digital health

The outbreak of Covid-19 was a “black swan” event that dramatically accelerated the evolution and acceptance of digital health and healthcare information technology (IT) — likely by more than five years. It has also permanently changed Americans’ expectations of healthcare providers and patient care. However, the focus on Covid-19 belies three additional underlying and interrelated trends that will continue to drive new use cases for digital health and healthcare IT applications.

Value based reimbursement

The ongoing shift towards “value based reimbursement” continues to be a major catalyst of digital health and healthcare IT adoption. Under value-based reimbursement, hospitals and physicians are compensated based on their ability to demonstrate high quality of care, generate positive real-world patient outcomes, and manage the health and wellness of the populations in the communities that they serve. This contrasts with the legacy, “fee-for-service” reimbursement model under which providers are paid on a volume basis with little regard to quality, outcomes or population health.

In late 2021, the Centers for Medicare and Medicaid Services (CMS) announced an ambitious goal of shifting the majority of beneficiaries into a value-based reimbursement model. A value-based reimbursement environment requires an interoperable IT infrastructure to coordinate and track data on patients across disparate settings of care. To support this, CMS has recently proposed important reforms to the Medicare Shared Savings Program to give providers up-front funding for healthcare IT and digital health technologies in order to more effectively operate in these new value based reimbursement models.

A major challenge to success in value based reimbursement is that the software ecosystem in healthcare has evolved to be heavily client-server and on-premise, with each implementation being its own instance and customized to each user. This has led to fragmented and siloed software systems that cannot talk to each other. The good news is that legislative and regulatory actions are helping to address these interoperability challenges. The 21st Century Cures Act, for instance, is helping to open up closed software systems and give artificial intelligence and machine learning applications access to larger data sets. This improved data access, in turn, could elucidate new and unexpected predictive insights of how clinical, social and environmental variables can positively impact patient outcomes and population health.

Healthcare consumerism

“Healthcare consumerism” is a second major macro driver behind the digitization of healthcare. The rising prevalence of high deductible health plans is resulting in Americans bearing a greater out-of-pocket burden which has led to more patients comparison shopping for their medical care. Hospitals and physicians, in turn, are competing for patients by creating modern and efficient consumer experiences. One area of focus is the digitization of the manual patient intake process – reducing paperwork for patients and improving operations for providers.

For instance, physicians are adopting AI software to reduce patient no-show rates, which can be as high as 15 to 30 percent. AI-based software can proactively flag patients who are more likely to not show to their appointment and proactively initiate reminders. And, if a patient cancellation occurs, the AI software automatically fills appointments from pre-existing lists of patients who have indicated that they are open to taking short-notice appointments. Finally, physicians are using AI to conduct low-cost digital marketing and educational campaigns to make patients aware of new or incremental services relevant to their personal healthcare needs.

Contributing to the movement towards healthcare consumerism is the implementation of the No Surprises Act, which has been one of the more underappreciated pieces of legislation impacting providers in recent years. This legislation is materially contributing to an environment of greater price transparency among hospitals and physicians to enable Americans to better comparison shop for their care. Among other things, the No Surprises Act requires healthcare providers to disclose up front to patients “good faith price” estimates for their services. Initially, this is limited to self-pay patients, but it could provide a framework for additional price transparency legislation or regulation over time. Here, we see the need for new technologies to help providers generate and communicate real-time price estimates to patients. This can be particularly difficult for care that involves multiple providers and multiple encounters over time.

Complexity of care

Finally, a third driver of digital health and healthcare IT is the increasing scientific complexity of medical care, including advances in genomics and the use of precision therapeutics, which is driving the need for AI-based decision support software.

This is particularly the case for complex specialties such as oncology. In oncology, for instance, the science is advancing so rapidly that a single physician would need to read 40+ hours per week to just stay current on the most recent research. Also, physicians must often decide between 7+ therapeutic alternatives for any one diagnosis. The range of treatment alternatives will likely increase over time with the availability of low-cost biosimilars. The use of low-cost biosimilar drugs represents an opportunity to generate hundreds of billions in annual savings over the next decade. However, one of the major barriers to the use of biosimilars is provider and patient awareness and education. Here, software can help physicians proactively screen for patients who could benefit from a lower cost biosimilar alternative and deliver tailored educational content.

Considerations for the future of innovative, hybrid care

Implementing and pursuing innovation in digital health and healthcare IT should be a priority for all U.S. healthcare providers and payers — especially as the lessons and response to the Covid-19 pandemic become permanently part of our everyday lives. That said, we should not forget that advances in healthcare IT and digital health should be considered as a complement to in-person care, rather than a replacement of it. Exclusively relying on healthcare IT and digital health alone could bring the unintended consequence of creating even greater fragmentation and duplication of care. Finally, if there’s one lesson learned from the last few years, it’s to expect the unexpected.

Photo: Dina Mariani, MedCity News

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Healthcare is an industry designed to provide essential services and care for patients to improve their health and well-being. Over generations, the expertise of medical professionals has allowed the industry to continuously innovate and meet the ever-changing demands and needs of patients — ranging from spikes in mental health to safety concerns regarding an in-person doctor’s visit during a global pandemic. Most recently, the Covid-19 pandemic has shown the agility of the healthcare industry to innovate, as we have experienced a surge of medical startups emerging to accommodate new demands and gaps in the industry with digital innovations. There are a number of digital-first methods that improve the healthcare experience for patients, from remote patient monitoring to tech-enabled patient care, virtual reality in the operating room, and more.

