HealthTech Horizons

What’s In This Edition:

Insight Spotlight: The ONC's proposed HTI-2 rule aims to advance healthcare interoperability by establishing voluntary certification for payer and public health IT, updating data sharing standards, and setting new timelines for implementation, garnering mixed reactions from industry stakeholders due to its ambitious scope and potential impact on healthcare data exchange.

Innovator's Radar: A roundup of health tech and digital health investments by Fierce Healthcare, highlighting notable funding rounds including Allez Health's $60 million series A+ funding for its continuous glucose monitoring biosensor platform and Tuesday Health's $60 million raise for end-of-life care solutions.

Decoding Digital Health: A study found that reintroducing cost-sharing for telemental health visits in high-deductible health plans led to decreased utilization, with patients attending 1.5 fewer visits per month and 11.7% stopping visits entirely, highlighting the impact of financial barriers on healthcare access.

Industry Pulse: In the first half of 2024, U.S. digital health startups raised $5.7 billion across 266 deals, with early-stage deals accounting for 84% of labeled raises. The digital health sector is demonstrating adaptability, with AI attracting significant attention, a tapering of unlabeled rounds, and early signs of life in the IPO market, suggesting a possible return to more sustainable venture patterns.

Hot Topics: Over 60% of hospitals plan to participate in TEFCA, up from 51% in 2022, though awareness gaps persist among smaller and independent hospitals, highlighting the growing importance of nationwide health data interoperability.

Data Dive: Arcadia and HIMSS's 2024 survey highlights the growing importance of data analytics in healthcare, emphasizing its role in improving care quality, workforce productivity, and strategic decision-making, while also revealing challenges in data usability and platform adoption.

Insight Spotlight:

The healthcare landscape is experiencing significant technological disruption, particularly in health IT and interoperability. Looking ahead, the intersection of technology and healthcare will likely see continued evolution, but questions remain about how new regulations will unfold and where the industry's trajectory will lead.

• The Office of the National Coordinator for Health IT (ONC) has proposed a new rule, HTI-2, aimed at rapidly advancing data sharing and interoperability standards in healthcare. This 1,067-page rule builds on the agency's previous HTI-1 final rule and implements provisions of the 21st Century Cures Act.

• HTI-2 establishes, for the first time, a path for voluntary certification for health IT software used by public health organizations and health plans. It introduces new standards and updates to enhance healthcare interoperability and data sharing, focusing heavily on standards-based application programming interfaces (APIs).

• The proposed rule raises the floor on the U.S. Core Data for Interoperability (USCDI) to version 4 for certified health IT by January 2028, and sets technology update deadlines for health IT developers by January 2026.

• Key stakeholders impacted include health IT developers, providers, health plans, and public health agencies. The rule aims to improve data systems and streamline processes like electronic prior authorization.

• While health IT experts view the rule as a "big step forward" for interoperability, EHR vendors express concerns about proposed compliance timelines given the scope of requirements and alignment with CMS's interoperability rule.

Why it matters:

The HTI-2 rule signifies a pivotal moment in healthcare technology, aiming to standardize data sharing across the industry. While it promises improved care coordination and innovation, the ambitious timelines and extensive requirements pose significant challenges. The industry's ability to adapt to these changes will shape the future of interoperability, potentially transforming healthcare delivery, public health responses, and patient experiences. However, success hinges on unprecedented collaboration and investment from all stakeholders in the healthcare ecosystem.

Innovator's Radar:

Here is the latest roundup of digital health financing rounds:

• Biotech sensor company Allez Health picks up $60M: Allez Health Inc., formerly known as Zense-Life Inc., secured $60 million in a series A+ financing for its continuous glucose monitoring biosensor platform.
• Tuesday Health secures $60M for end-of-life care: Tuesday Health raised $60 million to launch its supportive care solution for seriously ill Medicare patients, in partnership with Valtruis, Blue Venture Fund, Mass General Brigham Ventures and CareSource.
• Medtech health and data company AcuityMD nabs $45M: AcuityMD raised $45 million in a series B round led by ICONIQ Growth to expand its commercial intelligence platform for medical technology manufacturers.
• Eko Health captures $41M to expand AI stethoscope business: Smart stethoscope maker Eko Health raised $41 million in a series D round to help expand its commercial reach in the U.S. and overseas.
• Boulder Care takes in $35M to expand virtual addiction treatment services: Virtual addiction treatment provider Boulder Care raised $35 million in a series C funding round led by Advance Venture Partners (AVP) to meet rising demand for addiction treatment services nationwide.

Decoding Digital Health:?

A study by Included Health and Harvard Medical School reveals that telemental health visits decline when cost-sharing is reintroduced for patients with high-deductible health plans (HDHPs).

