Venture capital funds are pouring into digital health companies. Every week, the news cycle is filled with new rounds of financing for various new healthcare services and technologies. The pandemic has accelerated innovation, from telemedicine to remote patient monitoring to behavioral health.
The funding community and entrepreneurs are excited about the future of digital health-and for good reason.
Rock health report By the third quarter of 2021, digital health companies have raised a total of US$21.3 billion in venture capital from investors. This is more than double the USD 10.2 billion raised as of the third quarter of 2020. This innovation improves medical services during the global pandemic and promotes forward-looking innovative healthcare technologies in the following areas.
At the same time, as the pandemic has expanded the conversation about health equity, there are differences even in the focus of venture capital investment. Although funds have poured into new profit areas related to telemedicine, mental health, and medical insurance advantages, Medicaid patients have been left behind.
Medicaid is a public health insurance provided by the United States for low-income people.According to data from the Center for Medicare and Medicaid Services (CMS), Medicaid covers one-fifth of Americans and accounts for about one-sixth of health care costs ($662 billion in 2020). Many of these patients have complex and expensive healthcare needs.
Although we have made progress in technologies that support access to medical care and better care, fundamentally speaking, there are still a large number of people whose medical needs cannot be met.
More demand, fewer resources
Traditionally, the return on care investment for Medicaid populations has been low, which is why the private sector often ignores these patients. Reimbursement rates are always lower than alternatives, and these rates are constantly changing (usually on a state-by-state basis). Although the reimbursement rate is low, the medical care needs of the Medicaid population are usually as complex as other populations, and fewer resources are used for out-of-pocket expenses.
In addition, patients often enter and exit Medicaid eligibility, which makes it challenging to establish trust relationships with healthcare providers. This can make it more difficult to ensure patient participation, medication adherence, continuity of care, and ultimate quality—many factors are related to the success of value-based payments. Not to mention, the social determinants of health (SDoH) that play a role in Medicaid populations can make access to health and equity more challenging. Patient communication is one of the biggest challenges in filling care gaps, and these gaps are often not met due to difficult socio-economic conditions.
Even CMS has seen the consistency and demand for innovation to support the Medicaid population.The agency’s Recent strategic direction Noting the need for responsible care, health equity, and improved access and affordability. These are all factors that the VC community has resources to support and resolve.
CMS status It is willing and eager to collaborate with healthcare disruptors on payer and provider consistency, clinical tools, better outcome measures, and technical methods to improve the ability to change healthcare.
With innovation, everything is possible
Historically, healthcare services have not been able to expand at all. As a doctor and computer scientist, my mission is to help develop and introduce digital health solutions to the public. We need to invest in the team and technology that builds the solution to help the large number of people who need it most. Venture capital companies can help advance work by investing in places where technology can serve and develop.
Take telemedicine as an example. It has been around for decades, but due to the pandemic, healthcare organizations have reduced barriers to use—and providers can finally care for large numbers of people from a distance.
There is also a misunderstanding that the underserved population cannot obtain technology. Pew Research Center It is found that the use of mobile phones, including smartphones, is no longer an obstacle to innovation. Nearly 90% of Americans can use public Wi-Fi and cell phones. In addition, even among people with few social and economic resources, the number of smartphones owned is at the highest level in history.
Today, digital health startups can meet the healthcare needs of these patients through technology-first solutions. Although historically, the cost of covering a large number of Medicaid populations is too high, but with scalable software solutions, we can easily expand to the entire patient population in need.
This is just good business
As an industry, we cannot ignore the greater demands of the healthcare system. Taking care of the neglected is simply a good thing. Here, doctor-led companies can lead the way by understanding the complex risks and care needs associated with disadvantaged and underserved people, and investing in technological solutions that help close the care gap.
It is true that Medicaid is not the market that most entrepreneurs consider when starting a company for the first time, which is why it is more important for venture capital to support these initiatives. Helping underserved people to promote innovation is not a charity project. From the perspective of dollars and cents, it is a need and an opportunity. We have the technology to make things better-we should make everyone better.
If we want a health care system that is better than what we have discovered, we need venture capital companies to invest in technologies that cover and serve everyone. Although we have made light years of progress in some areas, we still have more work to do to help those who need care and technical output the most.
Venture capital companies need to stop being silent partners and move on to making healthcare fairer, more affordable, and more accessible.
Photo: phive2015, Getty Images
