LAS VEGAS — This week, health and technology companies from startups to Fortune 500 powerhouses showcased their latest digital health technologies at HLTH 2023, which drew more than 10,000 individuals to Las Vegas.
Last year’s big wins focused on moving away from single-point solutions. This year, artificial intelligence has been a hot topic for investors looking for the next big bet in digital health.
But it’s unclear which use cases for AI in healthcare will ultimately prevail.
With big tech companies like Alphabet (GOOG, GOOGL), Microsoft (MSFT), and Amazon (AMZN) building out their strategies, all attending this year’s conference, startups are finding themselves We are competing against giants with deep resources to prove what we can do. Bringing meaningful change to healthcare.
That idea was top of mind for Pratyesh Maheshwari, managing director of San Francisco-based venture capital firm Maverick Ventures.
“Are we making a difference in digital health? We don’t want to undermine all the people we work with, but… is the scale of the industry having the impact we want?” Maheshwari said. Told.
This includes supporting value-based care. The idea, which has been around for more than a decade, holds that health systems and professionals have a financial stake in keeping patients healthy and should be penalized if their interventions are ineffective.
This is different from today’s mostly fee-for-service world, where every time a patient gets a blood test or visits a doctor, they incur a bill with line items for each additional service. This is particularly problematic in specialized medical treatments such as cancer treatment and dialysis, which require specialist physicians rather than primary care physicians.
“We know it’s much more. [healthcare] It feels like a problem that needs to be solved because it costs money. I don’t know if there is an answer,” Maheshwari said.
Possibilities of AI
Experts like Vinita Agarwal, general partner at Andreessen Horowitz, are bullish on AI’s potential to unlock the value problem and ease the increasing administrative burden the technology places on clinicians. It is.
“All of these use cases that we think are going to be powered and impactful by new next-generation AI models,” Agarwal said.
Significant capital has been invested in digital health over the past few years, peaking during the pandemic, especially when it comes to AI.
Rock Health, which tracks U.S. health tech investments, recorded a total of $21.4 billion in investments in AI-powered digital health since 2020. Almost half of that was accounted for in 2021 alone, with a reported value of $10.1 billion that year.
The average total investment amount is less than half of the annual amount. However, AI’s share of overall digital health investments has remained stable.
Rock Health said it invested just $2.2 billion in the first half of this year. However, as a percentage of overall digital health, investment has remained relatively flat at around 30%.
In 2021, it rose to 35%, but in the first half of 2023, AI in healthcare investments accounted for only 29% of total digital healthcare investments.
Anjalee Khemlani is a senior health reporter at Yahoo Finance, covering all areas of pharma, insurance, care services, digital health, PBM, and health policy and politics.Follow Anjali on all her social media platforms @AjKhem.
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