NEW YORK CITY—Uber is looking to get into pharmacy medication delivery. The prescription eyeglass company Warby Parker is moving into virtual eye exams and audio equipment maker Bose wants to help consumers get better sleep through hearing technology.
“The field of play is changing pretty dramatically and the competitive lines are constantly being redrawn,” he said, noting Amazon’s “unbundling” of the pharmacy, Apple’s unbundling of the clinical trials process and Google’s unbundling of the hospital.
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Case in point: traditionally consumer-focused tech companies like Bose are becoming players in the healthcare space.
Back in May, the company launched a direct-to-consumer hearing aid, the first FDA-authorized device that allows users to fit, program and control its settings without a doctor. Shares in Sonova, William Demant, and GN Store Nord, the largest international hearing aid manufacturers, each dropped about 10% on news of the FDA’s green light, FierceBiotech reported.
Bose also acquired Hush Technology to develop noise-masking sleepbuds to help the 100 million Americans who have sleep deprivation issues, John Roselli, general manager, Bose Health, said during the conference.
Healthcare incumbents tend to be dismissive of these new players, a group Sanwal referred to as “insurgents” rather than just startups. Many of the established healthcare organizations are making big bets on developing innovation internally. However, according to CB Insights’ research, 57% of healthcare organizations don’t have clear metrics to measure the value of transformational investments. And research shows that about half of these bets are frequently not aligned with strategy, Sanwal said.
But the pace of innovation coming from new players in healthcare will only accelerate, Sanwal said. “You have to make a bet: build, buy or partner. Technology is no longer just about supporting the business. Technology is the business,” he said.
Here are three other trends to watch in digital health and healthcare:
The AI hype is over.
Venture capital funding continues to pour into artificial intelligence healthcare startups—healthcare AI companies raised $864 million in the second quarter of 2019 compared to the $764 million AI startups raised in the second quarter of 2018, according to a CB Insights’ report. But that could change fairly soon, according to Jeff Immelt, former chairman and CEO of GE and now venture partner at New Enterprise Associates.
The next generation of AI healthcare companies will have a hard time getting funding, especially those that are oblique about where the benefits come from, he said during the CB Insights’ conference.
Digital health and AI healthcare startups should focus on delivering better outcomes and solving problems that are right in front of them. “People say, ‘we’re going to use AI to cure cancer,’ and I think, ‘that’s great—can we use AI to send a better bill?” Immelt said.
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Digital health startups also need to focus on finding ways to get their technology to fit within existing technology systems and workflows.
“There are so many dead home healthcare companies. The graveyards are full of them. The next graveyard is going to be filled with AI companies if they don’t find a way to embed their technology into these systems,” he said.
Telehealth is attracting new players.
As mainstream adoption of telehealth continues, Teladoc, one of the leaders in the telehealth space, is now eyeing virtual primary care, according to company CEO Jaron Gorevic. The company also moving into chronic care management and behavioral health, he said.
Gorevic said during the conference the company is not threatened by new players in telehealth, such as Amazon offering virtual care to its Seattle employees. “There are very, very low barriers to entry, high barriers to success and scale. We are a complex system of leading capabilities and that’s harder to replicate,” he said.
CVS, Walgreens, Amazon, Best Buy, through its Tyto Care partnership, and Walmart are all moving into virtual care services. Humana launched a new virtual primary care service launched with telehealth company Doctor on Demand
Warby Parker also is offering virtual care services. The eyeglass company offers a Prescription Checker app for digital eye exams. “It’s not meant to displace a regular eye exam, but it’s a good complement, particularly for people who don’t have good access to optometrists,” Dave Gilboa, Warby Parker co-CEO and co-founder, said during the CB Insights conference.
RELATED: Best Buy expands reach into digital health space with Tyto Care partnership
He said telehealth is a great opportunity to reduce friction in providing service. “Initially, it’s for a basic screening, to determine if there’s nothing wrong or as a triage tool to see an optometrist,” he said.
Focus on social determinants of health is growing.
Ride-hailing company Uber launched Uber Health in 2018 to focus on non-emergency medical transportation. The platform saw 400% year on year growth in the second quarter of 2019 compared to the second quarter of 2018, Uber Health leader Dan Trigub said during the conference.
Uber sees the non-emergency medical transportation market as a $15 billion market opportunity in the U.S. “We haven’t even touched on meal delivery, pharma delivery, those are all things we’re thinking about,” Trigub said.
The company could leverage its existing Uber Eats infrastructure to get meals to health plan members as a way to address food insecurity issues, Trigub said.
On-demand transportation could come into play in other ways, he said, noting that he spoke to a CEO of a large health system who was looking to pay to transport people to church services. “Moving forward, we can think about getting people to the gym, to the dentist, and to other social activities,” Trigub said.
As home-based healthcare services and virtual care grows, Trigub said these services complement Uber Health’s business as the company could provide rides to caregivers and help with prescription drug delivery.
Other startups are looking to address social isolation through a combination of technology and personal companionship. Palo Alto, California-based company Mon Ami pairs college students with seniors for social visits. The company recently raised $4.3 million in seed capital with plans to expand to more cities.
There are many ways to ensure physical safety cand care for loved ones, Joy Zhang, Mon Ami co-founder, told Fierce Healthcare.
“But what’s hardest to provide is everything that makes us human: joy, connection, meaning and enrichment,” Zhang said.
Consumer-focused companies are rapidly moving further into healthcare and industry incumbents need to be ready for accelerating change: that was one of the big takeaways from CB Insights’ Future of Health conference in Manhattan this week.
It’s not just startups attacking entrenched interests in healthcare; it’s large companies as well, said CB Insights CEO Anand Sanwal during the conference.