence of health technology, digital, media, and mobile telecommunications and is increasingly seen as an integral part of the solution to many of the challenges facing the health, social care, and wellness sectors, especially in enabling more effective integration of care.
Telecare — The continuous, automatic and remote monitoring of activity/lifestyle changes over time, providing real-time alerts or calls for help in emergencies and helping to manage the risks associated with independent living, enabling people to live independently for longer, particularly those who require a combination of health and social care.
Telehealth and telehealth — Telehealth involves the consistent and accurate remote monitoring and management of a health condition including vital signs monitoring. It involves the exchange of information between patient and HCPs to identify trends or changes in the patient’s condition, helping to avoid hospital admissions, support early discharge and improve self-care. Telehealth helps to educate, train and support people with self-care.
Telemedicine — Telemedicine uses telecommunication and electronic information technologies to provide clinical healthcare at a distance, improving access to medical services and specialists. It permits communications between patient and medical staff as well as the transmission of medical, imaging and health informatics data from one site to another. New forms of telemedicine include video- telephony, advanced diagnostics and telemedical devices to support home care.
Okay, I hope you understood the terms and we can move on. Let’s look at the typical user of solutions for telemedicine.
This is a typical portrait of the user of solutions in telemedicine.
Okay, we sort of figured out with the client’s portrait, but the main problem is not clear yet
From a popular point of view, a key takeaway was that user engagement (or lack thereof) is the barrier to realizing the benefits enabled by new healthcare technologies. Finding the next technology (mobile solutions, artificial intelligence, virtual reality, and others) is not the challenge. Rather, the challenge is implementing new technologies in a way that fit naturally into the user’s daily life/workflow in order to drive consistent engagement.
Government point of opinion
Ultimately, the federal government’s future role in health IT and digital health across all six technology outcomes should focus on the four following functions.
1. Provide assurance that core consumer protections are met. The federal government should carry out its traditional role of assuring core consumer protections. Any other regulatory activities should be transitioned to private sector accreditation, certification, recognition, and/or standards bodies or–if appropriate–eliminated.
2. Recognize the standards and promote their adoption. The federal government should recognize the private sector consensus standards, adopt such standards within federal programs, utilize the market-sensitive policy levers–such as incentives, rather than technology mandates or penalties–to promote their adoption and use, and support adoption through the educational efforts.
3. Convene experts and stakeholders. The federal government should continue to serve in the role of convener, by bringing together stakeholders and experts to identify the health IT and digital health-related issues that need to be addressed and strategies to address those challenges.
4. Fund research and development activities. The federal government should invest in research and development activities designed to assess the current state of the field, define key challenges, and identify best practices and other solutions
Source: The Future Role of Government in Health Information Technology and Digital Health
Startups disrupting this industry
Naturally, there are a lot of startups, which have made a furor for the last time. It would be foolish to point out here all the interesting startups, so I’ll post exactly those companies that are most interesting from my point of view.
1. Syncthink
Syncthink, located in Palo Alto, California raised a $3,500,000 Series A on January 18, 2018. The company, founded in 2009 by Dr. Jam Ghajar, has developed a fully-integrated VR device used for eye-tracking called EYE-SYNC. It is head-mounted and uses its technology to determine ocular-motor impairments that can arise because of concussions or sleep-deprivation.
2. Meridiun
Meridiun raised $2,500,000 in seed funding on December 15, 2017. The startup located in Irvine, California has created a mobile app called AR+. The mobile application runs on smartphone and tablet and allows clinicians to deploy simulated medical content through audio, video, 3D imagery, and training. As the user looks through their mobile camera, the screen displays augmented reality such that key information appears on their screen.
3. Vivid Vision
Vivid Vision raised $2,200,000 in their last funding round in the seed stage announced on May 11, 2017. The San Francisco startup, led by CEO James Blaha, has created technology that helps people with lazy eye improve their vision. Users play VR games on the computer at home or under clinician supervision that are designed to treat amblyopia, strabismus, convergence insufficiency, and stereo depth deficiency.