As digital health companies solidify their services and technologies as a preference for many, and innovations continue to be developed, it’s critical for healthcare startups to understand the needs of patients and physicians. Companies can hear those important perspectives during innovation development for a successful product or treatment that ultimately propels the healthcare industry.

Improving R&D with the voice of patients and physicians

Many new medical tools and technologies being developed ultimately end up in a doctor’s office, prompting the need for startups to collaborate with physicians during the research and development phase. By engaging physicians in this critical stage, startups can ensure physicians feel confident in adopting and implementing the new innovations within their own practice.

Beyond verifying medical accuracy, physicians can provide exclusive insights to help navigate any number of strategic issues or healthcare challenges that may be unseen to a startup, as well as inform any gaps in a new tool or technology — such as a potential feature or add-on recommendation — based on what they are seeing in the field.

Complementing their medical expertise, physicians also serve as the voice of the patient; with a growing emphasis on tools and technologies being developed specifically for patient use and improved health outcomes, physicians are a valuable asset in informing startups with unique patient perspectives during the R&D phase. Physicians are in constant communication with patients, which provides them with a front row seat to their evolving healthcare needs and desires, as well as feedback or concerns regarding industry innovations at large. With an inside look into what patients need, and the ability to identify consistent trends among patient groups, physicians can share invaluable insights to startups that reflect today’s patient and help optimize new tools or technologies.

Maximizing go-to-market strategies

While the healthcare landscape is known for constant change, these transformations have created a new type of patient. Increasingly, patients are much savvier and more engaged with their personal healthcare journeys; and they are investing the time to become better informed about any health product, tool or treatment. As such, startups should approach their innovations and market strategy with the understanding that patients will do their own research and read the fine print before buying into a new product or technology.

While physicians can ensure medical accuracy during the R&D phase, moving forward these experts can help maximize startups’ go-to-market strategy. Particularly in healthcare, it can be challenging to simplify a new product or technology into layman’s terms without removing any critical medical information pertaining to use. Physicians can help startups identify key messages to include in communication and product materials, as well as common questions or concerns that may arise from patients to include in an FAQ. A physician’s — and startup’s — goal is to help patients, and by enlisting the support of physician expertise, startups can ensure easy-to-understand, transparent, and factual language within their go-to-market strategy to best reach patients.

Fuel startups with leading experts

Often, companies are challenged in sourcing the right expertise for a new project. And as the healthcare digital innovation market continues to grow at a rapid pace, time is of essence — however, startups cannot compromise real science. Thankfully, a national network of expert physicians can be found in one location.

By applying a gig economy model to healthcare innovation, flipMD from GoodRx is lowering the barrier for physicians and businesses to connect and collaborate through an easy-to-use online platform. Whether the latest innovation is in the research and development phase or ready to go to market, the on-demand marketplace for physicians allows startups to remain at the forefront of medicine and conserve their time in identifying the right expertise by posting a job with unique parameters to recruit experts from a broad range of specialties.

In today’s evolving healthcare industry and amid rising consumer demand, it’s important for startups to collaborate with physicians to successfully innovate while staying on track. Discover how to fuel your startups’ momentum by collaborating with expert physicians.

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People taking their mental health into their own hands via the use of psychedelics. Recent college graduates entering the workforce without ever stepping foot in an office. Individuals who make investment decisions based on Reddit. 

These newly emerging populations represent the forces that are shaping the future of health today, and healthcare organizations that pay attention to these new pivotal groups will stay relevant in a post-pandemic world.

These new populations are best exemplified by the archetypal personas I met Monday at an interactive event in Chicago. The event, titled Inspiration Experience: Renaissance 2022,” took place Monday at the Oliver Wyman’s Health Innovation Summit. Billed as an “immersive experience,” it was more an interactive event that featured presentations from actors and members of Oliver Wyman’s health and life sciences team.

The event summarized Oliver Wyman’s consumer research and explored four major trends that will play critical roles in accelerating digitization within major industries such as healthcare, technology, science, technology, manufacturing and education. The presentations also introduced new names for emerging consumer and employee populations, such as “digital bloomers” and “citizens of the metaverse.”

To conduct the research that informed the interactive event, Oliver Wyman surveyed more than 100,000 respondents across nine countries from August 2020 to December 2021. The countries were the U.S., U.K., Mexico, Brazil, Germany, Italy, Spain, France and China.

Dr. Who? Dr. Me

In this section, we met three characters who embodied the country’s changing health behaviors. The first was Ruchir, a young man using ketamine therapy to treat his depression. After years of unsuccessful treatments — including SSRIs (selective serotonin reuptake inhibitors) and transcranial magnetic stimulation — he began the psychedelic therapy and is finally seeing progress for his condition.

Though his mental health is improving, he is plagued with endless back-and-forths with his health plan, begging it to cover his treatment given it is the only thing that is working for him. It is doubly frustrating for him given the therapy has been proven to be effective. He is also bothered by the fact that ketamine therapy was not widely available at mental health facilities. 

