The Future of Healthcare IT Investments

Healthcare IT is among the most promising markets in the world. First-quarter funding to digital health startups reached an all-time high in 2018, and the industry is still ballooning. As a managing director in the Harris Williams Technology, Media & Telecom Group and the head of our Healthcare IT practice, I take particular interest in this field.

This is one reason that I—along with fellow Harris Williams managing director, Thierry Monjauze—am looking forward to participating with KLAS in an inaugural event on June 3–4: DHIS19: International.

This gathering in Barcelona will give attendees a chance to network and collaborate on some of healthcare IT’s toughest problems. I want to talk for a moment about the differences between the U.S. and global situations and how those differences affect investment patterns.

The U.S. and European Markets

Global healthcare IT is particularly exciting because of the singular circumstances in various regions. For example, let’s compare and contrast the U.S. and European markets. We have observed that the U.S. is 5–10 years ahead of Europe in the adoption of healthcare technology. On the other hand, Europe is probably 5–10 years ahead of the U.S. in its progression toward value-based care.

The U.S. and Europe also have diverse healthcare barriers to tackle. They both face the ubiquitous challenge of language—that problem, thankfully, can be solved. However, the two regions have and are highly influenced by very different payment structures and regulation climates.

On one hand, the U.S. has a whole class of companies focused on revenue cycle management; European single-payer systems don’t need the same kind of help. On the other hand, Europe’s regulatory regimes outnumber those in the U.S. and create a very unique healthcare-delivery structure.

The disparities between the American and global healthcare IT markets create an interesting investing landscape. We often discuss the following questions: Which companies are doing well because of their choice to address the specific issues in a certain region? Which companies are successful because they are addressing global problems with healthcare delivery?

No matter which of those methods an organization chooses, companies from every region can benefit by watching stakeholders across the pond.

Learning from Our Neighbors

DHIS19: International will be the perfect opportunity for providers, vendors, and investors from all over the globe to share insights and teach each other how to improve the deployment of healthcare IT in their respective regions.

For example, because of America’s head start in healthcare IT, the U.S. market has shown us which technologies tend to be successful, add value, and help healthcare organizations in the quest to deliver better care at lower prices. Companies can take those technologies to Europe, where IT adoption is not as advanced. Those tools may actually be more relevant in Europe than in the U.S. at this point, since Europe is further down the path of value-based care.

On the flip side, I think American attendees will be interested to see what value-based care delivery looks like in practice. An accountable care organization (ACO) in the U.S. today looks a lot like a regional care-delivery system in Europe 5–10 years ago, and a care-delivery system in Europe today is a pretty good sneak peek at what an ACO in the U.S. will probably look like 5–10 years from now.

Investment Hot Spots

I’m often asked which segments in digital healthcare are going to see the heaviest investments globally in the coming years. The short answer is that the technologies best able to alleviate universal problems are the most likely to get universal attention.

As previously discussed, each region has its own setup and requirements. But some issues cross continents. For example, the imperatives to educate patients, drive patients to lower-cost settings, and help providers make better decisions at the point of care exist everywhere. Many investors are eager to get on board with companies who are making strides in such crucial arenas.

With those truths in mind, no one should be surprised that patient engagement is a top-of-mind market segment throughout the world. Helping patients understand and invest in their own care is fundamental to successful healthcare strategies.

Another critical topic on everyone’s minds is that of information security. A person’s health record is estimated to be 20 to 50 times more valuable than his or her credit card information, and more than 113.27 million records were exposed in 2015 alone.

Can a company help solve one of these global challenges? If so, they are likely to find lots of support and success in the near future if they haven’t already.

Partnerships Pay Off

One of the many lessons my Harris Williams colleagues and I have learned over the years is that partnering with the right people for the right causes leads to victory. I’m eager to forge new friendships and conquer new territory with the other attendees at DHIS19: International.

 
     Photo Cred: Shutterstock, Madcat_Madlove