As the financial markets continue to struggle, digital health companies are conserving resources, slowing hiring and minding their burn rate given the uncertainty around the current economic slowdown and whether the economy enters into a recession.
Despite the challenges, many digital health companies remain favorably positioned as consumers, insurers and healthcare providers continue to look for new ways to extend care beyond the walls of health facilities and increasingly demand easier access to important healthcare data.
Recent deals and partnerships—especially those involving consumer and enterprise tech giants—hint at a sustained uptick in business for digital health companies. I will write soon on the robust levels of digital health M&A activity in the first half of 2022.
Apple, Google, Microsoft and other technology leaders are pushing deeper into healthcare, and may consider partnering with, funding and acquiring digital health startups to reach their goals. And although 2022 has been a challenging year for these megacap tech companies, it hasn’t stopped them from making moves that show their healthcare ambitions are continuing full-steam:
- Google has hired Bakul Patel, a former Food and Drug Administration official who spearheaded digital initiatives for the agency, as its new senior director of global digital health strategy.
- Microsoft has partnered with data security startup BeeKeeperAI to work with its Azure cloud computing system to remove bottlenecks from the cumbersome AI research process in healthcare.
- Apple continues to add health-related features to its smartwatch and other devices to turn wearables into clinical tools for medical research.
And these developments are taking place as the ink dries on major deals between healthcare companies and consumer- and enterprise tech leaders.
Oracle, which announced late last year it would acquire electronic health records company Cerner for $28 billion, officially closed the deal in early June. The acquisition moves Oracle further into healthcare, one of the fastest growing vertical industries.
That deal follows a major acquisition by Microsoft last year, of speech-to-text software company Nuance Communications for $19.7 billion. Microsoft said the deal brings the company further into healthcare, where Nuance distinguished itself as a leader. Nuance is now partnering with the Health Management Academy to launch an AI collective for healthcare leaders who are using AI in healthcare settings.
Amazon is opening in-person health clinics and created a new healthcare accelerator to help startups that aim to improve health outcomes for the underserved, and says it will invest in technologies that help with research, innovation, streamlining supply chains and increasing access to care.
Apple continues to partner with insurers, health systems, and clinical researchers to bring more health data to mobile devices and wearables. Apple is also getting more mobile apps approved by the FDA for medical uses, and offering development kits like ResearchKit, HealthKit and CareKit to help doctors and other healthcare stakeholders develop their own apps.
The writing is on the wall: Big tech is continuing to digitize our healthcare system. And the involvement of companies like Google, Amazon, Microsoft and Oracle means more opportunities for startups.
Our friends at Rock Health did an interesting analysis recently of the innovations occurring in healthcare’s physical, social, community and infrastructure aspects. And while tech giants are making inroads in all of these areas, they won’t be able to build every product or service in-house. They will need the help of startups as they compete with one another to make healthcare more user-friendly, seamless and digital.
Digital health startups are likely to rise to the challenge. Even in a bear market, and with a possible recession on the horizon, digital health companies will find ample opportunities to thrive and continue to do what they do best: improve life for healthcare providers and patients.
