October 6, 2017
PUBLISHED BY MobiHealthNews
This year was the 11th anniversary of Health 2.0, a yearly health tech conference that explores the newest in digital health with eyes for what’s still to come. This year marked the first Health 2.0 conference since the show was acquired by HIMSS, MobiHealthNews’s parent company.
With the four-day event come and gone, MobiHealthNews has collected all of its coverage from the Santa Clara Convention Center below, along with extra conference announcements and speaker discussions that might not have made it to the front page.
Digital health investors see a mid-cycle market
Executives from Morgan Stanley, GE Ventures, Kleiner Perkins, and Wildcat Venture Partners were invited to the Health 2.0 stage to speak on state of digital health care from an investor’s perspective. While each held their own particular view on the specifics, they held a general consensus that the market has moved past the initial hype and widespread investments but is still waiting for real returns — both in terms of profits and efficient healthcare delivery.
“[For] many of us, after four years the money has gone in and now we’re really building value in the healthcare system,” Lynne Chou O’Keefe, partner at Kleiner Perkins, said during the panel. “We’re at various stages of that, and I think in the next two to three years we should have a nice cycle of regular hits that come out through M&A or IPO in that cycle. So, we’re all in that critical stage right now of building value in the healthcare system.”
This kind of cycle, while typical in tech investments, has been noticeably strained when applied to the healthcare technology industry, Bill Ericson, managing partner at Wildcat Venture Partners, said. Still, all signs are pointing toward an upcoming turnaround.
“I personally believe — and I invest in pure IT too — that [healthcare IT] is 15 to 20 years behind because the complexity of the systems takes longer to shift out,” he said. “The healthcare system has more friction and as a result you expect adoption to take longer, and you have to be prepared for that as an investor in healthcare, that the cycles are longer. But we’re seeing good, really interesting traction, and we’re seeing strategics take a strong interest in the companies we’re involved in. And that’s got to happen for the field to grow.”
The panel also touched on the dual perspectives that come into play when a market is caught between healthcare and Silicon Valley. Noting that 40 percent of money coming into the digital health space has been from tech-oriented investors, Ericson said that any investor or other player coming into the complex market without incorporating both sides of the field will inevitably run into some pitfalls. Lynne agreed with this sentiment, stressing the differences that come even from monetization strategies
“Healthcare is changing in really understanding the consumer’s needs, and we find that a lot of digital entrepreneurs really [want to] start from that fundamental purpose,” she said. “Now, how they think about commercialization and how they think of that within the health system, that’s where then being on the flip side as a health care investor [and] understanding that a lot of healthcare is B2B2C, and so how you merge both of these worlds [is useful].”
Read the full article on Mobi Health News here.