Digital health funding expected to reach $6.5B by 2017

Funding for digital healthcare startups in the U.S. is expected to double to $6.5 billion by the end of 2017, according to research from Accenture.

Funding has grown at an average annual rate of 31 percent since 2008, and the estimated $2.8 billion last year is expected to rise to $3.5 billion in 2014, according to the report.

Between 2008 and 2013, investors pumped $10.2 billion into startups for digital health solutions addressing four market segments:

  • Infrastructure capabilities, such as interoperability and health analytics, which attracted $2.9 billion
  • Engagement solutions, such as wearable technology and incentive programs, drew $2.6 billion
  • Treatment tools such as telehealth landed $2.6 billion
  • Diagnosis technology like remote monitoring captured $2.1 billion

"Healthcare leaders will need to embrace digital capabilities, not only to stay relevant to consumers, but to influence behavioral change, improve access to care channels and reduce per patient costs," Dipak Patel, managing director of Accenture's patient access initiatives, said in an announcement.

So far, docs aren't totally sold--especially when it comes to data from wearables. They worry about the accuracy of that data as well as its privacy and security.

Rock Health recently reported, however, that digital health investment in 2014 is on pace to break another record this year, with $2.3 billion raised in 2014's first six months.

Draft guidance from the U.S. Food and Drug Administration lowering the burden on developers of medical device data systems is expected to allow developers to focus on improving interoperability. That follows guidance last fall that it would focus only on mobile medical apps that pose the greatest risk to patients. The latest guidance furthers the notion that it's handing off regulation of health IT management to the Office of the National Coordinator.

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