Chief Science Officer, Benjamin T. Backus says, “ Vivid Vision’s strength is translating the surprisingly complex science behind vision care procedures into software that is reliable, clinically useful, and relatively inexpensive. We’re also excited about our new VR visual field test which we’ve recently started showing publicly.”
4. Osso VR
Osso VR raised $2,000,000 in their last funding round in the seed state announced on June 14, 2017. This Boston-based startup, led by Dr. Justin Barad, uses VR headsets that track 1:1 movement within the simulation to real-time in order to train orthopedic surgeons. The technology is compatible with Oculus and HTC Vive. The startup includes training on placing a tibial nail as well as hip and knee replacement models. Osso VR was selected as a MedTech Innovator and was selected as a top education simulation company by the US Department of Education.
Dr. Barad says, “It is up to us as providers, scientists, innovators, and patients to continue to push for adoption, validation and most importantly, collaboration and interoperability. Alone we can only make sequential contributions, but together we can make an exponential difference for patients all around the world.”
5. SentiAR
SentiAR has raised $1,100,000 during its last funding round announced on August 31, 2017. The Augmented Reality platform helps clinicians visualize interventional procedures. The hands-free platform projects a real-time, interactive 3D hologram of the patient’s anatomy and catheter location. SentiAR is currently working toward FDA approval. Jim Howard, Chief Executive Officer says “Through the Microsoft HoloLens, physicians have full control of their view using real-time navigation data, rather than MRI/CT, for procedures like catheter ablations.”
Immersive Touch, located in Chicago, Illinois, has received $1,000,000 in its last funding round announced January 25, 2018. Their VR solution for surgical training can be found in leading medical centers including Johns Hopkins, the University of Calgary, and the University of Chicago.
Clinicians can upload patient CT/MRI scans into the simulator to create an immersive 3D operating experience.
Jay Banerjee, ImmersiveTouch’s CEO, says “ImmersiveTouch has been the premier provider of Virtual and Augmented Reality products and services to the Medical Industry for over 13 years. Our proprietary haptic technology, FDA approved CT/MRI to VR conversion, and simulation capabilities give us the ability to provide top-notch training, education, marketing, and sales collateral in an amazing, memorable, and completely immersive environment.”
7. Augmented Intelligence, Inc.
Augmented Intelligence Inc. raised $500k in its last funding round, announced on August 3, 2017. Their technology creates patients’ digital twins based on their CT/MRI for educational and clinical applications. The company’s logic behind their VR platform is, the more that clinicians are able to see within this virtual reality creates more knowledge that was previously inaccessible prior to the creation of VR.
Sam Jang, CEO of Augmented Intelligence, Inc says, “Our mission is to create patient’s medically accurate digital twin in virtual reality for better visualization to serve greater educational and clinical needs. Digital twin allows the doctor to see through a patient’s body for better surgical planning. It can also reduce radiation exposure by better targeting the lesion from organs at risk.”
Some of the prominent players of global digital health market are Allscripts Healthcare Solutions, AT & T, Athenahealth, Biotelemetry, Cerner, Cisco Systems, eClinicalWorks, iHealth Lab, Koninklijke Philips N.V., LifeWatch, McKesson, and Qualcomm.
And according to the authors of Rock Health research key companies in 2018 are the following:
Key geo
USA:
- Model Digital Innovators in San Francisco
The largest startup hub of the country, the San Francisco Bay Area is also home to major healthcare research institutions like UCSF Medical Center and Stanford University, making it a natural spot for digital health companies to bloom.
In the first half of 2015, just over 50% of all digital health funding has gone to Bay Area companies, according to a report by Rock Health. The two single largest funding rounds of the year have been for Bay Area companies: Jawbone– a wearables company, with a round of $300 million USD — and NantHealth — a cancer care management company — which received $200 million USD. These two funding rounds account for 25% of all dollars funded so far this year.
2. New York Digital Health Incubators and Success Stories
A center for innovation and entrepreneurship, New York has been a hub for tech startups and it's an increasingly popular spot for digital health companies. According to Rock Health, New York companies have received 11% of all digital health funding in the first half of 2015, tying it with Boston for the second most-funded hub in the US this year.
