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Digital Health

Digital Health Summit 2019

Click here to download the slides presented on the day

On 16 May we shared our research on the health tech sector and showcased leading entrepreneurs dedicated to evolving the patient journey.

From prevention and wellness to pre/post diagnosis, treatment and beyond, technology has a part to play in how we transform the services and products related to our race in birth, life and in death. Innovations across the sector have also led an extension of new offerings across ancillary industries such as insurance, data, property and consumer goods and services.

Following the digital patient journey we explored key players disrupting the space and the remaining areas we know are ripe for further innovation and adoption. See our write up on the day below!

Digital health is focus sector for Talis Capital, as we take smart money from our unique investor base to fund and fuel the companies of the future. Our definition of digital health is using technology to digitalise the patient journey with the aim of improving the delivery, payment and or consumption of care. At the Digital Health summit, in the inspiring Science Museum, we explored the aspects of prevention, diagnosis, treatment and data that are being fundamentally changed by technology.

This is a market that is growing rapidly and 2018 was the fourth consecutive year of increased investment.[1] Macroeconomic trends, including aging populations are driving increased spending in healthcare, while at the same time there is a global problem of patient demand outstripping supply of medics.

[1] StartUp Health Insights 2018 Review - https://www.startuphealth.com/insights-reports

Martin Shen, President of Tencent Trusted Doctors,

Dr Shen gave a fascinating insight into the scale of the opportunity in China, where Tencent Trusted Doctors is the country’s largest integrated healthcare provider with 440,000 doctors. TTD’s mission is to leverage technology to provide high quality healthcare that is accessible and affordable to everyone. They want to improve access and bring the price down for example offering a full blood count for roughly £2. Although TTD confirmed has no plans to come to Europe, because the addressable market in China is simply so huge, the lessons it learns building an affordable hybrid system of healthcare in tech that incorporates online and offline aspects could be instructive for all markets. From vending machines from which patients can get testing kits to health kiosks that take vital signs, before video consultation with the doctor, there are many innovations that could improve delivery of primary care.

Prevention and Wellness panel

Demand (of patients) outstripping supply (of GPs) was a recurring theme of the event, the prevention and wellness panel considered ways through which people could take better care of themselves - ultimately avoiding recourse to overstretched primary care services.

Michael Heinrich, founder and CEO, of Oh My Green said that his scaling business, inspired by his German grandma’s organic garden, delivered healthy food to workplaces because the main way to improve poor health was through nutrition. Obesity, diabetes, stress and cardiovascular disease are the main killers in the US, with deaths from diabetes predicted to increase by 25% in working-age adults[1]. The cost of treating this nationally is expected to reach $4.2 trillion by 2023 unless something is done to prevent this. [2]

Physical health is not the only problem. Prolonged stress costs US businesses $300bn per annum and has been identified as the possible catalyst for many serious illnesses, both mental and physical[3]. By encouraging people to reduce their stress levels, Lavinia Ionita, Akesio co-founder and CEO, believes there could be major health benefits. Another company, Spill, helps employers offer their staff therapy-based solutions to life problems.

Pre- and post diagnosis panel

Primary care was described as the front line in the patient journey, made worse by a global shortage of health workers. Tools to help patients navigate this better or GPs organise their resources better were explored during this panel. Andrew Gardner, CEO of Doctorlink, said that within the NHS, patients and doctors were pushing the take-up of digital services. GPs are now having to look after more than 10,000 patients each, with 40% of these appointments deemed as unnecessary[4]. Technology that can shift patients to other care services or to self-care could have a huge impact on this resource problem. When it comes to staff shortages, technology can also help. Kheiron Technologies uses deep learning to assist radiologists to in reading mammograms. Another company developing tech to help diagnose conditions is Feebris. Using AI, it can bring expertise to isolated communities and identify diseases that are treatable. This is especially important since there is a global shortage of 7m health workers, ageing population, and 5 million yearly deaths of children under 5. [5][6] Your.MD is helping patients manage their own health better. The app helps patients find their route to self-care, thereby alleviating the burden of people making non-essential GP visits. Another tech company dedicated to managing overstretched resources is Lantum, which works closely with the NHS, having been identified early on to join an NHS Innovation accelerator.