Next, we met Hannah, an expecting mother who is on her way to meet with her doula. This is Hannah’s first pregnancy, and she knows she needs a doula to help guide her through the emotional and oftentimes overwhelming process of preparing for childbirth. She is grateful that she is able to afford the doula, but expresses resentment and confusion as to why her insurer didn’t cover the services. Research proves that expectant mothers who are matched with a doula have better birth outcomes — Hannah felt like her health plan didn’t prioritize her best interest of her child’s health. 

Jay, the final character, is an athlete focused on optimizing his physical performance. He is willing to try every new and existing technology available to strengthen the full spectrum of his wellbeing. However, he said that when he brought up sleep tracking technology and the other wearables that he used to understand his health to his physician, she was dismissive of his efforts to learn from his health data. 

Each of these characters represents a society that is becoming more educated and aware of “alternative” therapies and ways to measure their health. They demonstrate a frustration that more and more patients are feeling: Why should I listen to my doctor when they don’t even know all of my options? The presentation recommended that healthcare companies respond to these consumer trends by keeping their operating models up to date as new research and care delivery breakthroughs continue to emerge.

Influencers over Institutions

As exemplified by Ruchir, Hannah and Jay, patients have more health information at their fingertips than ever before. Oliver Wyman’s research revealed that people gather the bulk of this information through the Internet. It also found that distrust in experts and corporate organizations is at a high. Rather than turning to institutions, people prefer to get their information — whether it be health advice, political guidance or briefings on current events — from influencers and friends on social media, according to Oliver Wyman’s health and life sciences team.

Investors are not immune to this trend as exemplified in the concept of the “hivemind investor,” a persona representing those whose investment decisions are driven by social media. This character entered mainstream consciousness in January 2021, when the “WallStreetBets” subreddit rallied around stocks that traditional investors on Wall Street had expected to do poorly, such as Gamestop and AMC. Oliver Wyman’s research showed that this community-based approach to investing is unlikely to go away soon, so startups and companies preparing for their IPOs should be aware of this trend.

I also met the “specter of disinformation” as part of the experience. I did this by looking into a mirror — it was meant to reveal the skeptic that lives inside all of us. The presentation reminded me that in a world in which we curate our own information from the vastness of the Internet, it’s imperative that we be discerning when consuming news online. 

I was shown various TikToks and Instagram reels in which users spouted their expertise on disease outbreaks and health maintenance. Some of these videos were more outlandish than others — such as the one that argued raw milk is the only healthy coffee additive — but they all contained health information that was questionable and unvetted. It was then revealed that the accounts I was watching all had more followers than the Centers for Disease Control and Prevention. More Instagram followers, that is — so far the CDC doesn’t even have a TikTok account.

People are more likely to trust information when it is delivered by someone they can relate to, the research showed. For a growing number of people, a TikToker uploading content from their home is much more relatable than Anthony Fauci delivering information in a suit. This is a prime area where healthcare companies need to innovate — they are still struggling to handle disinformation and its effects on their customers, Oliver Wyman’s presenters said.

Mobilizing the Metaverse  

Just like social media isn’t going away, neither are digital modes of care delivery. In this session, I learned about two distinct groups: digital bloomers and citizens of the metaverse. 

Digital bloomers are people, mainly those over age 45, who entered the digital ecosystem because of the pandemic. Until then, they did things the analog way and saw no reason to change. Now, this group is becoming increasingly willing to digitize necessities, such as their healthcare interactions, banking and grocery shopping, the research revealed.

The presentation suggested that healthcare companies need to capitalize on this newly emerged group by scaling up their digital offerings and focusing on convenience for the end user. This becomes even more imperative when we think about reaching citizens of the metaverse, a term which refers to people who are willing to participate in a wholly virtual world without hesitation. 

As more and more people become comfortable with the metaverse, healthcare companies have the opportunity to tailor their products and services toward the convergence of virtual and physical reality. This could be as simple as offering more telehealth visits, or as complex as creating virtual reality experiences for physical therapy. During the interactive portion of this session, I was given the chance to take part in various VR experiences, such as a physical therapy session in which patients slash virtual balloons with virtual swords to help regain muscle strength.

The Great Renegotiation

In addition to new consumer preferences, healthcare companies also need to start adapting to new types of employees that have entered the workforce over the past couple years. For example, the workforce has seen an influx of workers who are virtual natives, meaning they graduated during the pandemic and have since taken jobs where they work almost exclusively remotely. 

Without knowing it, this group of young people have reinvented what a white collar job can look like. Many prefer remote work, enjoying the fact that they rarely have to leave the comfort of their homes and pets. Others are unsure whether they enjoy it, finding it strange to have never met your boss in person, according to the research. 

This group has a complicated relationship with returning to the office. In the survey, 87% said they do (or would) enjoy going to the office, and 86% said they would quit or look for another job if they were required to return to the office full-time. As a 2020 graduate and virtual native myself, I can attest to this — my peers and I have mixed feelings on remote work. Conducting more research to understand this population’s unique wants and needs will help healthcare companies discover ways to improve white-collar retention and build employee loyalty, the presentation recommended.

Another employee group that has emerged during the pandemic is blue collar workers who taught themselves new skills that helped them land a white collar job. As these workers shift to white collar positions and blue collar baby boomers continue to retire, the blue collar labor shortage is being exacerbated, according to the research. This will force healthcare companies to fully embrace automation and figure out how humans and machines can best work alongside each other.

