Despite mass devastation and setbacks from Covid-19, 2020 presented a huge opportunity for healthcare innovation in terms of regulatory changes, new reimbursement, advances in medical research and new models of care; attracting over $14.8B in VC funding. So where should we be investing now? Here’s my take on seven top areas.
1. Virtual Care
In primary care, remote care including telehealth and remote patient monitoring, grew from 21% in 2019 to 45% at the end of 2020. Benefits include: improved access for patients, optimization of clinicians, reduced operating costs, and cost savings for employers. Scaling remote care further will require data analyzing face-to-face consults per clinician and the nature of care provided. For example, a pause in nurse-led health screening was associated with a peak in remote care delivery of 71%.
Meanwhile, in secondary care, patients admitted to hospital are being discharged early to ‘virtual wards’ at home or in the community. The hospital is moving towards a ‘hospital without walls’ model, a digitally connected community instead of a physically defined space.
Virtual care requires investment in community specialist hubs, integrated care hubs and partnerships between primary care clinics to deliver services collaboratively. Continued investment in remote monitoring devices, wearables, sensors and analytics software will serve to connect a wider network of seniors, enabling them to live independently at home.
2. Operating Systems
With the breadth of available digital health tools, physicians are now presented with a wealth of software platforms: to schedule appointments, integrate personal health data, provide data analytics, risk stratify patients, monitor chronic diseases, suggest a treatment strategies, predict health outcomes and reduce hospital admissions.
Health outcomes will exponentially improve when we build and invest in operating systems that integrate this wealth of information to inform decision making, platforms which rapidly consolidate, amalgamate and analyze information to be acted on by AI or an appropriate health professional.
Memora Health is an enterprise SaaS example which I’ve invested in, a rapidly growing startup, building a platform to digitize outpatient clinical workflows. Memora solves the data integration and analysis problem with natural language processing, automating routine tasks for primary care providers and hospital systems.
3. Artificial Intelligence
Telehealth platform, Babylon Health has long established itself in AI based automated patient triage. The company is now advancing their AI technology beyond triage, to AI based medical diagnosis. In their 2020 Nature publication, the company reported their medical diagnosis algorithm achieved an accuracy rate of 77.26% compared to 71.40% achieved by 44 doctors. Such advances will increase the adoption of AI as real-time second opinion support systems for clinicians. The global AI in healthcare market is growing at a CAGR of 44.9% and is set to be worth $45.2 billion by 2026.
4. Cancer Screening
In November 2020, 4.46M people were waiting to start NHS treatment - the highest level on record. To solve this problem, payers have been racing to adopt AI based solutions. AI based cancer screening is set to become mainstream. Stanford University reported how deep learning is fusing pixel data with electronic health data to improve the diagnostic accuracy of medical imaging.
Physician gut feeling has been shown to identify cancer better than existing referral guidelines. Deep-learning has the extraordinary potential to characterize physician gut feeling by marrying the art of medicine with the science.
Kheiron Medical’s deep-learning software is one such example, providing AI based screening for breast cancer, with reports showing their software to be as good as physicians in interpreting mammograms. The global AI based medical imaging market is expected to reach $1.5B globally by 2024.
“Deep-learning has the extraordinary potential to characterize physician gut feeling by marrying the art of medicine with the science.”
5. Digital Therapeutics
Digital therapeutics are software to prevent, manage or treat health conditions. With increased pressure on health systems for clinician dependent services, digital therapeutics can reduce costs, shorten waiting times, treat patients who are sub-threshold or drop out of standard therapies, and provide continuity of care for those who are discharged.
US pharmacy benefit managers and NHS commissioners are receptive to them, as well as employer groups seeking access to digital therapeutics for employee wellness and retention. In June 2020, the FDA approved the Akili Endeavour game as the first digital therapeutic, a video game prescription for children with ADHD.
Hot on the heels of Akili, BFB labs is developing immersive video games to enable young people to self-manage mental health conditions including phobias, sleep disturbance, anxiety, stress and depression. These games are CE marked and MHRA approved. Growing at a CAGR of 26.7%, the global digital therapeutics market is expected to reach $6.9B by 2025.
6. Clinical Outcomes
With increased pressure on health systems for clinician dependent health services, digital therapeutics and AI based solutions have the potential to transform traditional care delivery pathways. The key to this transformation is clinical data demonstrating health outcomes for patients, threshold safety and efficacy for providers, and cost-benefit analysis with return on investment for payers.
The first international guidelines standardizing research protocols and reporting of results for clinical trials involving AI were recently published, the SPIRIT AI and CONSORT AI guidelines. These guidelines will lead to increased transparency and completeness of clinical trials involving AI, and enable founders to demonstrate robust evaluation of AI based solutions. In turn, clinical outcomes and health economics will become barriers to VC follow-on investment and Centers for Medicare and Medicaid Services (CMS) reimbursement.
7. Value based care
Ever since the Affordable Care Act was passed in 2010, the US healthcare system has been evolving from a fee-for-service to a value-based system, much attuned to the UK NHS. The CMS ruling on price transparency comes into effect this year, requiring hospitals to make public their standard charges for the items and services they provide. This ruling opens up the industry to price competition and market efficiency, as well as new platforms that lower healthcare costs and increase quality for consumers.
I’ve invested in one such startup that could leverage the price transparency of drugs ruling. OrbitalRX is an AI based SaaS platform partnered with IBM which automates hospital pharmacy drug supply chains. The platform mitigates the financial burden and negative outcomes associated with drug supply chain disruptions. Drug shortages cost US hospitals almost $1B annually, whilst the growing pharmacy automation market is valued at $5.5B.
If you’d like to collaborate or have a view on the article, drop a comment here, I’d love to hear your thoughts.
Namrata is a Healthcare Investor in the US and Europe and a Primary Care MD