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January 10, 2019

8 Digital Health Trends to Watch in 2019

Sophie Madden

You asked us to introduce more predictions and insights, so now that JPM is out of the way...here are our 8 digital health trends to watch in 2019:

1. From voice technologies to machine driven diagnostics, AI is set to demonstrate some real traction this year.

2. Voice technology will show its potential, primarily being used by hospitals to reduce administrative burden, and by patients for education and medication ordering.

3. Amazon will continue to develop their at-home diagnostic capabilities.

4. Siteless clinical trials will begin to take-off, and so will collection and interpretation of digital biomarkers in clinical trials.

5. Health Insurance will get more digital.

6. More real world evidence and use of digital therapeutics.

7. Big pharma and other stakeholders in healthcare will go to China.

8. Rise of primary care: continued attempts to make it more accessible and affordable.

Predicting the future is not easy, and we do not want to base our take on conjecture alone, so, we’ve put together our predictions based on everything we’ve read and heard from our members, advisors, friends at start-ups, and investors, coupled with data from the HealthXL platform to bring you a perfect mix of subjective and objective data.

AI - From Hype to Hope

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If you thought you’ve heard too much about AI over the last few years, brace yourself. There’s more to come, but this time with the promise of actionable and tangible uses. There is growing evidence to support the application of AI in trials, research and clinical practice, solidifying our faith in the technology.

Since 2000, there have been 1091 investments in companies that utilize AI in healthcare. As the graph below shows, the majority of this activity has occurred in the past three years. With all of this money going in, it is clear that investors see the potential of AI, and for good reason.

Source: HealthXL Data Platform

A large proportion of deep learning startups are focused on medical imaging analysis aiming to provide cost and time saving opportunities for doctors by enhancing detection and diagnosis. In 2018, we saw how AI is being utilised to enhance diagnostics, with particularly good results emerging from tests that use deep learning algorithms for advancing medical imaging in radiology. For example, a clinical study carried out by Kheiron medical technologies regulatory approved software demonstrated indications of performance above the average national benchmarks for breast screening radiologists.

With more data, the accuracy of such tools will only continue to grow. The recent FDA approval of IDx’s AI-powered diagnostic device for diabetic retinopathy will drive adoption of such technologies, validating this new era of AI-powered diagnostics and giving confidence in the capabilities of these solutions. IDx is the first device that has been approved by the FDA to provide a screening decision without the requirement of physician interpretation.  

We predict many similar solutions will follow suit and apply for FDA approval, particularly following FDA commissioner Scott Gottlieb’s comment that they are “taking steps to promote innovation and support the use of artificial intelligence-based medical devices.” We do not see such technologies replacing radiologists, but foresee the industry acknowledging that they hold true potential to improve diagnostics and reduce repeat and cumbersome tasks that take the radiologist further from the patient.

-> From voice technologies to machine driven diagnostics, we predict that AI will demonstrate some real traction in 2019.

 Voice Technology - Just Ask

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Virtual health assistants, specifically voice enabled solutions, have been at the forefront of many conversations we have been a part of throughout the year. Everyone is wondering how voice technology is going to impact the industry, with potential applications in patient engagement and education, patient/physician communication, HCP education, medication adherence, medication ordering, note taking, and appointment scheduling.

When it comes to voice enabled technology in healthcare, we are still in the phase of pilot projects - learning how best to utilize and integrate these technologies, and establishing best practices. We are already beginning to see such applications, with the likes of Boston Children's hospital utilising Alexa as a healthcare assistant in the ICU and as a support service to educate parents with sick children, the NHS in talks to use Alexa as a diagnostic and educational tool for patients, and Microsoft and UPMC partnering to trial a voice enabled scribe in ‘Project empower MD’. With Amazon’s recent acquisition of Pillpack, we may also begin to see patients using voice technology to order their medication via Alexa.

Voice enabled solutions are receiving significant interest and investment, with physician note-taking solutions Suki and Notable raising $20M and $19.2M respectively. This interest is not limited to just the US, with a number of investments in voice enabled solutions also occurring in China and Israel.

Source: HealthXL Platform

The D2C market is growing rapidly, however the integration of such technology into hospitals settings will take a little longer (HIPAA compliance, EMR integration being challenges). Although there are these challenges, we predict that voice technology will be the talk of 2019. As John Brownstein, CIO of Boston Children’s hospital recently noted ‘’While 2018 has really been the year of the pilot, we are hoping that 2019 will bring with it widespread adoption and deployment of voice enabled technology’’.