During this presentation, I saw two actors have a conversation as Gen Z employees. They worked as call center employees at a regional health plan, and they were on their lunch break. The women talked about remote work concerns and how they were unsure how to advocate for better pay. One of these characters also said she “didn’t even understand” which benefits her employer was offering, claiming that the company needed to do a better job of educating her about them.

From these bemused young workers to hivemind investors to psychedelic explorers, all of these new personas are worth healthcare companies’ attention, according to Oliver Wyman’s presenters. Successful healthcare companies must continually reassess their strategies to keep up with these changing consumer and employee preferences — or they may fall behind.

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AppliedVR’s program includes a feature for users to go through guided breathing exercises, which are visualized in a 3-D nature scene. Photo credit: AppliedVR

For the past six years, AppliedVR has been distributing VR headsets to hospitals to see if it could help reduce pain and anxiety during what for many patients can be a stressful experience. Now, the digital health startup is testing its platform to see if it can have a similar effect in a home setting.

The Los Angeles-based company shared the results of a pivotal trial showing its VR program was effective in helping people manage chronic lower back pain at home. The results of the randomized controlled trial, published Wednesday in the Journal of Medical Internet Research, showed that users reported a 42% reduction in pain intensity, though the study had certain limitations.

“We were ecstatic with the results we got,” CEO Matthew Stoudt said in a phone interview, adding that he plans to make a submission to the Food and Drug Administration this year.

“Our long-term vision has always been, how do we bring this into the home?” he added. “Ultimately, we are a doctor-prescribed payer-reimbursed model. We’re focused on building a body of evidence.”

Last year, AppliedVR got Breakthrough Device designation from the FDA after publishing results showing early successes in using its program to help people manage fibromyalgia and lower back pain at home. The designation could help accelerate the company’s pathway through the FDA and, thanks to a recent regulatory change, could even lead to a short path to Medicare coverage.

The most recent study tested whether the digital program was effective in reducing lower-back pain for people that went through an eight-week program. Unlike some other virtual programs, it’s focused less on physical therapy exercises and more on cognitive-behavioral therapy for pain management.

Called EaseVRx, the self-guided course walks users through pain education and guided breathing exercises with a nature scene that responds to their breathing. For example, wind blowing in the background might calm as a user slows their breath.

“We’re trying to help people acquire key pain management skills, and the way we can enhance learning and encoding of information is to provide rapid biofeedback in an immersive environment,” said Beth Darnall, AppliedVR’s chief science advisor, who co-authored the study.

Separating immersion from intervention
The double-blind study was also designed to answer questions from the FDA on how much of the therapeutic effect was from merely wearing a headset versus interacting with AppliedVR’s program. To test this, the company created a “sham” VR program that consisted of 2-D nature scenes, designed to hold users’ attention but without a specific therapeutic effect.

While the intervention group reported their average pain intensity decreased from 5.1 to 2.9 after eight weeks, the control group saw a more modest decrease, from 5.2 to 4.

“It’s exciting that we substantially exceeded the effect of the sham,” she said.

Participants that used EaseVRx also reported reductions in pain interfering with their activity, sleep, mood and stress levels.

Study limitations
That said, the study still had some significant limitations. An important one: The vast majority of the 179 adults who participated were white, female and college-educated, representing a narrow demographic.

Since the study was not linked to medical care, all data were self-reported, other than participants’ use of the VR headset. Because of this, “…there was no ability to confirm pain diagnoses or analgesic prescription information,” according to the paper.

About 90% of users stuck with the program, which Stoudt attributed to years of work to make the headset easier to use.

In addition to seeking FDA clearance, AppliedVR plans to build a system into the headset that would capture users’ breathing rate, so that no other devices need to be connected for them to receive feedback while going through the program.

“We have a ton of scars on our back from a lot of things we’ve done wrong in terms of sending devices into the home,” he said. “Ease of use is going to be the biggest barrier to ultimate adoption.”

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Digital health startup Sharecare plans to go public through a merger with a special purpose acquisition company. Photo credit: Sharecare

Digital health startup Sharecare confirmed reports that it plans to go public through a merger with a blank-check company. The Atlanta-based startup plans to merge with a special-purpose acquisition company created by Alan Mnuchin, CEO of Falcon Capital and brother of former Treasury Secretary Steve Mnuchin.

The deal would value Sharecare at $3.9 billion and add $400 million to its balance sheet. It plans to use the funds to  grow its business, build out its salesforce, and help pay for its recent acquisition of healthcare artificial intelligence startup Doc.AI.

Sharecare was founded in 2012 WebMD creator Jeff Arnold and TV personality Dr. Mehmet Oz. Started as a health and wellness social media platform, the company later began working with heath plans with its acquisition of Healthways’ population health services business in 2016. It has raised $450 million in funding to date.

“We started Sharecare to leverage innovations in consumer technology – specifically the smartphone – to create a frictionless experience that engages people across the dynamic continuum of their healthcare needs,” Arnold said in a news release. “By integrating fragmented point solutions and bringing together stakeholders across the healthcare ecosystem into one connected virtual care platform, we believe that Sharecare is uniquely positioned to transform the way people access, providers deliver, and employers and health plans administer high quality, cost efficient healthcare.”

