One of the silver linings of 2020 is that digital health is finally coming into its own. Health is a huge and outdated industry, making up 17% of US GDP. During the pandemic, however, it has leapfrogged about a decade in terms of adoption of technology. The disruption created by the pandemic is creating new opportunities for digital health startups.
I spoke with five leading early stage health tech investors across the US and Europe about the trends they are seeing and their predictions for the year ahead.
#1: The mobile phone will be transformed into an on-call care team
Kristin Baker Spohn, General Partner at CRV
“The pandemic has been an accelerant for digital adoption across the board, and healthcare is no exception. Heading into 2021 there are a few areas where I see those trends strengthening.
The strain we’ve seen on our healthcare system heightens our need for tech that streamlines cumbersome processes to meet people where they are (patients and providers) and improve overall health. Viz.ai, software that leverages artificial intelligence of medical imaging to drastically reduce time to treatment for stroke victims, will likely continue to thrive in 2021. By making clinician’s mobile phones perform as a system of action, clinical teams will be able to help treat patients better and faster while also reducing the strain on staff and resources.”
#2: Virtual and augmented reality will become more mainstream in treatment
Lomax Ward, Cofounder and General Partner at Luminous Ventures
“2021 will see an accelerated deployment of virtual and augmented reality in treatment and care delivery. Payors and providers are waking up to the efficacy of these treatments, as well as the scale that they can deliver through a remote offering. Furthermore, keeping patients out of the hospital reduces both costs and stress.
Areas of particular impact are mental health (for example, Oxford VR) and chronic pain (for example, Karuna Labs), both significant areas of healthcare spend. A 2020 report sees this market grow over 15x from $2 billion in 2019 to $34 billion in 2027.”
#3: Care delivery in the home will move beyond basic telemedicine
Annie Case, Principal at Kleiner Perkins
“The COVID-19 pandemic put a spotlight on the capabilities of telemedicine, as patients accessed important care from the safety of their homes. Regulatory changes helped to accelerate adoption, and many patients tried virtual visits for the first time. While telemedicine has emerged as a critical component of our healthcare system, it has also become clear that telemedicine alone is not the answer. Many care needs require in-person visits and diagnostics, and providers often wish they had better insight into patients’ social risk factors.
We recently invested in MedArrive, which enables healthcare providers and payers to extend safe and affordable care into the home. MedArrive is one of a growing number of companies that put patients back at the center of care and allow patients to receive care wherever is safest and most convenient for them. In 2021, I think we’ll see an acceleration in the adoption of solutions that help move care out of hospitals and clinics and into virtual, retail and home care settings.”
#4: Clinical outcomes will be tied to relevant financial ROI
Yumin Choi, Partner at Bain Capital Ventures
“The market trend I’m excited to see develop is the convergence of clinical and financial outcomes. This seems fairly basic, but these two factors have largely been isolated in the healthcare world. Case in point: try to figure out the cost of anything in healthcare and you’ll get a myriad of answers (and even some non-answers).
As value-based care continues to take a foothold, albeit still in its infancy, the need to tie clinical outcomes to relevant financial ROI is paramount. While it’s never as clear cut because of the complexities of the healthcare system, the days of only focusing on one and not the other is, if not impossible, quite irresponsible and definitely unsustainable.”
#5: Chronic and complex diseases will be treated with digital solutions
Cheryl Cheng, Founder and General Partner at Vive Ventures
“2020 really opened everyone’s eyes to the possibilities and the necessity for digital health. Looking ahead to 2021, we also need to think about long term digital health sustainability: how to integrate digital health into a new world of increased at home care and diagnostics, realigned incentives with less in person visits, and more aggressive chronic and complex disease management.
For example, we will see a surge in mental health services and services will get more specific for patient populations like teens, women, seniors, etc. We will see even more care move outside the four walls of traditional clinics and hospitals such as cancer care and other forms of chronic disease management.”
#6: Senior care will be reimagined
Kristin Baker Spohn, General Partner at CRV
“The pandemic also has people taking a hard look at assisted living facilities and reimagining senior care. There was an ongoing trend towards care and monitoring solutions to support seniors as they ‘age in place’, and I’m excited to see entrepreneurs build for that future.”
#7: Whole person care will be provided via “one-stop-shop” platforms
Yumin Choi, Partner at Bain Capital Ventures
“2020 has been a challenging year, but the major catalyst on the healthcare front has been the accelerated shift from traditional in-person visits to virtual and remote care. While there are numerous companies addressing various parts of the healthcare ecosystem, the sheer volume of vendors is causing confusion and frustration for consumers as they struggle to deal with non-integrated, disparate solutions.
I believe we will continue to see strong consolidation in the market, like Teladoc + Livongo and Omada + Physera, and the winners in the market will be solutions that create a comprehensive platform approach for one-stop-shop whole person care.”
#8: Prescribed Digital Therapeutics will become widespread
Lomax Ward, Cofounder and General Partner at Luminous Ventures
“2020 saw the FDA approve the first cohort of Prescribed Digital Therapeutics (PDTs), being software programs (websites or smartphone-based products) that deliver evidence-based therapeutic interventions to prevent, manage or treat a medical disorder or disease. Approved treatments cover substance abuse, ADHD and IBS, from providers such as Pear Therapeutics, Akili and Mahana Therapeutics.
2021 will see these products put to the test in the market, with success hinging on a number of factors such as the extent to which clinicians write prescriptions and the rates at which payors provide reimbursement. 2020 has seen the huge growth in doctors delivering care through digital tools such as video and messaging platforms; 2021 will see doctors prescribing digital technology which can itself actually treat the patient.”