State of Digital Health

In 2016, healthcare cost in the US was $3.3 Trillion – 17.9% of GDP, passing $10,000 per capita mark for the first time ever. According to CMS, by 2026, the figure is projected to grow to $5.7 Trillion – 19.8% of GDP. The answer to curbing and reversing the trend with respect to healthcare costs lies in large part to the movement towards Digital Health, or ‘Health Tech’. The proliferation of devices and applications
across the healthcare spectrum has led to a data tsunami – the “what”. Machine Learning, Artificial Intelligence and overall Big Data analytics are leading to real-time actionable insights – the “so what”. We have entered the realm of the Internet of Medical Things (IoMT), with ubiquitous connectivity and measurement of everything from our vitals and nutrition to physical activity and medical compliance. We are just starting to leverage that data in a meaningful way and seeing early impact on health and well-being.

In 2017, venture investments in Digital Health startups exceeded $6 Billion for the first time, and the trend seems to be accelerating with $1.6 Billion invested in Q1, 2018. The juxtaposition of rising healthcare costs and increased Digital Health investments is not all that surprising. Advances in underlying real-time analytics and potential of leading edge innovations around genomics are turning the perceived fiction of personalized medicine into a real possibility. Foundational disruptions such as Blockchain, while relatively nascent, are creating excitement (and some anxiety) around secure, immutable data sharing across silos – with healthcare as the ideal use case. The patient or consumer is at the center of the new Digital Health movement. Consumerization of healthcare, a theme throughout the report, is a continuum from healthcare that has historically been reactive, transitioning to preemptive, predictive, and eventually highly personalized. All of that should lead to higher efficiency, efficacy, and affordability. It’s no surprise then that the space is incredibly dynamic. Not only incumbents, but also new players, like Apple, Google and Amazon are entering the Digital Health fray with deep pockets, big vision, remarkable consumer reach, and often through acquisitions.

The first section of this report includes an introduction to the overall digital health market along with demographic and regulatory trends driving Digital Health. We then dive into the role of various healthrelated data inputs, outputs, and technologies – such as AI and Blockchain – in driving healthcare outcomes. The report divides the overall healthcare landscape into four distinct segments – consumer, provider, payer and value-based care – and identifies key investment trends, interesting startups, and active investors in each segment. Later sections include a listing of top M&A and Private Placement transactions over the last three years, and profiles of large public acquirers and select private companies within the sector.

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The-State-of-Digital-Health_04242018