Here’s Why Healthcare Startups Are Blowing Up their Industry & How They Destroy the Competition
Startups in the healthcare space have inundated the market the last few years, from those companies transforming digital health record management to others that focus on improving the patient experience. In Phoenix alone, we have seen a glut of promising new technologies that include well-funded businesses and their lesser known but no-less-interesting counterparts. Nationally, venture capital in the amount of $4.1 billion was given to digital healthcare companies in 2014; other studies have overall funding for these companies at $6.5 billion. Regardless the message is clear: new and innovative digital healthcare solutions have become not just a startup trend, but a national one. And here’s why.
Your healthcare story is personal
Nothing feels as personal as you or your loved one’s medical care. We want to know that we are in capable and nurturing hands, from the greeting of the front office administration to the disposition of the nursing staff to the expertise of the doctors and surgeons. We want to know who they are as professionals because they do (or will soon) know all the intimate details of our lives, our bodies, and our minds. We literally entrust them with our personal well being. Moreover, our experience should simultaneously reflect and respect the value we place on our health and our own willingness to spend whatever it takes to maintain it, for ourselves or for those whom we love. It is literally why businesses like Health Grades exist and have thrived; locally, it’s why healthcare startups like The Medical Memory are focused on bringing about more personalized and engaging patient experiences.
We also want to feel more in control of our health, which has given rise to digital health management and EHR solutions. We use applications such as WebMD to pseudo “self” diagnose illnesses and get out ahead of them; we adopt wearable technologies like FitBit to better understand the value and volume of exercise in relation to our health; we look at innovative digital portals like PHR+ to connect traditionally-disparate sources of information into a more cohesive record of our health. These options all bring some semblance of order - and mostly peace of mind - with regards to our wellness.
Your healthcare experience needs modernization
If there is one industry that has lagged behind its counterparts, it is indeed the healthcare field. Providers have challenges adopting new solutions through their bureaucratic machines due to implementation, reimbursement, and HIPAA / other security and safety regulations. Patients have long had a hard time understanding and navigating the complex system of insurance providers, medical professionals and personal health management options. Add the layer of an e-commerce world where we have access to on-demand services with the swipe of a smartphone app, and you have the rise of solutions that offer what Tim Chang calls “radical convenience” for everything from prescriptions and appointment setting to doctor visits and more.
In addition, technology poses additional opportunities to streamline on the provider side of the equation by allowing them to reduce costs while simultaneously providing a better overall patient experience. eVisit is a perfect example of that; their mission is to leverage “technology to simplify complicated clinical workflows and to empower doctors and extenders to strengthen their existing doctor-patient relationships.” Through its digital telemedicine platform, the company claims to increase revenue for practices by an average of $21,000 per year and “improve[s] outcomes” for patients. eVisit and their team acknowledged a cumbersome problem and gap within the industry and has addressed it through its products.
Your healthcare journey can be monetized
Health care is expensive...duh. Insurance premiums, medical copays, out-of-pocket costs, prescription medicines can all add up to big dollars for you and your family. Much like the anchor of student debt, medical bills can weigh down even the most financially stable person. This has presented great opportunity for companies to emerge in the market that offer alternatives that drive down costs for both providers and patients. In addition, as noted before, startups in this space are being funded. Although down slightly from the previous year, digital health companies still accrued investment in excess of $5.8 billion in 2015; big name corporations like Google and IBM have also bet big on healthcare innovations through some of their own venture investments.
The big question: In such a crowded and growing market, how are the successful health IT companies beating out their competition? A few key takeaways emerge:
Early adoption is great, but they play for the long game
They know (and maneuver within) their HIPAA requirements and other regulations inside and out
Their marketing reaches the multiple decision makers within healthcare systems
They built the right team which aligns with the right investor(s)
They have identified and validated the problem; they understand the competition; and they crush their value proposition
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