At the dawn of a new year, it seems like the perfect time to reflect on what has been an exciting 12 months of investment in digital health and explore what’s next in 2022. A total of $21.3B was invested between Q1-Q3 of 2021, up from$14.6B invested in 2020. Let’s start with two top investment areas that should receive extra attention this year and beyond.
- Child and Adolescent Mental Health
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In 2020, 16.0% of children aged 5 to 16 years (one in six), were identified as having a probable mental health disorder, an increase from 10.8% of children in 2017. Anxiety, depression and ADHD were themost commonconditions, though all are under diagnosed. Staggeringly, up to 10% of 15-16-year-olds are reported to self-harm. Fueled by social media, body dysmorphic disorder now affects2.4%of young people, and around2.7%of teenagers between 13 and 18 years now have an eating disorder, up by 52% in the past year.
Investment opportunities lie in services for child and adolescents with suspected ADHD. The median waiting time for an ADHD assessment in the U.K. is 5.8 months but where I practice, the waiting time can be up to five years! Access is needed to new urgent child and adolescent mental health services for those affected by thoughts of self-harm and suicide, for those with eating disorders and services for young people with body dysmorphic disorder. Investment should focus on services that provide affordable early intervention, specialist support, psychological support, family support and community based care.
- Palliative Care
Palliative Care is the provision of holistic support and quality-of-life care for patients with an advanced progressive condition. The care addresses both physical need such as pain control and non-physical needs such as emotional support for the patient, caregivers and family members. The globalPalliative Care Market was valued at $11.2 billion in 2020, and is projected to reach $25.3 billion by 2030, with a CAGR of 8.4% from 2021 to 2030.
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- Complex chronic disease management
This year we saw multiple investments made in startups providing last-mile care delivery.Axle Healthis one such company providing an API to health systems and payers for health professionals to deliver care at home. These professionals carry out procedures such as blood taking, wound care and clinical reviews to support the hospital-at-home infrastructure and a shift towards home as the preferred place of care.
The next step in this model is to enable multidisciplinary teams to come together to manage specific conditions including high disease burden and high cost conditions such as heart failure, chronic kidney disease and dementia. The heart failure market alone was valued at $3.2 billion in 2015 and expected to rise to $11.8 billionby 2025 (CAGR of 13.7%). These platforms will enable, secondary care physicians, specialist nurses, primary care physicians, community nurses, occupational therapists, physiotherapists and caregivers to come together to provide care for patients with multiple co-morbidities. Successful companies will reduce hospital admissions, anticipate and prevent acute deteriorations, reduce costs for payers, whilst improving quality of life and symptom control for patients.
- Cancer
At the start of the pandemic, both the U.K. National Health Service and the American Cancer Society recommended that routine cancer screening be postponed. This was to divert health system resources to Covid-19 patients and reduce the spread of the virus. In March-April 2020, an 80% to 90%reduction in breast, colorectal, and cervical cancer screening was reported compared to the previous year. By June 2020, screening programs had resumed, however uptake was still down by 29% to 36% compared to 2019. IQVIA have equated this to around80,000 missed diagnoses of cancer in the U.S. over 3 months. Furthermore, for patients with a known cancer diagnosis, one in three patients in U.K. reported their treatment had been impacted because of the pandemic.
The U.S. national cost for cancer-related medical services and prescription drugs is expected to increase from $183 billionin 2015 to$246 billionby 2030. Investment opportunities lie in identifying higher risk individuals, increasing screening uptake, reviewing waiting lists, prioritizing patients at highest clinical need, enabling earlier diagnosis, and providing those affected by cancer with timely access to oncologists, surgeons, specialist nurses, care coordinators and care navigators.
- Clinical AI
Use cases of clinical AI are infinite. The Stanford Center for AI in Medicine and Imaging (AIMI) recently published a paper demonstrating fusion of EHR data with pixel data to improve diagnostic accuracy of medical imaging. Last month the AIMI announced a collaboration with AI based cancer imaging company Kheiron Medical to improve the diagnostic accuracy of non-Hodgkin’s Lymphoma. The AI in healthcare market is projected to grow from $6.9B in 2021 to $67.4B by 2027 (CAGR of 46.2%).
Applications of AI in healthcare are numerous – natural language processing (NLP) based conversation tools, robotic process automation (RPA) applications for appointment scheduling and clinical triage, billing and price transparency platforms, disease biomarker discovery platforms, and personalized drug discovery platforms.
- Primary care
Primary care physicians have evolved to become the controllers of a patient’s health journey. They are now accountable for interpreting multiple sources of health data, providing complex care, managing overall patient care and experience, reducing overall healthcare costs, and supporting a multitude of new allied health professional roles within a practice. Value-based primary care companies such asPearl Healthoptimize for appropriate use of care, whilst also maximizing patient outcomes, system processes and patient experience.
Firefly Health was one of the first of many companies to implement avalue-based health planin the employer sponsored health insurance market. I would not be surprised if Amazon comes in too. Reimbursem*nt for value-based primary care will continue to grow viaDirect Contractingwith the Centre for Medicare and Medicaid. The most successful primary care organizations will become part of a wider network providing fresh ingredients and meals, social care, support in housing, transportation and access to financial benefits for qualifying households.
- Women’s health
Digital health startups focused on women’s health received over$1.3Bin investment from Q1 to Q3 in 2021. In the same year, Maven Clinic, became the first women’s health unicorn in raising$110M in Series D. However, there is a still a lot of progress to be made and thus further opportunity for founders and investors. The global women’s health market was valued at$35Bin 2019 and is expected to reach$41Bby 2027 (CAGR of 3.2%).
Whilst menopause and fertility sectors have received recent attention and investment, maternal care remains largely underfunded. Out of 11 developed countries, the US has thehighestmaternal mortality rate, and black women arethreetimes more likely to die from a pregnancy-related cause than white women. Opportunities lie in investment in perinatal health, including support for women during termination, miscarriage, as well as through labor, breast feeding, post-natal depression and for pelvic health.
Editor’s Note: The author, who is a physician and investor, has not invested in any of the companies mentioned in this article.
Photo: Hollygraphic, Getty Images
Dr. Namrata Rastogi
Namrata is an MD, Family Medicine Physician, with an MS in Management from Stanford GSB. She has over 14 years of experience in healthcare executive and advisory roles: including VC, Product advisor to startups, Partner of a primary care clinic and Digital Transformation leader for a health system. She currently serves on the Health Advisory Board at Palantir and as a Board Advisor at Medwise.ai.
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