Blank-check company Falcon Capital Acquisition Corp. will bring $345 million of cash held in a trust to the deal. Private investors including Koch Strategic Platforms, Baron Capital Group, Eldridge, Woodline Partners LP and Digital Alpha will contribute $425 million in a private investment in public equity (PIPE).

Anthem will also make a direct investment into Sharecare for an undisclosed amount after its chief digital officer, Rajeev Ronanki, recently joined Sharecare’s board of directors. 

“Through this relationship, we will leverage human-centered design and digital technologies, including artificial intelligence, that increase consumer engagement, deliver more affordable healthcare, and achieve better health outcomes through services such as next generation personalized healthcare concierge and advocacy services,” Ronanki said in a news release.

After the acquisition closes, Falcon will own roughly 20% of the company. Mnuchin and Jeff Sagansky, an independent director of Falcon, will join Sharecare’s board.

Sharecare has a hodgepodge of features, from pharmacy discount cards to a smoking cessation app to a tool that’s supposed to detect a user’s stress levels from listening to their voice. So far, the lion’s share of the company’s business is  its work with health plans, which are expected to bring in more than half of its revenue for 2021, an estimated $227 million, according to the company’s investor presentation.

For example, Blue Cross and Blue Shield of Arizona began offering the app to its members last year, including rewarding them for tracking their steps. Users are also instructed to answer a lengthy survey for suggestions to improve their health. Some of Sharecare’s other customers include Anthem, Centene, Humana, Walmart and StateFarm.

Another portion of the Sharecare’s business is focused on offering solutions to payers and clinicians, which brought in roughly $80 million last year. For example, it acquired claims review company WhiteHatAI last year, and it also acquired medical records company BACTES, which it rebranded as Sharecare Health Data Services.

Sharecare also has an advertising business, which brought in roughly $56 million last year. Controversially, that included sponsored health advice in Q&As; the company offers condition-specific marketing to pharmaceutical companies and touts its “real-time health profiling engine” in investor slides. But it cannot target ads to users who access the app through their insurance, only those who download it for free, according to its privacy policy.

In the last three years, Sharecare’s revenue has declined slightly, from $347 million in 2017 to $340 million in 2019. Its expected revenue for 2020 is $330 million, with the company attributing the decrease to reduced physician visits and fewer visits at its in-person diabetes clinics, according to an investor presentation.

It reported a $40 million net loss in 2019, compared to a $55 million net loss in 2018.

Still, the company said it expects to bring in $512 million in revenue in 2022, and has “multiple paths” to more than $1 billion in medium-term revenue.

The deal is expected to close next quarter, with Sharecare trading on Nasdaq under the ticker “SHCR.”

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Digital therapy startup Talkspace plans to go public in a blank-check deal that would value the company at $1.4 billion. The company, founded in 2012 by husband-and-wife team Oren and Roni Frank, lets users text or video chat with therapists.

The company will go public through a merger with a subsidiary of Hudson Executive Capital, the firm founded by former J.P. Morgan CFO Doug Braunstein. It will be listed on Nasdaq under ‘TALK’.

Last year, special-purpose acquisition company Hudson Executive Investment Corp. raised $360 million in an IPO. Private investors also poured $300 million into the deal, including Federated Hermes Kaufmann Funds, Jennison Associates, Woodline Partners and Deerfield.

Talkspace will get $250 million in growth capital after the merger closes. The deal is expected to close in the first or second quarter of 2021.

Here are four takeaways from the company’s IPO plans:

Employers were a big source of growth during the pandemic

Like other mental health startups, Talkspace saw a surge in users during the pandemic. In the last year, it saw the number of cash-paying users increase from 20,000 to 28,000.

But partnerships with companies like Blackstone and Google, and insurers such as Humana and Cigna, have been an even bigger source of business for Talkspace.

“Large employers are aware of the gap in the market that needs to be filled to allow more people to access behavioral health care,” CEO Oren Frank said in an investor presentation on Wednesday.

Companies had started to take notice of the shortage of mental healthcare providers before the pandemic. But the problem became even more pressing in the last year.

This led to a number of companies looking for ways to offer more mental health services—including those provided by Talkspace. In the last year, the company saw the number of covered lives increase from 2 million in the first quarter of last year to 39 million.

Talkspace CFO Mark Hirschhorn said Covid-19 had driven “tremendous unsolicited inbound interest in our commercial offerings.”

The startup forecasts its profit will double

Talkspace appears to enjoy large margins from its text-based therapy business. In 2019, the startup brought in $20 million in profit at a 51% margin, according to a slide shared with investors. For 2020, the company expects $47 million in profit with a 63% margin.

The startup also expects its revenue to nearly double, from $38 million in 2019 to $74 million in 2020.

Talkspace’s users currently pay $65 per week to be able to text a therapist or for audio messaging. For live video, the cost rises to $79 per week.

At the same time, the business model used by on-demand therapy platforms has come under fire as therapists report low pay. Therapists also are required to respond within a certain timeframe, or face docked pay, according to the New York Times.

Data about text-based therapy is limited

Although users have flocked to text-based therapy, it’s not clear whether it’s as effective as talking to a therapist face-to-face.

A small study published in 2015, funded by Talkspace, indicated an improvement in patients’ well being after four months of text therapy. But there is still little peer-reviewed research on the subject.

