Venture capital firms pour billions into digital health: 4 things to know

Despite new care delivery opportunities presented by venture capital-backed digital health startups, policymakers should question potential patient care risks that could arise from changing existing healthcare models, according to an opinion piece published by Health Affairs.

Here are four things to know:

1. Authors Suhas Gondi, medical student at Boston-based Harvard Medical School, and Zirui Song, MD, PhD, assistant professor at Harvard and internal medicine physician at Massachusetts General Hospital in Boston, said three elements are driving venture capital growth in healthcare: lack of patient adherence, migration of medicine from the hospital and new payment models.

2. In the past decade, venture capital firms have invested more than $41.5 billion in digital health. In 2017, digital health received more than $11.5 billion from venture capital firms. Digital health firms providing solutions for patient-facing devices, provider-facing practice management software and payer-facing data analysis tools were among the companies backed.

3. The trend continued in 2018: In the third quarter of last year, venture capital firms invested $4.5 billion in digital health funding, breaking previous records.

4. As healthcare venture capital funding continues its ascent, the authors argued "the growth of venture capital and venture capital-backed, early-stage companies (startups) deserves the attention of patients and policymakers because advancements in medicine are no longer exclusively born from providers within the delivery system and increasingly from innovators outside of it."

For the full analysis, click here.

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