Technological innovation is the key to many of healthcare's current and growing woes--including costs, an expanding elderly population and inefficiencies within the healthcare system.
Two of the most crucial ways technology will make a difference are by increasing performance and improving outcomes, according to a recent Brookings' research paper.
For the paper, Brookings researchers Ian Hathaway and Jonathan Rothwell examined the expansion of venture capital deals in the healthcare sector from 2009-2014.
Here's what they found:
- In 2014, annual VC deals were two-and-a-half times larger than 2009, and the amount invested grew about six times that of five years ago
- The areas of the U.S. that saw the most digital health VC growth include San Francisco, Boston, San Jose, New York and Los Angeles
- Digital health entrepreneurship are not necessarily coming from within the healthcare sector, such as at hospitals or medical schools, according to the report; instead, growth is being seen in places with "strong advanced service industries," such as computer system design and engineering services
- Companies in digital health in 2013-2014 also saw growth in "exit activity," which includes acquisition or an initial public offering
In fact, IPOs had a big impact on growth of digital health funding in the first half of 2015, according to reports from both Rock Health and Mercom Capital Group.
Two of the larger IPOs included telemedicine company Teladoc's offering, as well as fitness wearable maker Fitbit's June IPO.
"Venture capital activity in digital health has increased substantially in recent years and is absorbing a larger share of total deals and dollars invested in the United States," the authors said. "Digital health companies are no longer in their infancy but at already generating significant returns to both specialist investors and broader venture capital firms--signaling a sector that is moving from proof-of-concept to higher rates of expansion and implementation."
To learn more:
- here's the paper