-> We believe that voice technology will demonstrate its potential in 2019, primarily being used by hospitals to reduce administrative burden, and by patients for education and medication ordering.

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Amazon Will See You Now

Tech giants are slowly but surely establishing themselves as key players in the future of digitized healthcare. It seems there is no stopping Amazon on its path to disrupting the healthcare industry. In 2018, we saw them spread their reach farther than ever before, with the announcement of their joint venture with Berkshire Hathaway and JPMorgan Chase in January, the acquisition of pharmacy start-up PillPack in June, Accenture and Merck partnering with Amazon to launch a data-driven drug development platform on Amazon Web Services in September, and most recently, the release of data analytics platform Amazon Comprehend Medical in November.

From pharmaceutical companies, to payers, to providers, it seems that Amazon is geared up to tackle all stakeholders in the industry. Will 2019 be the year they move into the D2C (in healthcare) market too? There have been whispers that Amazon was in talks with home testing companies to bring diagnostic and screening tools to patients in their homes - a move that makes sense considering this is one of the only areas they have not ventured into before. Combine the growing interest from consumers in genetic testing kits like 23andMe with Amazon’s extensive knowledge of selling D2C, and it is a no brainer that this is a match to expect. In fact, in October 2018, Amazon filed a patent that would allow for Alexa to diagnose illness and emotional states of people based on vocal cues such as coughing and tone. With this capability, Amazon would then be able to recommend suggested treatments and close the loop by also delivering those treatments via pillpack and a telemedicine consultation (another partnership we predict will happen in the near future).

However they decide to progress, it is clear that all eyes will remain on Amazon in 2019,particularly from healthcare incumbents who are concerned how such competition may affect their business.

->  We predict that in 2019, we will see Amazon continue to expand their investment and partnership profile to develop a holistic platform that provides education, equipment, medication, consultation and diagnosis, all in one place.

The Changing Face of Clinical Trials

As technology advances, the idea of carrying out a fully site-less clinical trial is becoming a reality. Science37 were the first to carry out a fully site-less trial earlier in 2018. Researchers are already using technology to enhance recruitment and retention for clinical trials, leveraging AI and big data to find diverse sets of patients most suited for clinical trials, and incorporating remote patient monitoring and medication adherence tools to drive retention.

One of biggest acquisitions this year was the purchase of Flatiron by Roche in February, showing how pharma companies are now incorporating AI and machine learning into their business strategy. Roche has one of the strongest portfolios of database and analytics platforms at its disposal to support its personalized drug discovery program in Oncology.  We predict other pharmaceutical companies following suit and utilising the potential of such companies to transform their business.

-> We predict that 2019 will be the year we see site-less clinical trials take-off, enhancing clinic research and making clinical trials more accessible to patients. We will also see significant progress in the collection and interpretation of digital biomarkers in clinical trials.

InsureTech - Disrupting the Healthcare Insurance Landscape

The shift from fee-for-service to value-based care has catalysed the introduction of new players in the insurance space. Key stakeholders across the entire healthcare ecosystem are watching this space closely, and we have seen significant interest in health insurance start-ups like Oscar Health and Clover Health. In August 2018, Alphabet invested a whopping $385M in Oscar Health, following a previous investment of $165M lead by Verily. Compared to traditional insurance models, newcomers like Oscar Health and Clover Health offer transparent pricing models and utilise technology to offer services such as telemedicine and online payments to make the user experience more convenient and enjoyable.

Long standing insurers are slowly reconsidering their approach, with many now recognising the need to incorporate technology into their offering to compete with newcomers - examples include Cigna acquiring Express Scripts in March and Aetna being acquired by CVS in November. These vertical integrations show that incumbents are looking to reform and recognise the need to be agile in the ever-changing, competitive landscape. This activity indicates that there may be some interesting partnerships and acquisitions brewing.

-> In 2019, we think we will see digital health companies and health insurance start-ups reforming and revamping the current healthcare payment environment. Incumbents will also trial some of this new tech in pilots, turning to acquisitions, partnerships, and new investments to strengthen their offering.

Digital Therapeutics - Here to Stay

Its safe to say that 2018 was the year of digital therapeutics (DTx). We saw a flurry of product launches, investments, partnerships, and even an IPO. We also saw 2018 close out with the acquisition of Propeller Health by ResMed, and 2019 begin with the announcement of a commercial relationship between Otsuka and Click Therapeutics, showing an interest in DTx not only from pharmaceutical giants but also from medical device companies. Could this represent the beginning of a cascade of M&A activity in the DTx space now that we are beginning to see the true value and potential they hold? We certainly think so, particularly on the back on Pear Therapeutics’ recent $64M Series C funding round with participation from Novartis, indicating their continued interest and investment in the company.

