KEY TAKEAWAY:Rob Coppedge is CEO of Echo Health Ventures in Seattle and has been investing and working in health care for 20 years. He recently said “I believe the digital health party is over and why those of us focused on long-term systemic transformation should be happy to put this hype cycle behind us”. He is partly right.
According to the article on CNBC “since 2014, roughly $16 billion in venture funding has been invested across 800-plus companies in the digital health space . If the investors of these companies were to generate the returns they are expecting, we would need to triple the public market cap of the health IT space by 2021. These are unrealistic expectations that have created an unhealthy environment for tech-enabled health care start-ups and the entrepreneurs that lead them. Only recently have the VC unicorn watchers across the blogosphere begun to question we aren’t seeing the billion-dollar success stories from other industries replicated in HCIT (health care info tech), exposing underlying concerns that threaten the return profiles of overcapitalized digital health portfolios”.
That money is gone into thin air as investors fear being left out in the cold if another facebook happens to bloom. In the end, users will define what successful digital health initiatives win not investors.
I have listened to a LOT of people over the years talk about digital health. Here is what I found…
1ne: Right now the most important aspect of “digital health” is EHR’. Most everyone using EHR’s is disappointed with them. Patients want full access to their EHR’s and want ALL their doctors to have access to EHR’s without the need for them to call and ask HCP’s to send copies of their medical records to one another while HCP staff wants a better user experience.
2wo: Virtual doctor visits are filled with traps, including misdiagnosis and reimbursement issues. In qual research with physicians the vast majority do not like or want to get involved with virtual visits but understand why some patients see this as a time savor.
3hree: Pharma companies are still not meeting the needs of online health seekers, including content that engages users and is easy to understand.
4our: Although there is talk about “customers of health care” research has shown that very few “shop around” for better prices when it comes to medical care.
Finally, as Rob Coppedge says ” “Don’t believe the hype…” especially your own. A healthy dose of humility is essential. Or said differently, many companies with thousands of Twitter followers and copious name-drops in the WSJ have gone out of business for lack of revenue and margin.