What Investors Know About The Future Of Health That You Don't

Over the past few years, it’s become a quarterly ritual. A range of organizations have gotten into the habit of releasing the latest data on the types of bets investors are making on health’s digital future. 

There are many ways to view these quarterly updates. Here are two: one is merely interesting and the other offers much more value. 

  • Who’s Up and Who’s Down: Many observers look at quarterly investment data and ask questions like: Is enthusiasm in digital health fading? Are we in the midst of a bubble? Are these companies over-valued? 
  • What Do These Investments Say About Where Health is Going?: Another, more useful, way to look at these numbers is to ask yourself: Why are investors pouring billions into these types of companies and how will it influence my work/product/service/company? 

It’s important to note that investors are not infallible. They often work with imperfect and incomplete information. In addition, because they are heavily focused on realizing returns from investments in a relatively short time frame, they may often overlook promising firms that may take longer to gain traction due to health’s long sales cycles. 



Despite this, it can be very valuable to look carefully at investment data from the perspective of trying to figure out where the market is going and how to prepare to take advantage of (or minimize the damage) from trends that are not always immediately apparent. 

Over the past quarter I’ve been working closely with StartUp Health, a company focused on supporting the growth of the global digital health ecosystem, to develop a weekly series of mini reports focusing on the shape and scope of health’s digital future. (You can access a compendium of the first 10 issues of this free report here.) 

The reports provide contextual information and analysis of digital health investment data StartUp health collects on a real-time basis. Here are several trends that I think are interesting that emerge from this data. 

  • Data Will Help Government, Health Systems and Others Nudge Consumers to Engage in Certain Behaviors in Invisible Ways: In this era of value-based care, hospitals, physicians and others are seeing financial incentives shift to prevention and keeping patients out of the hospital. In response, they are turning to data analytics companies such as Health Catalyst to help them figure out how to understand and use health data in ways that can keep them profitable and get people to behave in certain ways. In many cases, patients won’t be aware that they’re being persuaded because the focus won’t be on engaging them directly, but changing the environment around them in a very subtle fashion. 
  • Digital is Okay, But Digital + Humans + Data is A Lot Better: As companies like Walgreens have realized, offering digital tools aren’t enough to keep people actively engaged in wellness initiatives over the long-term. Humans are very necessary, but they need to be armed with data that will help them make good decisions and understand people at the individual level. Investors are betting big on companies that are leading the “TechnoWellness Revolution” because they could make wellness programs actually effective rather than a waste of resources. 
  • Focusing on the Process of Healthcare is Boring, But Essential: A number of companies are helping health organizations manage process-related issues, such as customer communication, record keeping and compliance. These bread and butter tasks may be boring, but they also provide opportunities to squeeze waste out of the system and deliver regular, predictable revenue for companies — and investors. 

Overall, it’s vitally important to look critically at investment data because it is a proxy not only for the level of interest in digital health globally, but an important window into what major players in health — and beyond — view as important areas of focus. 

And, if you’re engaged in the business of developing, supporting and communicating health tech innovations, these are must-know insights that can play a big role in determining your success — or failure in digital health. 

The next flurry of quarterly digital health investment overviews will be released soon. I suggest you read these valuable reports very carefully.

1 comment about "What Investors Know About The Future Of Health That You Don't".
Check to receive email when comments are posted.
  1. Fard Johnmar from Enspektos, LLC, June 19, 2015 at 11:46 a.m.

    Paula: Thank you! I'm glad you enjoyed this piece. I do my best to offer value!


Next story loading loading..