On one hand, a text-based approach makes therapy available to more people. Frank said more than 60% of the company’s users have never been to any form of therapy before.

On the other hand, a text message misses many important visual cues, such as a person’s body language or expression. From a convenience perspective, however, the model is likely here to stay.

“People will reasonably have a lot of questions. It is disruptive and part of a broader approach to telehealth,” Enrico Picozza, a partner at HLM Venture Partners, wrote in an email. “We were one of the first investors in Teladoc at a time when other investors were running from the company because of many challenges preventing early-adoption.  It was unclear if telehealth would work at that time but we saw the long term potential. Patients as well as physicians need to get comfortable with new technologies and modalities. Once that occurs and reimbursement is clarified, it is off to the races. We see that happening with text-based care in the near future.”

Other mental health startups see growth

Though Talkspace is a well-recognized brand, with celebrity backers like Demi Lovato and Michael Phelps, other therapy startups have seen a boom in activity over the last year. One of its competitors, Lyra Health, recently was valued at $1.1 billion, and has brought on clients including Starbucks and Morgan Stanley in the last year. Ginger, another startup that offers text-based therapy and coaching, also recently raised a large funding round.

Telehealth companies have also seen more patients seeking out therapy. Earlier this year, MDLive said behavioral health visits were its fastest-growing segment.

Photo credit: Microne, Getty Images

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aging, senior, old

The pandemic has cast a spotlight on healthcare’s technological shortcomings, accelerating the industry’s historically slow march toward digitization. Confronted with lockdowns and social-distancing mandates, providers have turned to digital communication and data management, e-visits, and telehealth to continue serving patients. In response, enterprising firms of all shapes and sizes—from tech giants to health-app startups—are scrambling to meet this need with secure, efficient, and reliable technology aimed at streamlining remote care.

For those working on the health IT side of things, this demand surge for digital healthcare feels like the dawning of a new era. It’s incredibly exciting to see providers, payers, and patients beginning to embrace digital innovation and experience the positive impact these technologies have on care delivery. Amid all this excitement, however, I find myself feeling leery of how quickly the industry is shifting toward digitization.

I think back to a recent experience my son and I had at a doctor’s office. When we entered the waiting room, we exchanged quick, nervous glances with the other patients in the space before checking in online. Our only human interaction was a brief conversation with the desk attendant—through a plexiglass divider.

While I know that touchless experiences are all the rage (and for good reason), I wonder: if we’re not careful about our migration toward digital care, will human touch and face-to-face interactions become a thing of the past? And will healthcare lose empathy if it swings too far digitally?

There is power in human touch.
Touch is fundamental to the human experience. It forges personal connections, decodes human emotion, and—from a healthcare perspective—promotes trust and healing.

In his book titled, “In the Hands of Doctors: Touch and Trust in Medical Care,” historian Paul Stepansky explores how American medicine has changed since the 19th century, focusing on the role of touch in building trust between doctors and patients. In it he writes, “Medicine then was all about touching, and patients welcomed their touch. It was integral to doctoring, and partly because physicians were part of the community, medicine was about laying hands.”

Using touch as a powerful healing tool is a practice that spans back even further than what Stepansky documented in his book. According to research published in the International Journal of Complementary & Alternative Medicine, the traditional shamans of the North East Australian rainforest have used touch and talk to heal mental and physical disorders for thousands of years. To the aboriginals, touch and human interaction were key to learning secret information about the body, reliably guiding them to the root of the problem.

Modern-day research corroborates these time-tested beliefs. Researchers have published countless studies over the past decade championing the power of touch and empathy in medicine by showing that:

Touch is something we crave on a primal level, and it has proven to be immensely powerful when comforting, diagnosing, and treating patients. But in our rush to digitize every aspect of the healthcare journey, are we leaving this elemental practice behind?

Technology will never replace human interaction
Effective, modern medicine cannot survive without technology. As someone who works for a rehab therapy software company, I fully understand the impact EMRs, mobile apps, telehealth, and general treatment technologies have on improving patient care and outcomes. Regardless of how intuitive the software—or how advanced the technology—patients will always highly value and seek out human touch because:

  1. They remain wary of AI and other nuanced technologies. According to a recent Harvard Business Review report, “patients believe that their medical needs are unique and cannot be adequately addressed by algorithms.” Patient experiences aren’t meant to be 100% digital. And despite the accuracy of computers, humans prefer to seek care from other human beings.
  2. They have emotional needs. And as such, life-altering diagnoses and unforeseen outcomes are best delivered by a living, breathing, feeling individual who can fully understand and address these needs.
  3. Physical examinations are reassuring and restorative. Abraham Verghese, a physician, author, and Professor for the Theory and Practice of Medicine at Stanford University has spoken extensively about the importance of this rudimentary practice, stating that “when [physicians] shortcut the physical exam, when [they] lean towards ordering tests instead of talking to and examining the patient, [they] not only overlook simple diagnoses…[they’re] losing a ritual that I believe is transformative, transcendent, and is at the heart of the patient-physician relationship.”

We must ask ourselves how we can preserve touch in health care

Unfortunately, I don’t think there’s a clear-cut solution to this question yet. At best, technology helps providers reach more patients, reduces administrative burden, and expands access to treatment. At worst, it creates a physical barrier between provider and patient, extinguishing empathy and damaging patient rapport. All things considered, technology’s sole constant is that it will only be as good as the people who created and are using it.

