HealthTech Horizons

February 15th, 2024

What's in this edition:

Insight Spotlight: Generative AI and Large Language Models (LLMs) are rapidly integrating into healthcare, promising solutions but facing continued roadblocks. Expect continued AI adoption, industry consolidation, and potential revolution in medical training with AR/VR technology, amidst ongoing tension between tech innovation and healthcare complexities.

Innovator's Radar: A weekly roundup of health tech and digital health investments by Fierce Healthcare, highlighting notable funding rounds including HEAL Security's $2.3 million investment for cybersecurity in healthcare and Care Continuity's $10 million series A-3 funding to streamline patient navigation services.

Decoding Digital Health: Epic has launched new third-party vendor programs, housed within the Showroom website, as a replacement for its former app market, aiming to streamline connections between health tech companies and providers.

Industry Pulse: A survey commissioned by Elevance Health revealed that consumers express optimism and satisfaction with virtual healthcare experiences, with 75% planning to continue using virtual care and 73% willing to recommend it to family and friends.

Hot Topics: The rise of generative AI is disrupting the healthcare industry signaling broader ecosystem transformations and prompting organizations to reassess their strategies for navigating the evolving landscape effectively.

Data Dive: A Deloitte survey suggests that healthcare leaders must focus on data, governance, consumers, and the workforce to successfully implement generative AI.

Insight Spotlight:

The healthcare landscape has experienced significant technological disruption. Looking ahead, the intersection of technology and healthcare will likely see continued evolution, but questions remain about how market corrections will unfold and where the industry's trajectory will lead.

• The healthcare landscape is experiencing a seismic shift due to the rapid integration of generative AI and Large Language Models (LLMs). These technologies are now being applied to various facets of healthcare, promising groundbreaking solutions to longstanding challenges.
• Despite the optimism surrounding technological innovation, the digital health industry is undergoing a period of market corrections. This has led to the shutdown of unicorn startups, signaling a reality check for the sector. The challenges faced by these startups raise questions about the sustainability of certain approaches within digital health.
• In response to the turbulent financial landscape, healthcare players are increasingly turning to consolidation and vertical integration as survival strategies. Payers are expanding into provider roles, health systems are diversifying their offerings, and even venture capitalists are contributing to the creation of fully integrated healthcare systems. This trend reshapes the industry landscape, with smaller players forced to adapt to the emergence of healthcare giants.
• While much attention has been focused on AI, augmented and virtual reality technology is quietly but rapidly making inroads into the healthcare industry. Companies like Meta and Apple are rolling out AR/VR headsets with healthcare use cases in mind. These technologies have the potential to revolutionize medical training, clinical care, and surgical procedures, offering immersive and interactive experiences that enhance learning and patient outcomes.

Why it matters: Understanding the intersection of technology and healthcare is crucial as it impacts the future of patient care, industry dynamics, regulatory frameworks, and the adoption of innovative solutions. The ongoing disruptions highlight the need for careful navigation of challenges such as safety, regulation, financial sustainability, and the integration of emerging technologies to ensure positive outcomes for patients and stakeholders in the healthcare ecosystem.

Innovator's Radar:

Here is the latest roundup of digital health financing rounds:

AMA Venture Studio Launches Cybersecurity Startup:

HEAL Security, backed by AMA's venture studio Health2047, received a $2.3 million investment to develop a cognitive cybersecurity intelligence platform tailored for the healthcare sector.

Care Continuity Raises $10M for Patient Navigation:

Care Continuity secured $10 million in a series A-3 funding round to enhance its data-driven patient navigation services, aiming to streamline patient-centered care journeys for health systems, payers, and ACOs.

CardioSignal Gains $10M for Smartphone-Based Heart Exam:

CardioSignal received $10 million in early venture capital funding to further validate its app-based heart test technology, which utilizes smartphone accelerometers for affordable disease detection.

Turquoise Health Secures $30M for Price Transparency:

Turquoise Health clinched $30 million in series B funding to expand its price transparency data services, meeting increasing demand driven by regulatory requirements for providers and payers.

Isaac Health Raises $5.7M for Brain Health and Dementia Care:

Isaac Health completed a $5.7 million oversubscribed seed round to support its virtual brain health and memory clinic platform, aimed at improving access to brain health services.

Insurtech Ansel Raises $20M:

Ansel, offering simplified supplemental insurance for individuals with various conditions, secured $20 million in funding led by Portage, bringing its total raised capital to over $50 million.

Being Health Receives $5.4M to Launch Mental Health Practice:

Being Health, a mental health practice in New York City, raised $5.4 million to provide personalized and comprehensive mental health care, offering a range of treatments including ketamine infusion therapy.

Decoding Digital Health:?

Epic has launched new third-party vendor programs, housed within the Showroom website, as a replacement for its former app market, aiming to streamline connections between health tech companies and providers.

