Finding Genius
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The Future of Digital Health: What’s next?
There is no one-size-fits-all platform in digital health today, and it’s unlikely that there will be one for the future. The industry is complex and constantly changing. So, what does the future look like?
Remote Monitoring and Disease Management
Medicine is reaching a problem of epic proportions. By 2030, assuming there are no changes to how primary care is delivered, there will be a projected deficit of up to ~50,000 primary care physicians to meet the needs of the US population. Today, chronic disease (such as heart failure, hypertension, and diabetes) is primarily managed by PCPs, which takes up the majority of healthcare expenditures, and accounts for nearly one-fifth of our GDP. With this challenge on our hands, it will be critical for innovative digital health technologies to address efficient and rapid disease management. Remote monitoring of patients through effective disease management tools (e.g. Bluetooth-enabled blood pressure cuffs or a portable sleeve that can detect when DVT-blood clots are formed.)
Gene Editing / CRISPR
It has been less than a decade since scientists first learned how to splice the human genome in a precise and reliable way, using a tool called CRISPR. This has opened a realm of possibilities related to addressing disease-causing mutations and actually curing genetic diseases ranging from sickle cell anemia to certain types of cancer and even blindness.
As with most breakthrough innovation in healthcare, the use of CRISPR has led to heated debates from opponents who cite ethical or security concerns. On the ethics front, some believe the use of CRISPR is tampering with what nature intends and will create a society in which certain types of genetic traits are considered superior to others. On the security front, an extreme and dystopian example of healthcare data and CRISPR in the wrong hands can be seen through the concept of genome hacking. John Sotos, the Chief Medical Officer at Intel, has been hired to focus on Cancer Moonshot, a program investing in precision medicine to identify the genetic signature of a tumor and create a virus that will kill cells with that specific signature. The intended result would be a complete cure to all forms of Cancer. At a conference, Sotos shared an alternate reality in which this type of genome targeting can lead to genome hacks, in which ‘hackers could supercharge pharmaceutical sales by spreading the genes for treatable illness, induce alcohol or meat intolerance or even deafness or blindness, create a hyper-susceptibility to STDs, or sun sensitivity.’ While such radical concepts may well be fear mongering, data breaches and privacy laws around health data sharing have really come into question.
While we are still far from the scientific community feeling comfortable to use CRISPR in the US, medical professionals have already experimented with it abroad. In 2018 in China, a scientist announced that he had already used CRISPR to permanently alter the genomes of twin girls to be immune to HIV infection. Editas Medicine and Allergan recently announced a more accepted form of gene editing, one that would change genetic defects in cells that don’t get passed onto the next generation. The companies are currently enrolling patients born with a congenital vision disease into what will be the first US test to determine if CRISPR can fix a mutation in the cells of a living human body. Other ongoing trials, including one from Vertex Pharmaceuticals and CRISPR Therapeutics that is treating blood disease, rely on treating patients’ cells outside the body and introducing them back to the body so that they would outnumber the diseased cells. While the scientific and ethical application of CRISPR is still being explored and defined in its early stages, this will undoubtedly be a defining component of the future of digital health.
Direct-to-consumer Diagnostics
After the widely publicized Theranos scandal, the diagnostics industry remains to be disrupted. There are several emerging companies that are venturing to take on industry giants — Quest and LabCorp. On the genetic testing side, companies such as 23andMe.com, Helix, and Color are becoming common. On the routine testing side, niche at-home diagnostic companies like Modern Fertility (for women’s fertility) and EverlyWell (for food sensitivities) are emerging. With increased competition in diagnostics and testing, LabCorp and Quest are taking note and also entering into collaborations with other retail and pharmacy outlets to accommodate consumers. Sonora Quest, a subsidiary of Laboratory Sciences of Arizona, just launched a new service “My Lab ReQuest,” which is a DTC service including a limited menu focused on wellness health profiles. It also includes screening for allergies, diabetes, and cardiovascular health. Several trends are continuing to shape the direct-to-consumer laboratory testing market including the growing demand for early disease detection and diagnosis, personalized medicine, and the importance of remote disease monitoring.
Mental Health Management
Approximately 57 million adults had mental health or substance-use conditions in 2017, and about 70% of them received no treatment, according to federal estimates. When people do get treatment, it’s often not effective and rarely a long-term, sustainable solution. While the growth in this space has been slow, many large healthcare organizations are leading efforts to address mental health as a holistic part of their overall health. “The evidence continues to mount that mental health and physical health are intimately entwined,” said Dr. Don Mordecai, a national leader for mental health and wellness for Kaiser Permanente, where providers are experimenting with apps that connect patients and behavioral health providers.
Intermountain Healthcare, one of the nation’s largest providers, has “taken a cultural approach to normalizing mental health as part of a routine part of care. The mental health activity is not just the responsibility of the mental health staff,” said Brenda Reiss-Brennan, the health system’s director of mental health integration.
Other tools, such as Talkspace, are finding success in the digital application of mental health and counseling services. Talkspace is one of several companies, including Ginger and BetterHelp, offering low-cost, high-tech alternatives to traditional, in-person therapy visits. The emergence of therapy apps comes at a time when insurers are facing lawsuits and complaints from advocates and regulators over the persistent difficulty many people face getting care for mental health and substance abuse. As our country continues to grapple with the growing mental health challenges, health insurance companies, pharmaceutical companies, and providers will continue to innovate to ensure help is accessible to those who need it most.
Advice and Perspectives from Investors
How do investors decide what to invest in? How do they distinguish between one solution over another? And how can they tell which company will be successful? Like any other industry, finding the “next big idea” will always be nuanced and involve being in the right place at the right time. In my conversations with healthcare venture capitalists who have invested in many of the companies mentioned in this chapter, there are a few things investors look for repeatedly that have led them to invest in the right companies at the right time.
● Strong clinical validation and buy-in
● Experience and a deep understanding of the regulatory environment
● Partnerships and integration with existing incumbents is helpful
With the healthcare market being valued at nearly $3.5 trillion, there is no shortage of opportunity. As large, non-healthcare companies like Amazon, Google, JPMorgan, and even BestBuy look to enter the space, we can expect even more financing and M&A activity then we’ve seen in the past decade. With examples like Amazon outbidding Walmart to acquire PillPack (estimated $800 million) and JPMorgan acquiring InstaMed (estimated $500 million), capital is flowing heavily into startups attempting to disrupt healthcare. For entrepreneurs building in the healthcare industry, there is now a foundation for a promising path to continued innovation and disruption in this space.
Sources & Resources
Rock Health: Beyond Wellness for the Healthy, Digital health and Consumer Adoption, 2018
Automated Chronic Disease Management to Scale Care, MobiHealth, 2019
Engaging Behavioral Health Patients through Digital Tools, Modern Healthcare, 2019
How AI Could Shape the Health Tech Landscape, Healthcare Dive, 2019
RESOURCES
Books on entrepreneurship and venture capital
Secrets of Sand Hill Road, by Scott Kupor
Venture Deals, by Brad Feld & Jeffrey Busgang
Measure What Matters, by John Doerr
The Lean Startup, by Eric Riess
Podcasts worth listening to
a16z Podcast on topics of technology and venture capital
How I Built This with Guy Raz
Masters of Scale with Reid Hoffman
The Twenty Minute VC with Harry Stebbings
Resources for venture capital and building a startup
AngelList
John Gannon’s Blog
F6S: Startup accelerators, competitions, and incubators
Pitchbook & CrunchBase
Product Hunt
VC Finder: An online list of VC funds and investors and their areas of focus
Newsletters
Axios
Strictly VC
Term Sheet
Morning Brew