Some popular, growing digital health companies in New York include 1DocWay, a telepsychiatry startup, Maven, which offers physician consultations for women over video, and AdhereTech, a smart pill bottle that measures the doses, and intervenes when doses are missed.
3. Boston’s Digital Health Incubator and Accelerator Ecosystem
Boston has become a choice location for many digital health startups, and for good reason. Space is more affordable than in other major hubs like New York and San Francisco, in addition to its proximity to top hospitals, research institutions, and talent from Harvard, MIT, and many other top-ranking schools.
Boston-based companies have received 11% all digital health funding in the first half of 2015. Out of the recipients of the six largest funding rounds so far this year, two companies are located in Boston — Virgin Pulse — Richard Branson’s venture into employee wellness — received $92 million USD, and Pill Pack — improving pharmacy services — received Series C funding of $50 million USD.
Boston is also home to digital health incubators and accelerators that cater to those innovative health companies. CVS, America’s second largest pharmacy chain, plans to launch a Digital Health Innovation Lab in Boston. Rock Health launched an incubator program in Boston, and Healthbox has a program in Cambridge, Massachusetts for new digital health startups.
UK:
The UK has one of the most business-friendly regimes in the world, making it a fertile environment for digital health. It is ranked the 8th in the World Bank’s Ease of Doing Business Report 2015.
Canada
The Digital Health Hub is creating successful digital health solutions for real-world applications. It represents an initiative to accelerate health innovations through SFU’s partnership with Fraser Health, City of Surrey and many others within the emerging Surrey Innovation Boulevard.
Digital Health Incubators in Europe: A Trend Emerging
Rockstart in the Netherlands, Bayer’s Grants4Apps programme and Vertical in Finland are only three of a number of new digital health accelerators to watch.
CAGR + Valuation of the markets
The digital health market is expected to reach 206 billion U.S. dollars by 2020, driven particularly by the mobile and wireless health market. The market in the Asia-Pacific region is expected to be a key region in the future.
Key opinions from Experts
Reports from institutions, academic organizations, and consulting firms often contain insights that aren’t always obvious from interactions with partners and customers. The Datica spring innovation report includes summaries from two such reports: the Accenture Digital Health Technology Vision 2017 and the World Economic Forum report.
Each of the reports points to trends that are going to impact the digital health transformation. AI, digital ecosystems, open marketplaces for talent, the need for better understanding of human behavior, and entirely new digital industries are all mentioned in the Accenture report. The World Economic Forum included discussion of how to build a digital healthcare system that will empower people.
Funds (mega rounds?) — PE&VC
From January 1 through June 30, 193 digital health deals closed for a total of $3.4B invested. If funding continues at this pace, 2018 will surpass 2017 for both dollars raised and the number of investments. Rather than concentrating capital in fewer startups, investors are betting on more companies with larger deals. Consequently, the average deal size significantly increased to a record of $17.9M.
China is leading the international market as a top country for digital health investment. While Beijing has dominated China’s funding landscape, with well-resourced players like Ping An committed to digital health investments, we are seeing new hubs popping up across the country, rivaling the Beijing’s funding records.
To date, Khosla Ventures has invested in a total of 10 deals in 2018, and they’ve doubled down on their investments in digital health. At this pace, they may invest in more than 20 digital health companies this year, the most of any single investor we’ve tracked. Other investors like New Enterprise Associates and Founders Fund aren’t far behind either, with a common trend of stage-agnostic and function-agnostic investing.
Conclusion
Adoption of digital therapeutics will no doubt be met with a myriad of challenges and skepticism over time, but with sound clinical evidence and engagement, there could very well be a bright future ahead. It will be interesting to observe how the digital therapeutics market evolves as emerging companies make key strategic choices, including whether to pursue FDA approval for certain interventions. While there are tradeoffs (product strategy, cost, and others) associated with going down the FDA path, this stamp-of-approval could be a source of marketable differentiation as therapy end-markets become more crowded over time.