• The programs include Supply Shop for Epic support resources, Health Grid for connecting providers with the broader healthcare ecosystem, and Workshop for co-developing technology.
• These initiatives respond to the growing demand for interoperability with Epic's software and aim to foster collaboration with vendors to develop innovative solutions aligned with healthcare provider needs.
• The revamp comes amid a surge in requests from vendors for special integrations with Epic, with over 13,000 requests in the past year alone, necessitating a more scalable approach to vendor relationships.
• Epic's Open.Epic API tool provides developers with access to industry-standard APIs and testing tools, offering a sustainable and scalable model for app development within the Epic ecosystem.

Why it matters: This marks a strategic shift in how health tech companies interact with Epic's software and healthcare providers. By streamlining connections and fostering collaboration, these programs have the potential to accelerate innovation in healthcare technology, improve interoperability, and ultimately enhance patient care experiences. Additionally, Epic's response to the increasing demand for vendor integrations reflects the evolving landscape of digital health and underscores the importance of scalable and sustainable solutions to meet the needs of both providers and patients in an ever-changing healthcare environment.

Industry Pulse:

Elevance Health commissioned a virtual healthcare study in the hopes of understanding consumers' attitudes toward virtual healthcare in a post-COVID world.?

• 75% of consumers find virtual care useful and plan to continue using it, with 73% indicating they would recommend it to others.
• 83% of consumers believe it's important for virtual care services to be integrated with their existing healthcare providers or medical records, emphasizing the need for seamless healthcare experiences.
• Prescription renewals (71%), follow-up visits (62%), and wellness visits (51%) are among the top use cases for virtual care, indicating its versatility and convenience.
• Telephone calls are the most popular form of virtual care, with video interactions being the least frequent, although video chats are preferred for behavioral health visits.
• Consumers recognize the benefits of virtual care but also have concerns about its limitations, particularly the inability to conduct physical examinations, suggesting a hybrid model combining virtual and in-person care may offer the best of both worlds.

Why it matters: The widespread acceptance and satisfaction with virtual care reflect a significant shift in healthcare delivery towards a more patient-centric model. This shift addresses barriers to in-person visits, improves access to healthcare services, and enhances patient experiences and outcomes. Demand for integration with existing healthcare providers underscores the importance of seamless care experiences, promoting continuity and coordination among professionals.

Hot Topics:

The rise of generative AI is disrupting the healthcare industry signaling broader ecosystem transformations and prompting organizations to reassess their strategies for navigating the evolving landscape effectively.

• The distinction between technology substitution and ecosystem transformation is crucial in understanding the impact of generative AI like ChatGPT, similar to Napster's effect on the music industry, which ultimately led to a new era of profitability through personalized streaming services.
• Generative AI presents opportunities for ecosystem transformation in health care, with examples including streamlined billing and claims processes, enhanced resource management, and redefined quality standards.
• Ecosystem transformation facilitated by AI requires organizational changes, such as rethinking data access and authority structures, defining new metrics, and handling increased transparency and responsibility.
• As AI redraws boundaries, traditional advantages from scale and scope may shift, leading to potential decentralization of care delivery and the creation of new synergies within and across organizations.
• Thoughtful leadership is essential in driving coordinated change, determining the organization's role in the transition to a new ecosystem, and seizing opportunities in the evolving landscape of AI-enabled transformation.

Why it matters: Recognizing the transformative impact of generative AI underscores the urgency for organizations to grasp the broader ecosystem transformations catalyzed by these technologies. As AI reshapes the healthcare sector, leaders must navigate the complexities of data integration, organizational restructuring, and strategic reorientation to harness the full potential of these innovations and remain competitive in rapidly evolving landscapes.

Data Dive:

In Deloitte’s 2024 Health Care Generative AI Outlook Survey, 60 executives across the healthcare industry were surveyed to learn more about their approaches to generative AI implementation in 2024.

Key highlights include:?

• The survey underscores healthcare executives' strong focus on data factors such as availability, reliability, and quality, with 82% prioritizing these aspects, while over 70% are concerned about regulatory compliance and data privacy.
• Despite the data emphasis, blind spots are revealed, particularly in areas like data governance (only 60% focus) and mitigating biases (45% prioritize), potentially hindering successful AI integration.
• While 63% prioritize using AI to reskill and upskill the workforce, less attention is given to addressing employee concerns and providing change management, indicating a potential gap in workforce readiness.
• The survey highlights that less than 50% of respondents focus on building trust with consumers, ensuring equitable access, and educating patients on AI risks, suggesting a need for greater emphasis on consumer-centric strategies.
• Scaling generative AI across the enterprise presents operational and technical hurdles, with a focus on deploying robust data pipelines and MLOps capabilities, while also addressing AI bias and trust issues, as revealed by the survey.

Why it matters: The survey highlights critical blind spots in healthcare executives' approach to implementing generative AI, particularly in data governance, workforce readiness, and consumer engagement, underscoring the need for a more comprehensive strategy to ensure successful AI integration that prioritizes trust, equity, and scalability across the healthcare ecosystem.

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That's all for this edition!?

The Topflight Team