Source: HealthXL Data Platform

In our latest report on DTx, we took a look at where digital therapeutics are at present and where we hope to see them go in future:

-> We predict that in 2019 we will move beyond speculation over business models and reimbursement into actual application and generation of real world evidence for digital therapeutics - putting the tech into the hands of patients and physicians.

China - The Next Frontier

The population of China makes up almost 20% of the entire world’s population. Combine this with their growing number of elderly people and people living with chronic disease, the fact that China’s healthcare spending is forecasted to be $1 trillion by 2020 (second only to the USA), and the launch of the Chinese government’s ‘Healthy China 2030’ initiative, and it is clear that the evolving healthcare sector in China is a prime market opportunity for healthcare innovators. Take for example the success of Chinese digital health company WeDoctor, who according to Bloomberg are valued at $5.5B and have 160M registered users. There is a clear appetite from users for such solutions, and investors are beginning to take note. The number of investments by year in China in digital health have increased dramatically in the last 5 years, peaking at 100 investments in 2018. The US is still ahead in terms of overall digital health investment, but compare China to other digital health hubs such as Germany, Sweden and France, and China had almost double the number of investments in 2018.

Source: HealthXL Data Platform

We are already seeing pharmaceutical companies showing an interest in the Chinese market, with GSK, Merck, and Bayer all announcing partnerships with Chinese tech giant Alibaba, Sanofi partnering with Ping An, and J&J announcing the launch of a new JLABS in Shanghai. China is also at the forefront of the digital health insurance transformation, with Ping An leading the way, and new Hong-Kong based digital insurance company BowTie that announced a $30M Series A funding round, and becoming the the first online-only operator to earn a license in Hong-Kong. A number of these offerings in China are not already mature solutions in the West.

A good understanding of the local ecosystem, culture and regulation will be imperative to penetrating this market. With this in mind, we will be running an event in China in October- Ignite Shanghai. Stay tuned for more information.

-> Based on this activity and investment, we predict 2019 will be the year that big pharma and other stakeholders in the healthcare space establish their strategy in navigating the lucrative Chinese market.

Making Primary Care Accessible and Affordable

In 2018, we saw numerous hospital systems, pharmacies, and insurers purchasing primary care facilities in an attempt to make primary care more accessible and affordable.  

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Retail drugstore giants, such as CVS and Walgreens, are entering this lucrative space and are beginning to offer primary care services on-site.  They recognise this as a way to retain customers and essentially become direct competitors to other healthcare facilities, particularly when partnered with insurers. For example, through the recent acquisition of Aetna by CVS, members will likely be incentivised to use providers in the Aetna-CVS network over other health systems' facilities. The end goal is aiming to make these facilities more affordable and readily available - Walgreens ‘Find Care Now’ feature gives certain contracted healthcare providers the opportunity to advertise and provide information to consumers about their respective healthcare services.

National insurers such as Humana, Anthem and United have all been buying up medical practices in recent years. For insurers, they see this as a way to control spending, and manage patient care by giving their plan members access to primary care facilities. Humana, for example, recently purchased post-acute care provider Kindred Health and primary care clinic cohort Family Physicians Group.

For hospitals, purchasing primary care facilities provides them with an opportunity to keep patients within their network and offer them with a holistic service, all the while being able to manage patient care and maintain their revenue in a competitive environment. For example, Northwell Health recently partnered with GoHealth Urgent, recognising the need to expand their services and provide urgent care facilities as part of their network. 

-> We predict that in 2019, the competition for primary care facilities will continue to grow, leading to a reduction in cost and increase in access for primary care services.

It seems that every year for the past five years or so, industry experts have been predicting that various digital health trends will finally move from theory to practice - could 2019 be the year this actually happens? It is too early to tell if things that gathered momentum in 2018,  like blockchain and voice tech, will finally come to fruition in 2019 and become standard practice. One thing we do know for sure though is that the lines between digital health and healthcare are starting to blur, with people no longer compartmentalising the two, but rather recognising that digital is an integral part of healthcare, and that in an ideal world, one does not exist without the other. The bottom line is that technology enables better healthcare - empowering a more data-driven, patient-centric approach to health.

We can’t wait to see what 2019 brings!

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