Q&A: Is over investment killing digital health?

The digital health sector has advanced significantly over the last three years, but has all investment been positive? Shameem C Hameed, founder and CEO of digital health platform, blueBriX, provides insight into industry advances, why he believes over investment is killing digital health and how the sector will evolve in 2024 and beyond.

The healthtech industry has experienced rapid growth in recent years. Do you think the outbreak of the COVID-19 pandemic has been the main driver behind this digital acceleration? And how do you feel healthcare providers have benefitted as a result?

There is no denying that the Coronavirus pandemic has highlighted the value of digital health.

From the mass surge in online and telemedicine appointments to the fast approval and roll out of MRNA vaccines, the COVID-19 pandemic effectively broke down barriers of resistance to adopting new and tech driven ways of both managing and treating patients.

While there is still very much a demand for face-to-face appointments and medical support, healthcare providers have adopted more hybrid care models, which can help reduce any backlog burden through remote patient care and support - as seen with the NHS where its waiting list is set to increase to 8 million by summer 2024.

Although the acceleration in digital health bought many benefits it also affirms the issue of inequity; where those without access to smartphones or digital devices are unable to benefit from such advances in digital health.

Do you feel the growth in healthtech in developed countries has significantly improved patient experience and outcomes?

I think it’s clear to see the myriad of patient benefits that can be provided by advancing healthtech – be it improved access to medical care and support, to enabling more and more patients to be treated from the comfort of their own home through monitoring tools.

However, healthtech adoption rates are inconsistent amongst providers, with many battling a backlog of patient treatment and care as a result of the COVID-19 pandemic. As such, although it’s clear to see the positive impact of digital health, it will more clearly realised when adopted on a wider, significant, and international scale.

How do you think new and evolving technologies like AI and VR will benefit the healthcare sector and patients alike?

It is no secret that the global healthcare sector is under significant pressure – with an ageing population and an extensive backlog of care following the COVID-19 pandemic partially to blame. Therefore, creating solutions to ease workforce pressures is critical for the healthcare industry, and AI technologies hold significant promise for freeing up consultant time while improving healthcare across the globe.

According to the latest data, healthcare has a 36% automation potential, where automation and robotics can significantly reduce the time required by humans to perform many necessary tasks - as demonstrated by the following examples:

Diagnosticians and physicians require tools that can process large amounts of medical data quickly and accurately, allowing them to make more objective treatment decisions based on quantitative data tailored to the needs of the individual patient. When analyses are too difficult, time-consuming, or inefficient to perform alone, AI can help clinical professionals stay focused on their patients and better use their expertise.

In addition, AI is also being used to analyse X-ray images, for example mammograms, to support radiologists in making assessments. This frees up radiologists to spend more time with patients, or to screen greater numbers of people more quickly. Furthermore, we are also seeing an increase in the uptake of patient-monitoring apps, online symptom checks and e-triage AI tools, as well as virtual agents that can do hospital jobs, and even bionic pancreas that helps diabetic patients.

AI is also being enlisted to help diagnose patients, for drug “discovery and development,” to improve physician-patient communication, and to transcribe medical documents, where remote monitoring technology such as apps and medical devices can assess patients’ health and care while they are being cared for at home.

Ultimately, there are many ways in which AI is already benefitting the healthcare sector and patient outcomes alike, and this is only set to evolve in years to come, so watch this space.

The evolution of healthtech has resulted in the rapid growth of digital health start-ups, with the sector having received billions in VC funding in recent years. However, with many start-ups having collapsed and data forecasting the majority will fail to reach profitability until they achieve $100 million in ARR, do you believe this ‘overinvestment’ is negatively impacting the digital health sector?

The digital health market is estimated to be growing at a compound annual growth rate of around 25% from 2019 to 2025 and, given this rapid market expansion, it is unsurprising that the sector has captured the attention of many investors around the globe.

According to the CB Insights Healthcare Report Q3 2021, in Q1–3 2021 alone, $40 billion went into digital health worldwide, spanning across more than two thousand deals and 33 new digital health companies who received unicorn valuation.

While on the surface these figures might suggest a promising future for digital health, the collapse of multiple healthtech firms despite substantial funding suggests too much VC investment could be doing more harm to the sector than good.

A key example is in ‘Bright Health’, an insurtech company, was valued at $11.2 billion at its peak, cementing its status as Minnesota’s first unicorn start-up.

The business earned praise and recognition from start-up boosters and investors, and even counted high-profile figures like Andy Slavitt, who ran Medicare and Medicaid in the Obama administration, on its board of directors. However, as of the start of 2023, Bright had completely pulled out of the insurance business in all but one state. The company had exited the market for ACA plans and was instead focused exclusively on Medicare Advantage in California, alongside limited primary care offerings.

Bright Health went on to receive a delisting warning from the New York Stock Exchange and had still failed to turn a profit.

Do you believe the pressurised VC funding loop is killing healthtech innovation?

I believe that rather than VC capital being utilised to help drive growth, many healthtech firms are solely relying on funding as their only strategy to survive as a business.

While over-funding can accelerate innovation temporarily, it creates vulnerability, and start-ups become susceptible to market fluctuations and investor sentiments. Not only that, but over reliance can also create a situation where they are beholden to their investors and cannot make decisions in the best interests of their company, diminishing creativity and innovation in their wake.

Ultimately, although funding is a fuel source for innovative companies, it is no measure or guarantor of success.

What is the alternative solution for digital health start-ups looking to scale growth and make a positive impact?

The vast majority of digital health start-ups looking to scale a product and quickly would benefit significantly from leveraging existing low code no code technologies, which provide the tools to easily turn ideation into realisation and then iteration without extensive investment in development.

Not only do low code no code platforms enable digital health start-ups to easily create a viable MVP, but with the technology being pre-approved and compliant with the wider healthcare ecosystem, start-ups can easily launch and scale new products with unrivalled speed to market.

Ultimately, development of scientific solutions needs to be slow, meticulous, and deliberate because it affects human beings and not just shopping carts. However, low code no code platforms can support start-ups in this journey and enable them to explore the true possibilities in digital health, without the time, cost, and resource burden of bespoke development.

How do you foresee the digital health sector evolving in 2024 and beyond?

I think there will be two key trends to look out for in the digital health sector in 2024 and beyond.

The first is that developed countries will continue to embrace the time and cost saving benefits of digital health platforms - increasing key functions such as remote patient monitoring and at home care so that those without urgent medical needs do not take up vital resource and bed space, but still receive the care and attention required to remain stable and/or return to good health.

The second is that as developed countries continue embrace such advances in healthtech, emerging market countries will be left further behind, with healthcare providers unable to drive the digital health agenda due to tech accessibility and affordability issues. The sad reality, however, is that these are exactly the countries and regions that are set to gain the most from healthtech and so it is vital that there comes a tipping point where the cost becomes affordable and digital health platforms can improve healthcare for humanity on a global scale. Unfortunately, 2024 will not be the year that we see this vital and positive change.