Editor’s Note: A Guest Post by Dave Chase
Dave Chase, CEO of Avado.com, a leader in patient portals and relationship management, shares his insights on the dynamic growth of digital health investments. Previously, he served as a management consultant at Accenture’s healthcare practice and founded Microsoft’s Health platform business. He is also a member of the White House Roundtable on Patient Access. You can follow him on Twitter: @chasedave.
The Torrid Pace of Growth
After investments in digital health doubled from 2009 to 2011, the pace of growth has remained intense throughout the first half of 2012. Rock Health’s founder, Halle Tecco, issued a report highlighting this surge, noting that venture funding in the space has increased significantly. She remarked: "The impetus of this report was the notable growth in venture funding of digital health—so much so that we are seeing a 73% increase in investments compared to the same time last year." This observation underscores the growing importance of innovation and entrepreneurship in the field, as well as the need for clarity on the current landscape.
The Digital Health Investing Landscape
Key Drivers of Growth
The surge in investments can be attributed to several factors. The rise of big data has opened new avenues for innovation, enabling companies to leverage vast datasets to improve patient outcomes and streamline operations. Home health care has also seen significant growth, driven by the increasing demand for remote monitoring and telehealth services. Physician tools and sensors have emerged as critical areas, with advancements in wearable technology and medical devices creating opportunities for new applications.
Regional Focus: The Bay Area Dominates
The Bay Area remains a hub of digital health innovation, accounting for over $180 million in deals during the first half of 2012. This regional dominance reflects the concentration of talent, capital, and strategic focus on this collaborative ecosystem. Beyond the immediate financial impact, the investments are signaling a broader trend toward disruption across the industry.
Main Investment Buckets
The primary buckets of investment include:
- Big Data: Companies leveraging advanced analytics to improve decision-making and patient care.
- Home Health: Innovations aimed at enhancing remote monitoring and improving the quality of care for patients in their homes.
- ** Physician Tools and Sensors**: Developments in wearable technology and medical devices designed to enhance physician workflows and patient engagement.
Notable Investors
While mainstream media has been captivated by the legal implications of the Affordable Care Act, venture capitalists are focusing on digital health as a strategic opportunity. Key investors such as Intel Capital, Kleiner Perkins, and GV (formerly Google Ventures) have made significant commitments to the sector, underscoring its growing importance in the healthcare ecosystem.
Conclusion
The surge in digital health investments is a testament to the field’s potential for transformative change. As the industry continues to evolve, maintaining a strategic focus on innovation and sustainability will be essential for sustaining growth. Dave Chase’s insights provide valuable context as we navigate this dynamic landscape.
