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What does 2019 have in store for healthcare innovation?

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February 20, 2019

Healthcare investing reached record new highs in 2018, hitting more than $30 billion across all sectors, according to numbers from Pitchbook.

The sustained growth of healthcare investment will continue into 2019 driven by trends including innovation in healthcare delivery, the use of data analytics to unlock new clinical insight, disruption of the existing pharma business model and the continued shift to value-based healthcare system, according to a new report from New York City Health Business Leaders (NYHCBL).

Healthcare investing reached record new highs in 2018, hitting more than $30 billion across all sectors, according to numbers Pitchbook cited by the report. One of the biggest magnets for investment in New York has been insuretech startup Oscar Health, which raised a cool $540 million last year, including $375 million cash infusion from Google parent company Alphabet to help it enter the Medicare Advantage market.

And while there has been sluggish exit activity among digital health startups partly due to volatility in the public markets, a few key deals like Flatiron Health’s $2.1 billion acquisition by Roche and the $400 million purchase of Syntimmune by Alexion provided some sunny news in the biopharma space.

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Among the trends identified by the report as drivers that will help the industry sustain momentum in 2019 are the growth of direct-to-consumer health companies like Ro, Capsule, Simple Contacts which circumvent the hassles of the traditional medical process with a streamlined and personalized consumer experience that a patient can access from the comfort of their own home.

New York-based Ro, has raised more than $90 million since its founding in 2017 and branched out from its initial focus on erectile-dysfunction drugs into smoking. A San Francisco-based competitor HIMS that sells sexual health medication, contraceptives, hair-loss treatments and other wellness products also recently raised a $100 million funding round that valued the company at $1 billion.

Reshaping care delivery is another trend identified by the report which ranges from the in-clinic primary care experience to telehealth to in-home visits to concierge medicine, and often all in one package. Examples include San Francisco-based One Medical which operates dozens of locations around the country, including for companies like Amazon, and Maven, a telemedicine startup geared toward women’s health.

Ultimately, these kinds of companies are related to an underlying trend of better patient engagement and care navigation to get people the right care at the right place at the right time. In part, this shift is being led by the idea of consumerization in the industry which gives patients more power over their healthcare as they correspondingly shoulder more of the financial responsibility.

“Health insurance is an area that can be much more patient friendly,” the report quotes Cedar CEO Florian Otto as saying. “Understanding patient benefits should be easier and insurers could be a more active partner in how patients consume healthcare.”

One area highlighted by the NYHCBL report as ripe for disruption is the PBM industry, which has emerged as a pressure point for federal policymakers as they try to lower drug costs. Companies looking to innovate within the space include WithMe Health, which launched out of stealth earlier this year with $20 million in funding to provide an alternative to the existing PBM heavyweights. The company was founded by a VC and investor in PBM companies who was frustrated by the lack of innovation happening at the bigger firms.

Date: February 20, 2019

Source: MedCityNews

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