STRONG, IF SUBDUED, DIGITAL HEALTH MARKET

Investment into digital health companies in 2022 didn’t hit the highs of 2021, with experts saying the fundraising market is unlikely to look much better this year.

“You’ll continue to see layoffs, and startup funding is going to be hard to come by,” said Russell Glass, CEO of the digital mental health platform Headspace Health.

But that doesn’t mean interest has completely waned. Investors and healthcare leaders are still expecting a strong market for digital health technology, particularly tools enabling revenue cycle management and hospital-at-home programs.

Scott Barclay, a managing director at venture firm Insight Partners, said his company is funding fewer deals.

However, he said, “the checks we write in the next three years will power an entire next generation of clinical outcomes and human health impact, as well as return for our investors.”

At venture firm Third Culture Capital, founder and managing partner Dr. Julian Pham said he expects continued investment from corporations such as CVS Health into health tech companies, as well more digital health merger and acquisition activity overall.

He also predicted increased curiosity from investors, pharmaceutical and health insurance companies about digital therapeutics, which are clinicianprescribed software applications.

“As a physician, I’ve always dreamed of a future where I could prescribe an app,” Pham said. “Is it the right time? Time will tell. A lot needs to happen in digital therapeutics and it’s going to be hard.”

On the insurance company side, Blue Shield of California President and CEO Paul Markovich said many of the digital health investments his organization has made in the last few years will produce tangible results in 2023.

“More and more people are going to be able to pick up their phone and do a one-touch pay for their claim,” Markovich said. “As these technologies start to become more real, it just opens up a lot of possibilities for the people

n who would benefit from this value.”