Data, insurance and security panel

Underlying the entire journey is the opportunity for data to unlock new efficiencies and insights. Rinicare is a Manchester-based start-up which analyses the 15m pieces of data a day that are recorded for each patient in intensive care. By collecting and processing this data, it’s possible to predict post-surgical complications before they happen. With some predicting a 300% growth in healthcare data between 2017 and 2020[7], it’s clear that we are entering a new era of health monitoring. With huge increases in data, the need for security is greater. Dave Palmer, head of technology at Darktrace, said healthcare and hospitals were certainly under threat from cyber-attacks and breaches, a problem that is likely to worsen as we increasingly move towards cloud solutions. Healthcare is a big target because it has out of date systems and tiny IT teams.

Using technology to anticipate problems was a recurring theme of the day. Stephanie Eltz, is CEO of Doctify, a website where patients can search and book doctors. Insurance companies want to use technology to provide a better experience for customers but also want to begin analysing the data that is collected from wearables and IoT devices.

Having the computing power to analyse the terrabytes of data that could be relevant to a patients’ health will continue to be a challenge. Cambridge-headquartered Congenica is working with the UK’s pivotal 100,000 Genomes project, as well as China’s 100k Wellness Pioneer Project on this. The company has raised $23m and is developing a platform to analyse the vast amounts of data that come from mapping the genome.

Treatment

Continuing this theme of using technology to improve the digital patient journey, the following companies are pioneering in this $200bn market.[8] Medbelle is the first end-to-end digital hospital, operating in the UK’s self-pay market. Current Health captures data insights to monitor patients at home, post operation and is working mainly in the US. Using that data set, it can predict who is at risk. Digital Surgery is developing a data structure that makes it possible to measure the surgical process, compare it and work out which is the best way to operate on particular types of patient. This information can then be used to train surgeons. The company’s first product, Touch Surgery, provides 2.5m users with 150+ online training simulations. Meanwhile Oviva is a startup that is working on preventative healthcare, by changing patient behaviour to prevent diabetes. This is a pressing issue since the cost of treating diabetes is expected to rise to £13.5bn over 15 years.[9] Mark Jenkins, co-founder and MD predicted that in five years, 90% of diabetes care would be digital.

From Life to Death

From managing your reproductive health to funeral services, delivered digitally, we discussed the healthcare journey from life to death, as well as taboos surrounding death and euthanasia. This discussion was about each of us taking shared ownership and responsibility of how healthtech can be used across all phases of our lives. The panellists were a diverse mix from the consumer demanding better knowledge and information about funeral services e.g Beyond or the desire of consumers to take control of their health through informed, preventative care with Adia Health and Health & Her. The use of sensors and technology in looking after an aging population was covered by OxeHealth, which makes sensors that measure vital signs in a non-invasive way and Elder, which is a platform that provides live-in care for loved ones.

Ian Strang, founder and CEO of Beyond - a modern digital brand which helps people find funeral services - described how people are rejecting the traditional funeral product and moving towards more of a “celebration of life” offering highly curated and bespoke choices.

Investor panel

In 2018 VC funding in Digital Health reached almost $15bn.[10] Each investor on the panel including Northzone, Anthemis, Invoke, Draper Esprit and Talis Capital provided their views on why now could be a good time to be investing in the sector. Even for investors not specifically focused on healthcare there are key indicators they look at to assess value. These include the quality of the team, the total addressable market, the unit economics, traction and the ability to execute with leading technology is there.

The US is taking the lead in digital health investment but 4 of the top 5 digital health deals outside the US were in China, one in Canada and the UK isn’t too far behind.

It’s an exciting time for ventures focused on using technology to disrupt this colossal sector and we can’t wait to see the changes that are inevitably going to shift the whole industry into new realms.