So, from a health technologist’s perspective, I’ll offer up the following considerations for developing digital health tools in the years to come:

  • Focus on the problems rather than the potential solutions
     It’s easy to get distracted by the sheer number of possible solutions your technology can provide. Instead, prioritize your focus by tackling the problems that will deliver the biggest impact once solved. Then, commit your energy to understanding the nuances of those problems. This mindset keeps patient needs front and center, steering you away from feature-rich products that deliver little benefit.
  • Be mindful of unintended consequences. Digital patient intakes and touchless experiences were created for all the right reasons. Yet, however well-intentioned they may be, digital tools always run the risk of producing unintended consequences. As such, physicians and health technologists must work together to understand what problems might occur (e.g., misdiagnoses, overlooked symptoms, missed chances to develop a rapport with patients) if technology is left unchecked.

Medicine will never progress without technology—there’s no denying that. But for the foreseeable future, human interaction remains an instrumental part of the healthcare experience. So, moving forward, healthcare professionals must find a way to blend the sophistication of technology with the power of touch in order to continue improving patient experiences, care, and outcomes.

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Earth planet with global routes and light dots representing global connection and communication.

Jonathan Siddharth, co-founder and CEO of Turing, talks about how the rise of Turing, a platform that provides access to a global pool of 170,000 talented software engineers in more than 50 countries, is supporting the needs of the healthcare industry and other sectors.

Why did you start this company?

While building out my prior startup, my co-founder and I found it increasingly difficult to hire highly skilled software engineers in Silicon Valley. There was simply a shortage of qualified candidates. As a result we turned to working with remote developers. But there was no system to effectively identify remote developer candidates with the right skills. So we had to develop our own system. The experience taught us that although talent exists everywhere around the globe, that’s not the case with opportunities for challenging work at competitive earnings.

Turing CEO Jonathan Siddharth

What specific need/problem are you seeking to address in healthcare?

Over the past few years, the healthcare industry, along with most other industries, has undertaken a massive digital transformation. This includes a wide range of startup companies employing digital technology to do everything from using AI to identify new drugs and speed up clinical trials, to creating apps to providing easier access to health services and even decrease the cost of health insurance. Every major healthcare and pharmaceutical company is also on their own journey of digital transformation.

The fuel that enables this digital transformation for both startups and major healthcare concerns is access to highly qualified software engineers. Yet, the availability of such talent is severely limited in many major markets, such as Silicon Valley, New York, London and other major centers of tech innovation.

Turing was founded on the idea that while talent is global, opportunity is not. Our platform provides access to a global pool of 170,000 talented software engineers in more than 50 countries. In this way, healthcare companies that need access to highly skilled developers can use Turing to source, vet, engage and manage remote software engineers. And in doing so we are helping the healthcare industry to put the power of digital technology to work solving some of the most pressing health-related concerns facing society today.

What does your product do? How does it work?

Turing is a platform for sourcing and vetting, matching, and managing remote software engineers. Turing enables companies to reduce the time it takes to hire highly skilled software engineers from months to days. Further Turing enables companies to effectively manage remote developers, ensuring they are meeting expectations, while quickly identifying and resolving.

Turing uses advanced data science to source and vet developers, to match the developer with the right skills and experience with the needs of its client companies and to provide post-match quality control.

Turing has created a global pool of more than 170,000 software engineers from more than 50 nations. Turing has accomplished this using a platform that employs automated end-to-end vetting of remote engineers. This system includes self-reporting of skills by developer candidates, validation of skills through automated skill-level testing and interviews, and continuously updated on the job skill advancement.

Turing’s post-match quality control uses automated early detection and mitigation of any performance issues and collects job performance data to improve future matches.

Turing’s latest innovation employs virtual machine technology to enable developers who may not have access to the most advanced computers to work on software projects that require the latest technology. This is accomplished while simultaneously protecting the client’s code and resources and detecting any possible fraud on the part of the remote developer.

Is this your first healthcare startup? What’s your background in healthcare?

We are a company that helps other companies source, vet, hire and manage remote software developers. As the healthcare industry undergoes digital transformation at every level, from discovery of new drugs to managing subscriber health benefits, access to highly qualified software engineers has become critical to the success of every company in the healthcare industry.

Turing was designed to help companies in the healthcare industry meet this challenge. We have a great deal of experience working with healthcare companies and understand their special needs.

We should note, one of our key executives, Prakash Gupta, has extensive experience in the healthcare industry.

What is your company’s business model?

Turing’s revenue is based upon fees charged to customers for its sourcing, vetting, matching and managing services of remote software engineers. Customers pay Turing for hours worked by remote software engineers and Turing handles all payments to those engineers, making the process seamless for both customers and engineers.

Who is your customer? How do you generate revenue?

Our customers are both startups (at the Series A level and above) and the enterprise, both traditional and technology unicorns. Basically any company whose business success is dependent upon access to highly skilled software engineers, which today is basically every company in every industry.

In the healthcare industry the need is particularly acute because many of these companies need engineers with a very high skill level, including special skills, such as experience with machine learning and AI technologies.

