Digital Health Investor Summit Highlights Market Potential

Fenwick & West Life Sciences Group

[author: Michael Esquivel]

Last Friday we hosted our inaugural Digital Health Investor Summit in partnership with RockHealth at our Mountain View conference center. During the program, several key themes emerged that point to the inevitability of a more engaged and technology-driven patient. Those themes were set in the context that massive change in the healthcare delivery system is underway, irrespective of the fate of the Affordable Care Act in the Supreme Court or additional legislative initiatives.

Key resources provided to attendees include:

Bob Kocher of Venrock presented compelling data showing how the U.S. healthcare industry suffers from negative productivity and is unsustainable. While other industries have significantly increased productivity over the last few decades, the misaligned incentives in our current healthcare system have allowed productivity to lag behind other sectors. The result is that savvy healthcare investors are looking to other industries for best practices.

Dr. Daniel Kraft, Executive Director of FutureMed, noted that as a pilot he has long been aware of best practices in the aviation industry that could and should be applied to healthcare including:
  • the use of checklists (made famous by Atul Gawande), 
  • simulation (better for surgical training), 
  • heads-up displays (clear, concise presentation of relevant data), and 
  • radar (mapping populations and trends).

While technology implementation in medicine has been difficult and slow moving, we now seem to be at a tipping point. Data storage, signal processing speeds, and the wide deployment of mobile devices are combining to make possible real transformation in the healthcare delivery system.

Aimee Jungman from frog design pointed out that there is a big difference between data and meaning. Daniel Kraft echoed the same caution when he said that there is not that much value to be had in the quantitative-self market – e.g., devices that monitor all sorts of activity from sleep to calories consumed, to activity. The real value will come from layering and interpreting that information.

Anne DeGheest, managing director of HealthTech Capital, made a similar point noting that for products to be widely adopted by consumers they need to provide actionable and quick feed-back to patients, but they also mustn’t add to the burden of the disease for the patient.

Daniel Kraft advised the group not to be deterred by the current uncertainty regarding payers. “Don’t build or fund for today’s reimbursement environment,” he explained, “because it will change.” As healthcare moves out of the clinic and into more local and more retail environments, it will be adoption by patients, rather than by doctors, that will drive product success.

Overall, the Summit take away is that the market for digital health is real, the output has to be meaningful and actionable, and the products have to be consumer-friendly.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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