Overview
During this session, Partners Stephen Bernstein and Marshall Jackson, Jr. moderated a panel that examined the latest developments in digital health and the factors driving value in the industry.
Session panelists included:
- Alena Antigua, Managing Director, Healthcare Technology, Stifel Financial
- Dr. Ryan Harris, General Partner, Norwest Venture Partners
- Oliver Kharraz, MD, CEO & Founder, Zocdoc
In Depth
Key takeaways included:
- While the market has had no shortage of digital health companies with massive valuations and excitement to participate in “digital health investing,” investors are now digging deeper to pinpoint the concrete, measurable return on investment that is delivered to patients and providers. There has also been a shift in focus from revenue growth to the macroeconomic factors behind healthcare like customer concentration, models that are scalable over time where sales cycles can be truncated, and identification of technology that fosters interoperability (specifically, what value can be added to the technology over time to solve more than one issue at a single point in time).
- Digital health can be generally organized into three categories: tools that improve administrative efficiency, tools that are diagnostic in nature and deployed digitally and tools that support physician decision-making. Several factors created opportunities for increased efficiency to deliver patient outcomes and increased efficiency in the financing and staffing of healthcare systems, which created momentum for digital health solutions. Those factors include (1) acceleration of the technology adoption curve, (2) increases in valuations, (3) new companies expanding into remote telemedicine, (4) remote patient monitoring and (5) hospitals understanding what technologies they need, creating opportunities to sell tools that will help them regain their competitiveness.
- The panelists elaborated on some of the challenges with navigating the smörgåsbord of regulatory regimes that affect digital health companies. Investors spend a significant amount of time identifying areas of regulatory risk. As operations evolve, compliance with the different regulations on a state-by-state level has created friction and operational complexities. Ultimately, opportunity stems from understanding the patient flow and needs of the business, along with the legal compliance risks, and designing a company to fit in the sweet spot between the two.
