- Mobile health came out on top as the most invested in health IT solution in 2016, and the industry saw general growth of mobile health IT initiatives.
The Mercom Capital Group released its annual funding and mergers and acquisition activity report for health IT and digital health for 2016.The report covers venture capital funding of global health IT technology across healthcare organizations of every size.
The health IT sector saw $5.1 billion of venture capital (VC) funding including private equity and corporate venture capital in 2016, compared to $4.6 billion in 2015, which is a yearly high for health IT.
“Venture Capital funding bounced back after declining in 2015,” commented Raj Prabhu, CEO and Co-founder of Mercom Capital Group. “Digital Health public companies on the other hand continue to struggle.”
Source: Mercom Capital Group
Health IT VC funding has grown substantially since 2010 with the biggest year-over-year growth period observed between 2013 and 2014. The past year saw nearly a half billion dollar growth over 2016 after an initial dip between 2014 and 2015.
While the number of deals in 2014 was higher than the number of deals in 2016, VCs in 2016 spent more money on projects and funded larger health IT initiatives than in the last several years.
The most significant difference in change in invested technologies in 2016 over 2015 was mobile health IT initiatives with mobile health and telehealth both nearly doubling in funding over last year.
Mobile health includes the use of wireless technology such as laptops, tablets, and smartphones to enhance patient care and improve outcomes by giving clinicians ubiquitous access to secure health data. Healthcare organizations and VCs recognized the value of wireless technology for clinicians and nearly doubled their investments in mobile health in 2016.
Telehealth also grew significantly in relation to mobile health. Telehealth is the use of advanced wireless and mobile technology to care for remote patients while remotely connecting to the advanced technology provided at the hospital location.
Organizations such as Children’s Mercy in Kansas City Missouri worked towards improving its telemedicine program to treat patients that could not physically travel to their facilities for care. Its telemedicine technology enabled remote patients to receive the same care at a distance.
Health Information management remained a significant part of health IT VC funding in 2016 after a major drop-off between 2014 and 2015. Personal health also remained steady along with service providers and revenue cycle management. The only technology group to significantly decline in VC funding last year was scheduling, rating, and shopping, which gave way to mobile health growth.
Source: Mercom Capital Group
The mobile health trend continued through the top funded health IT technologies in 2016 with healthcare mobile apps dominating with $1.29 billion in funding. Wearable sensors were a distant second with nearly $6 million. Telemedicine, mobile wireless, and remote monitoring also made the top ten funded health IT technologies with $5.3 million, $2.3 million, and $1.3 million, respectively.
Data analytics also received a significant amount of VC funding in 2016 with $5.7 million. The healthcare industry is leaning more towards data analytic solutions as mobile and wearable medical devices are collecting large volumes of valuable data.
Organizations are facing databases full of clinical data waiting to be sorted and analyzed. Healthcare organizations are recognizing the while electronic health records (EHRs) provide important and detailed information, they are limited by structured data fields. More advanced analytic solutions are required to process the data from other sources including movie devices, remote monitoring devices, and wearables.
Healthcare organizations are leaning toward mobile health IT initiatives as remote networking technology becomes more secure and advanced. Healthcare organizations will continue embracing mobile health and telehealth through 2017.