[1] https://www.who.int/chp/chronic_disease_report/media/uk.pdf?ua=1
[2] http://assets1c.milkeninstitute.org/assets/Publication/ResearchReport/PDF/Checkup-Time-Chronic-Disease-and-Wellness-in-America.pdf
[3] http://www.bbc.com/capital/story/20180502-how-your-workplace-is-killing-you
[4] https://practicebusiness.co.uk/nhs-gps-call-for-digitisation-of-healthcare-to-support-growing-pressure/
[5] https://www.who.int/mediacentre/news/releases/2013/health-workforce-shortage/en/
[6] https://www.unicef.org/mdg/childmortality.html
[7] https://www.emc.com/analyst-report/digital-universe-healthcare-vertical-report-ar.pdf
[8] https://healthcarebusiness.co.uk/global-ageing-population-growth-set-to-drive-200bn-demand-for-healthcare-infrastructure/
[9] https://www.theguardian.com/society/2012/apr/25/diabetes-treatment-bankrupt-nhs-generation
[10] StartUp Health Insights 2018 Review - https://www.startuphealth.com/insights-reports
 

How Technology is Fixing the Broken Patient Journey pt ii

How Technology is Fixing the Broken Patient Journey pt ii

A digital disruption of the healthcare sector - Part II

To recap, in Part I of this blog post I reviewed how inefficient the healthcare sector today is and provided an overview of the specific areas that are ripe for disruption.

In this second and concluding part I’ll reveal some of the companies who are redefining the sector and what tools they’ve brought to market to transform the digital patient journey. From prevention to detection, to treatment and monitoring, the digital health space is very broad. After months of research we’ve only just scratched the surface and that’s what makes the sector so interesting for me. Healthcare as we know it has entered a real revolution which is super exciting, so here’s my pick of the subsectors, the innovations and pioneers leading the change.   

***

Consumer Apps

There’s almost an infinite number of health-related consumer apps on the market, spanning a broad range of subsectors: general wellness, fitness, sleep, fertility, DNA, microbiome, nutrition. Often, they are matched with a relatively low-cost hardware device or testing kit.

Digital health is promoting the move to a more preventative focus, rather than a treatment-led approach to patients. I am thrilled by the prospect of people having the power to manage their own health and be in control of their health data.

Application Cancer
“Research suggests that only five percent of cancers are hereditary. That means the non-inherited causes of cancer — the lifestyle choices we make, the foods we eat, and our physical activity levels — have a direct impact on our overall cancer risk” (1) it’s truly inspiring to think of the positive consequences on lives, public spending and the pressures on the sector if we were able to reduce cancer cases, simply by using apps on our phones.

Application - Fertility
“Around 1 in 7 couples globally have difficulty conceiving: this is 3.5 million people in the UK(2).” Fertility solutions and femtech in general presents a huge opportunity. It’s an intricate subsector which has been navigating many lifestyle trends including better awareness of conditions, the confidence to discuss problems and cultural shifts like more women choosing to have a family in their late thirties or forties.

Key Considerations:

  • Every human is intrinsically a little lazy. Despite the current growing trends on prevention, incorporating a B2B2C strategy is advised, ensuring lower CAC.

  • The testing itself will get commoditised. It’s the insights and recommendations that are extracted from raw data that present the real monetisation opportunity.

Ones to watch in apps

Consumer Wearables and Connected Sensors

This category sometimes overlaps with the Consumer Apps, but I interpret it as less preventative and more focussed on tracking metrics in the post-diagnostics stage.

These devices tackle the important issue of distance from point of care and address the real need of patients to be monitored post diagnosis. They are definitely in the painkiller/must-have category rather than in vitamins/nice-to-have one.

Key Considerations:

  • Tech giants e.g Apple with their newly FDA-approved heartbeat tracking watch need to be monitored closely

  • Also, the space is crowded with incumbent medical device companies holding significant market share and with deep pockets (Roche, etc.)

  • Patent your device. Build a defensible software around it. Avoid the word “hardware” at all costs in VC conversations

Ones to watch in wearables & sensors

Patient Information Collection Tools

Did you know that clinical trials last on average 7.5 years and cost pharma companies up to $2 billion? It is a huge market valued at $65 billion in 2018 (3).