• The study examined telemental healthcare utilization of 15,000 HDHP patients during two six-month periods in 2021, comparing groups with and without cost-sharing.
• Patients in the group where cost-sharing was reintroduced paid an average of $29.50 per telemental health visit, resulting in 1.5 fewer visits per month and 11.7% of patients stopping visits altogether.
• The majority of study participants were 30-year-old white females, with varying degrees of depression severity.
• The findings highlight concerns about the potential impact of Congress letting the pandemic-era cost-sharing waiver for telehealth lapse at the end of the year.
• Included Health's chief health officer emphasizes that financial barriers significantly affect patients' access to services that could improve overall health outcomes.

Why it matters:

This study underscores the critical role of cost in healthcare access, particularly for mental health services. As telehealth continues to evolve, these findings highlight the need for careful consideration of payment models and policies to ensure equitable access to care. The potential lapse of telehealth cost-sharing waivers could have significant implications for patient outcomes, especially among vulnerable populations, and may shape future discussions on healthcare policy and the integration of telehealth into long-term care models.

Industry Pulse:

Rock Health released a report on digital health funding for the first half of 2024, highlighting resilience and measured momentum in the sector.

• U.S. digital health startups raised $5.7B across 266 deals in H1 2024, potentially exceeding 2019 and 2023 year-end totals if the investment pace continues.
• Early-stage deals (Seed, Series A, and Series B) accounted for 84% of labeled raises, with Series A activity being particularly strong.
• The prevalence of unlabeled rounds is tapering, potentially signaling a return to a more normal cadence of labeled raises.
• One in three dollars invested (34% of total sector funding) went to digital health startups leveraging artificial intelligence.
• The digital health IPO market showed early signs of life with three companies going public in Q2 2024, after a 21-month drought.
• Private equity firms are taking a larger role in digital health M&A, acquiring 10 startups in H1 2024.

Why it matters:

The digital health sector's resilience and adaptability, particularly in early-stage funding and AI-enabled solutions, indicate a potential return to more sustainable venture patterns. This trend, coupled with the resurgence of public exits and increased private equity involvement, suggests a maturing market that continues to innovate and address healthcare challenges. The sector's ability to attract investment and adapt to market conditions bodes well for the continued development of digital health solutions that can improve healthcare delivery and patient outcomes.

Hot Topics:

The rise of hospital awareness and participation in TEFCA signals a broader shift towards nationwide health data interoperability, prompting healthcare organizations to reassess their strategies for information exchange and data sharing.

• Over 60% of hospitals were aware of TEFCA and planned to participate in 2023, up from 51% in 2022, indicating growing interest in national health information exchange initiatives.
• Awareness gaps exist across hospital types, with smaller, critical access, and independent hospitals showing lower awareness and planned participation compared to larger, non-critical access, and health system-affiliated hospitals.
• HIE membership correlates strongly with planned TEFCA participation, with about 70% of hospitals in national networks or HIEs planning to participate compared to 40% of those not in any network.
• There was a substantial increase in planned TEFCA participation among hospitals without prior network involvement, rising from 10% in 2022 to 39% in 2023.
• One in four hospitals remained unaware of TEFCA in both 2022 and 2023, highlighting the need for continued education on this national HIE initiative.
• The ONC emphasizes the importance of tracking hospital awareness and participation plans to ensure equitable benefits from TEFCA across all hospital types.

Why it matters:

Recognizing the growing adoption of TEFCA underscores the increasing importance of nationwide health data interoperability in the healthcare sector. As more hospitals join this initiative, leaders must navigate the complexities of data sharing, privacy considerations, and technological integration to harness the full potential of improved health information exchange and remain competitive in an evolving healthcare landscape.

Data Dive:

In Arcadia and HIMSS's 2024 Healthcare Data Analytics Survey, 100 US-based healthcare leaders were polled to understand their perspectives on data analytics platforms and their strategic value in healthcare. Key highlights include:

• The survey underscores healthcare leaders' focus on improving care quality, with 55% identifying it as a top strategic goal empowered by data, while 30% and 29% prioritize workforce productivity and cost-saving opportunities, respectively.
• Making data usable remains a challenge, with 62% of respondents indicating cross-team collaboration as key, 58% emphasizing data literacy enhancement, and 53% prioritizing leveraging predictive analytics.
• 55% strongly agree that data analytics platforms are critical for creating trustworthy data assets, while 51% believe data analytics will be key to their organization's future success.
• 45% of large organizations (>15,000 employees) plan significant improvements to their analytics infrastructure for AI innovation, compared to 25% of smaller organizations.
• Over 80% consider data quality improvement features as must-haves in a data platform, while 65% prioritize comprehensive enterprise data solutions.
• Adoption barriers include competing priorities (48%), perceived integration complexity (37%), and lack of internal resources (36%).

Why it matters:

The survey highlights critical challenges in healthcare leaders' approach to implementing data analytics, particularly in data usability, infrastructure readiness, and adoption barriers. This underscores the need for a more comprehensive strategy to ensure successful integration that prioritizes data quality, cross-team collaboration, and overcoming operational hurdles across the healthcare ecosystem.

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