Industry outsiders will reinvent healthcare according to a report published by technology investors Mangrove Capital Partners.
Healthcare Reimagined highlights that of the top 50 medical apps by revenue, only five (10%) were founded by doctors. Meanwhile of the top 50 medical apps by monthly active users (MAU), none were conceived and built by doctors.
Mangrove has made a number of investments in the digital health space including women’s health app Flo.
In its report, the venture firm describes healthcare as ‘archaic, capital intensive and, in many ways, broken.’ It cites rising costs, a dependence on a corrective rather than preventative approach and a ‘painfully disjointed patient experience’ in its critical assessment of the sector. The report highlights how the industry is now moving from a structure that treats sick people to one which, through AI, is predicting and preventing illness and disease.
The firm also argues that healthcare is ‘best revolutionised from the outside and not from within’ and that those from outside of the industry are ‘more readily able to conceive patient-centric solutions’. It explains how the fastest growing health start-ups are circumventing traditional healthcare, often putting off regulatory approvals until mainstream adoption has been achieved.
David Waroquier, partner at Mangrove Capital Partners and board advisor at Flo Health, said: “The idea that you need to be a clinician to build a successful digital health business is a complete fallacy. In fact, it is more likely a hindrance than a help. Quite simply, we are going to have to get used to the idea of entrusting our health to tech companies.”
Not everyone agrees. Lydia Yarlott, co-founder of Pando Health and NHS paediatrician wrote in an article ‘The best healthtech startups are founded by clinicians,’ said: “There’s a reason why healthtech is behind other technology sectors — there’s more at stake if you get it wrong. Models that apply to other industries can be unhelpful, or even downright dangerous.”
The report also highlights the rise of digital therapeutics (DTx) - software-based interventions that are proven to have a direct impact on an illness or disease. Examples include Mangrove portfolio company Happify Health, which recently partnered with Sanofi. The DTx market is still in its infancy but is expected to be worth more than $32 billion by 2024 according to Juniper Research.
As well as making treatment far more accessible for patients, DTx create new revenue streams for pharmaceutical companies at a much lower cost than their traditional products (as software can be distributed much more efficiently than medicines). DTx also give pharmaceutical companies access to data from patients that can be used to improve treatment or create new products.
