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Health tech is next big opportunity

Don Ross reports in MobiHealthNews that early-stage investors in traditional healthcare companies are certainly having a tough time these days, but ‘healthtech’ is emerging as the next big opportunity area:

“Healthtech is a complex domain, with several factors that can make or break a company. Existing contracts and relationships may have locked up a market segment. Standards of proof are much higher than in the tech world. Lack of reimbursement can kill a company. A sale often must address a multi-part customer with separate value propositions for the patient, doctor, hospital, and insurance company. Improving patient care alone is insufficient. One physician put his requirements for new technologies to me succinctly: “Will I get paid, and will I get sued?”

Melding a deep understanding of the staid healthcare world with the fast moving technology world is a key to success. Healthtech investors are particularly interested in applications of new technologies to solve old problems in innovative ways. Here are a few examples:

    • Consider a person struggling with alcoholism who feels a compulsion to drink. Traditionally, this person might call a sponsor for support. In today’s world, SMS enables instant support messages from everyone in his or her support network (OneRecovery).
    • Disease outbreaks will be tracked through social media and proximity information in mobile phones (FluPhone).
    • Doctors who work as independent contractors for multiple hospitals will carry a mobile tablet to enter patient data, bill faster and more accurately, and interface with different hospital systems.
    • New mobile applications will untether clinicians from their institutions by sending critical patient information directly to the clinicians’ mobile devices (Airstrip Technologies).

Extension of health monitoring into the home, engagement of seniors with social media and interventions to encourage changes to more healthful behaviors are other healthtech areas receiving strong investor interest.

The burgeoning health and wellness monitoring field relies on wireless connectivity and mobile interfaces. For example, mobile technology enables adult children to remotely monitor their aging parents—especially those living in another city. But to be successful, technology must be combined with a thorough understanding of healthcare issues and multiple customer motivations. Adult children worry about the safety of their parents, aging parents worry about “big brother” monitoring them, and professional caregivers must be able to give and receive relevant, accurate and timely patient information in compliance with HIPAA requirements. GrandCare Systems, for example, offers separate value propositions for each.

Mobile technologies and social media are beginning to address the isolation that many seniors experience as health limitations shrink their physical world. Except for the 18-24 age group, adults aged 55 and over are the fastest-growing Facebook demographic. As tech-savvy baby boomers age, expect to see assisted living facilities become technology centers, with mobile devices providing access and windows to the world.

Public health experts have identified improving consumer health behaviors as key to combating chronic diseases. I expect that companies using game technologies will have the greatest impact in achieving this goal. Psychological research shows that intermittent reinforcement—occasional, rather than constant or no rewards—best engages and retains attention. Consider, for example, the popularity of Angry Birds, which has sold more than 12 million copies through Apple’s App store. Successful health-focused games will likely enable health behaviors to improve as an “accidental byproduct,” as users pursue fun and entertainment.

Historically, IT companies mining for gold in healthcare dollars have often limped away with broken picks. They understood how to build great technologies but failed to understand the arcane world of health care. Today, healthtech companies that combine IT with deep healthcare domain expertise are expected to become the big success stories of the future. As our healthcare system evolves and adapts, healthtech companies will be center stage.”

Don Ross is managing director and founder of HealthTech Capital, an angel investing group that funds and mentors early-stage companies in the emerging healthtech domain.


About Margaret Gold

Margaret is an innovation and business launch specialist in the mobile industry, one of the organisers of Over the Air (the annual mobile developer hack-a-thon event), and the founder of The Mobile Collective.


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