Clinical trials are costly and it’s extremely difficult to find the correct sample of patients. It is also a must-have in the industry because clinical trials obviously contribute towards finding a cure to serious illnesses.

Key Considerations:

  • The use and protection of data is a delicate matter. Some platforms are focussed on giving data back in the hands of patients, who receive a “salary” for disclosing their personal metrics to pharma groups

Ones to watch in patient information and tools

Telemedicine and Digital Hospitals

Telemedicine is obviously revolutionary, given the average time to get an appointment with a GP in the UK can be in the weeks’ range.

These platforms solve the distance from point of care issue and increase time efficiency and revenue for doctors. The primary care sector has been historically very well-funded, while the platforms for secondary care (generalists and specialists) will present a great opportunity for venture capitalists (hello high AOV!).

Key Considerations:

  • Have always a patient-first approach. This represents the real treatment stage, and there’s no margin for mistakes

Ones to watch in telemedicine and digital hospitals

Connected Virtual Assistants

We all know Amazon Echo, Google Home etc. The sector is risky for young start-ups and crowded with powerful tech incumbents. Google is also planning to serve seniors through Nest, helping them to live independently or as long as possible.

However, there are new types of assistants that are emerging in the market and represent an exciting opportunity:

  1. Gamified fitness products that fit into the wellness space

  2. Powerful machine learning software aiding doctors in detecting cancer and abnormal cells

Ones to watch in virtual assistants

Health data-hubs

These companies help overcome the fragmentation of health information, which can affect patients’ care when it leads to lack of communication and coordination. More information leads to more accurate therapies which can be tailored to each individual and contribute to a patient-centric system. In addition, given the data sensitivity issue, there is perfect applicability for blockchain projects.

A few of these companies are: Doc.ai, which allows individuals to collect and own all their health data onto their platform, Repositive, which holds the biggest collection of cancer models in the world, and Shivom.io, whose intent is developing the world’s largest DNA data and healthcare services platform powered by blockchain technology.

***

The digital patient journey is complex and touches many verticals not covered in this blog series. There are workflow collaboration tools, innovations in the healthcare insurance space, respiratory care, diabetes management, and many more sub-verticals we’ve been exploring.

Traditional healthcare is being disrupted at each point of the value chain and whilst there will be winners and losers, I’m excited to be part of the process and watch closely how technology will bring more efficiency, increased accuracy in diagnosis, better treatment and quality of life for patients worldwide.


Keen to hear more of our research in this space?

Join us on 16 May for our half day Digital Health Summit hosted at Illuminate, Science Museum.

Reserve your place now.

Beatrice Aliprandi - Senior Analyst - @bealiprandi   

Beatrice joined Talis Capital in 2018 after spending three years working at Jefferies in their Investment Banking division, where she has been involved in several transactions primarily in the Technology, Media and Telecoms space with a combined value of c.$4 billion.

Beatrice holds a MSc in Risk and Finance from The London School of Economics and a BSc in Business Administration from Bocconi University. She speaks three languages and loves travelling, mindful meditation and wine tasting.

(1)    Prevent Cancer Foundation: https://preventcancer.org/education/preventable-cancers/ 
(2)    NHS Website: https://www.nhs.uk/conditions/infertility/ 
(3)    CB Insight: The Future Of Clinical Trials: How AI & Big Tech Could Make Drug Development Cheaper, Faster, & More Effective

How Technology is Fixing the Broken Patient Journey

How Technology is Fixing the Broken Patient Journey

A digital disruption of the healthcare sector - pt i

The global healthcare sector is notorious for being expensive and inefficient with traditional providers struggling to cope with modern day industry dynamics. In this two-part blog series Beatrice Aliprandi shares her research and views on a broken healthcare sector and how technological innovation is serving up the true remedy.

