This Week: Digital Health Venture Capital Funding Levels Off

This Week: Digital Health Venture Capital Funding Levels Off

- April 19, 2019

Catch up on digital health news.


Survey Identifies A Coming Surge in Telehealth Adoption

A recent survey completed by American Well has found that by more than half of the physicians (61%) within the U.S. not currently utilizing telehealth services plan to adopt the technology by 2022. The survey demonstrated that physicians who have previously resisted adoption have grown increasingly willing to introduce services like video and phone appointments to their practices. For physicians who have already begun using telehealth services, many were willing or actively seeking to implement increased telehealth practices. In a public statement, Slyvia Romm, M.D., vice president of clinical transformation at American Well stated: “Physicians’ increased willingness to see patients over video, in addition to the increasing physician shortage, high burnout rates, and a more favorable reimbursement landscape, signals a boom in virtual visits over the next several years. It’s exciting to be a part of such a significant movement.” The survey saw a high correlation between a willingness to adopt telehealth services and reports of physician burnout.

WHO Releases Digital Health Recommendations
On Wednesday, the World Health Organization (WHO) released its first guideline on technological interventions in the global health care industry. The guideline lists 10 recommendations on how industry plays can leverage health technology to improve wellness through various health care systems. According to WHO, the guideline was formed out of a “critical evaluation of the evidence on emerging digital interventions that are contributing to health system improvements.” Among the various recommendations, the guidelines advises the implementation of provider-to-provider and patient-to-provider telemedicine services. In a public statement, WHO Director-General Tedros Adhanom stated: “Ultimately, digital technologies are not ends in themselves; they are vital tools to promote health, keep the world safe, and serve the vulnerable.”

Digital Health Venture Capital Funding Levels Off
After reaching a record level of venture funding in 2018, digital health funding has dropped by 19% compared to the first quarter of 2018. With a total of approximately $2 billion raised in 148 deals, funding levels are still on a relative upward trend. However, a recent Venrock report suggests that the dip in funding may highlight an increasingly difficult field for early-stage companies. An analysis report completed by Mercom Capital Group outlines and assess the ongoing shifts in the digital health market. In a public statement, Raj Prahbhu, CEO of Mercon Capital Group notes that: “Funding levels were down compared to last year in digital health in the absence of larger deals. M&A activity was also flat,” Raj Prabhu, CEO of Mercom Capital Group, said in a statement. “However, digital health public equities experienced a turnaround in the first quarter of 2019 with 66% of them beating the S&P 500 compared to the last quarter of 2018 when 63% of the equities we tracked performed below the S&P 500. Favorable market conditions have prompted several companies to announce IPO plans.”

Google Disbands AI Healthcare Advisory Board
Google is actively dismantling an advisory board previously tasked with reviewing the company’s artificial intelligence solutions in health care. The disbandment comes after reported disagreements on how to self govern and set guidelines. Recently, government organizations, public leaders, and technology experts have called on tech companies to develop more structured guidelines for the rapidly advancing technology. The European Commission has recently proposed a set of AI ethical guidelines for tech companies to follow. While Google has been implementing surveillance and management of the technology in house, the recently disbanded board joins a growing list of dismantled oversight review boards.

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