By Lee Bienstock, CEO of DocGo
Healthtech has long been a beacon for investors, recognized for its potential to transform healthcare and offer lucrative returns. Yet today, with so many emerging technologies promising to upend the healthcare system, the biggest obstacle lies in deciding where to invest within this vast landscape. While financial returns should always be a key consideration, savvy investors should focus on companies that are not only profitable, but also pivotal in driving healthtech innovation, particularly those advancing the crucial evolution towards a value-based care model.
In the U.S., the healthcare paradox is striking. Despite being the world’s largest spender on healthcare – over 18% of our GDP in 2023 – we face mounting challenges in patient outcomes and efficiency, ranking poorly among Organisation for Economic Co-operation and Development (OECD) nations. This stark contrast between high spending and limited effectiveness underscores a significant opportunity for healthtech. Consider the statistics: 60% of adults in the U.S. suffer from chronic diseases, which contributes to 85% of healthcare costs. This scenario underscores the potential of technology to better manage care for these patients with enhanced accessibility and improved cost-effectiveness.
Telehealth, which witnessed exponential growth during the pandemic, has played a key role in transforming the healthcare ecosystem. This growth phase not only sped up telehealth adoption but also brought to light its market saturation. As a result, the investment challenge has evolved to focus on identifying telehealth ventures that offer genuine innovation and sustainability – and have the ability to drive significant improvements in care quality, patient satisfactions and reductions in total costs of care.
The synergy between telehealth and other healthtech innovations, such as remote diagnostics and deployable solutions, is becoming increasingly apparent. Remote monitoring technologies, for example, have demonstrated the potential to significantly reduce hospital readmission rates and costs. An example of innovation in this sector can be seen in companies that deploy scalable care delivery models that combine elements of traditional and tech-supported healthcare strategies. These strategies can include in-home clinicians, connected medical devices and remote care teams for a holistic approach to virtual patient care.
The impact of telehealth and associated technologies in improving patient outcomes in such programs exemplifies the sector's potential, not just as an investment avenue but as a cornerstone in the evolution towards more efficient, accessible, and outcome-focused healthcare systems. In 2023, more than 51% of the eligible Medicare population enrolled in value-based Medicare Advantage programs, indicating a growing acceptance of these new models. The value potential of virtual and deployable health care strategies to drive improved quality and patient outcomes in Medicare Advantage and other value-based health plans exemplifies how this sector is not just a promising investment avenue but a cornerstone in the evolution towards more efficient, accessible, and outcome-focused healthcare systems.
Investors navigating the healthtech landscape must do so with strategic insight and foresight. The adoption of technology in healthcare must be innovative, safe, and ethically integrated. The hybrid model, blending technological innovation with the human touch, is key to ensuring patient safety and trust, crucial for the successful adoption of healthtech solutions. Investment opportunities lie in companies leading this hybrid approach, using technology to expand clinicians' reach and enhance decision-making and care plan development, all while maintaining a commitment to expanding healthcare access and reducing costs.
As we look towards the future, the trajectory of the U.S. healthcare system seems poised for profound changes driven by healthtech. This transformation goes beyond efficiency—it's about personalization and patient-centricity in healthcare. The global landscape, too, offers immense potential, from meeting basic health needs in remote regions to improving healthcare delivery in advanced economies. Investments in these domains promise financial returns and the opportunity to significantly impact global health outcomes.
While investors appreciate the significance of healthtech, it stands distinct from other tech sectors due to the deeply personal nature of healthcare. Unlike the broader tech and software industry, where the ethos of “fail fast, fail often” drives innovation, such an approach is incompatible with healthcare, where patient well-being is paramount. However, a modified strategy of "test and iterate" can be effective in healthtech, provided it's applied under stringent conditions that prioritize patient safety and efficacy. This method allows for gradual and careful improvements without compromising patient care.
Healthtech presents a unique investment landscape, where financial returns and societal impact converge. Each investment not only fuels industry growth but also contributes to a healthier future. In this realm, the right investment is not only a financial triumph but also a driving force for meaningful changes in healthcare, blending innovation with a conscientious approach to patient health.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.