Part 1
Key challenges faced by the healthcare sector today are:

  • Aging and growing population

  • A system focussed on treatment rather than prevention/health maintenance

  • Minimal penetration of new technologies

  • A bureaucratic sector, sluggish in reacting to change

The healthcare sector desperately needs a technological revelation to help digitalise the patient’s journey, bringing with it; efficiencies, automation and a focus on prevention rather than adhoc treatment.
— Beatrice Aliprandi

As well as these general industry developments, there are specific healthcare challenges in the UK alone. The over-65 UK population is estimated to reach 25% by 2044, compared to 14% just 40 years ago. NHS public spending represented 30% of the UK budget in 2015-2016 (more than £125 billion), compared to 11% in 1955-56(2). These trends combined are putting significant pressure on the UK health service rendering their care unsustainable in the long term. The UK is not alone with most European countries are also battling with similar issues.

Life Expectancy of World Population in 1800, 1950 and 2012(1)

Life Expectancy of World Population in 1800, 1950 and 2012(1)

As population increases and ages, it is natural to ask ourselves if there will be healthcare resources to meet the growing demand? In the majority of Western Europe there are between 30 to 40 physicians per 10,000 population, dropping to 20-30 in the UK and in the US, with significant uncertainty as to whether this proportion will be maintained in the future as the population evolves.

Global distribution of the health workforce (per 10,000 population)(3)

Global distribution of the health workforce (per 10,000 population)(3)

The healthcare sector desperately needs a technological revelation to help digitalise the patient’s journey, bringing with it; efficiencies, automation and a focus on prevention rather than adhoc treatment.

McKinsey Global Institute industry digitalisation index (4)

McKinsey Global Institute industry digitalisation index (4)

From a funding perspective, volumes are strong with $3.4 billion invested in digital health just in the first half of 2018(5), but the sector has been lagging behind other more mature technology subsectors, with 75% of funding rounds concentrated at Seed to Series B stage. This also clearly proves there is a growing opportunity for Venture Capital firms funding early stage innovations.

A significant amount of my time has gone into mapping out the sector, meeting brilliant and passionate entrepreneurs and reading research. The sector is broad and innovations are in their infancy at each stage of the patient’s journey:

healthcare_innovations.JPG

In turn, there are several tools addressing each of the above stages:

1.       Consumer apps

2.       Consumer wearables and connected sensors

3.       Patient information collection tools

4.       Telemedicine

5.       Connected virtual assistants

6.       Health records data-hub

For each category of tools addressing stages of the patient journey, I have gathered my thoughts, pros and cons, and best investment strategies, which I will reveal in Part 2 of this blog (stay tuned)!

In summary traditional healthcare cannot sustain current spending patterns and volumes. There is a critical need to create more efficiencies and focus on prevention rather than disease treatment. Despite the macro pressures and industry specific challenges, there is a huge untapped opportunity in the health-tech sector leaving a blank canvas to savvy and passionate entrepreneurs who can genuinely add value and take the sector to the next level.

It’s an exciting time for the sector and it’s easy to get drawn into these innovation offerings, so to sufficiently evaluate the opportunity- here are my 5 Top Tips for those looking at start-ups in this space;

Beatrice Aliprandi - Senior Analyst - @bealiprandi   

Beatrice joined Talis Capital in 2018 after spending three years working at Jefferies in their Investment Banking division, where she has been involved in several transactions primarily in the Technology, Media and Telecoms space with a combined value of c.$4 billion.

Beatrice holds a MSc in Risk and Finance from The London School of Economics and a BSc in Business Administration from Bocconi University. She speaks three languages and loves travelling, mindful meditation and wine tasting.

(1)    Life expectancy data from Gapminder.org, interactive data visualisation at OurWorldinData.org; CBInsight: “Healthcare in 2025, 2035”
(2)    BBC: “10 charts that show why the NHS is in trouble” (8 Feb 2017); data from ONS
(3)    World Health Statistics 2010; CBInsight: “Healthcare in 2025, 2035”
(4)    Mckinsey Global Institute: Digital America: a Tale of the Haves and Have-Mores (December 2015)
(5)    RockHealth: 2018 Midyear Funding Review (July 2018)