Our typical customer in terms of the buyer is pretty broad. They include CEOs, CTOs, VPs of Engineering and Product, and Hiring Managers. Also, CIOs, CHROs and Heads of Procurement and Product Innovation Teams, among others.

Photo: Filograph, Getty Images

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If there is any lesson to be drawn from 2020, it’s that making predictions for the year ahead is an act of hubris. Despite that, some clear trends have emerged. The pandemic has permeated every aspect of our lives: health, economics, politics, and beyond. Amid the devastation, the healthcare industry has been at the forefront.

We face more questions than answers. How quickly can vaccines be efficiently distributed across the entire populace, rather than select groups? What strategies will businesses embrace to thrive (or survive) going forward? How will the new administration tackle its inherited challenges and advance its healthcare agenda?

Thus, at the risk of being either foolish or arrogant, here are five of our predictions for healthcare in 2021.

A surge in digital health

Healthcare has often lagged other industries in adopting digital tools, but the pandemic dramatically narrowed the gap. Consumers, either unable or unwilling to leave their homes, quickly transitioned to online services for essential needs. Importantly, this even included the elderly, typically on the digital sidelines, who agreed to connect with caregivers on Zoom or FaceTime. Providers rushed to deploy new remote services to attract, treat, and retain patients, particularly for behavioral health. 

Impact: The sudden shift to digital provided access to care and introduced consumers to a higher level of convenience. For many, there will be no going back. The industry will either deliver enriching online experiences for patients of all ages, or they will find their patients siphoned off by more compelling services. 

Amid progress, this shift to telehealth and electronic communications has exacerbated health inequity. Patients who lack technology or access to affordable internet may be left further behind. It’s a danger that must be addressed at every level of the healthcare industry.

A new focus on agility

Covid-19 hit most institutions like an avalanche, disrupting nearly every aspect of operations. Some services, like intensive care and diagnostic testing, were overrun. Others were shut down as elective procedures were suspended. Employees found themselves without childcare, public transit, or the ability to work from home. Some organizations pivoted, re-assigning or re-training staff, transitioning to remote operations, and deploying tools to enable operational continuity. Others began to collapse, overwhelmed by clinical challenges, administrative failures, and financial losses.

Impact: Traditionally, organizations have prepared for specific incidents – tornados, mass casualties, and the like. The pandemic highlighted the critical value of leadership, capabilities, and culture to adapt to wholesale disruptions of their workforces, supply chains, and even business models. Going forward, planning will be done more holistically, requiring budget, advanced analytics and personal expertise. Of course, this may divert resources away from other initiatives.  

The past as a predictor of the future

If there were a succinct way of describing healthcare following the 2009 financial crisis, it would be that the strong got stronger and the weak got weaker. Organizations that were better prepared heading into the crisis and better managed during it, emerged better positioned afterward. The converse was also true, with many organizations pushed to the brink of bankruptcy.

Impact: As we found a decade ago, high performers will continue to grow, expanding their market share organically and through acquisition. Weaker performers will find themselves under siege not only from stronger players, but also from new entrants – retailers, digital healthcare providers, and others – eager to extend their industry footprint.

New risks and vulnerabilities in the virtual world

Healthcare has always been an attractive target for cyber criminals. The data is valuable, and the stakes are high. Providers face stiff penalties for data breaches and cannot afford to have the safety of their operations compromised. Equally importantly, patients need confidence that their privacy and confidentiality is secure.

However, the rush to virtual environments created new vulnerabilities. Staff began using their own devices and networks, training was postponed, and IT staff were diverted to deploying telehealth, remote monitoring, and work-from-home solutions. Clinical conversations migrated to unsecured email.

Impact: Not surprisingly, healthcare saw a surge of high-profile ransomware attacks. 2021 will be a year of security catch-up as organizations patch holes, retrain, and identify new risks created by their transformed operating environments. Furthermore, the industry will begin to address the challenges that arise as virtual care increases. Organizations may dramatically increase countermeasures to protect IT systems. If they don’t, cyberattacks and data breaches will only intensify. 

The ascension and expansion of public health

What began as a public health emergency quickly morphed into a political battle and an economic crisis, creating a three-pronged disaster. Therefore, any solution that did not address the realities of the other two was destined to fail. 

Impact: The pandemic has shown us that public health is essential to the economic and physical well-being of the country. Smart organizations will onboard this insight by listening and incorporating information, data, and insights from each leg of the healthcare stool. Operating in silos, proposals are a zero-sum game. However, by establishing public-private partnerships and working collaboratively, solutions can be crafted that meet the collective needs of our communities. Hopefully 2021 will be the year of building strong bridges.

Picture: Dmitrii_Guzhanin, Getty Images

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DXY, an online community for clinicians in China, raised $500 million in funding. Private equity firm Trustbridge Partners led the funding round, along with Tencent and GL Ventures.

The Hangzhou-based company was founded 20 years ago by Li Tiantian, DXY’s current chairman. It started as an online platform for the medical community, where they could discuss best practices and new findings. Since then, it has built out a series of in-person clinics, as well as several consumer-facing resources, such as wellness advice or medical consultation services.

Chinese technology conglomerate Tencent has been a backer of DXY since 2014, according to data from Crunchbase.

Early in 2020, the company launched a visual dashboard of Covid-19 cases, which used media and government reports to update case totals in near real-time. Johns Hopkins ended up using that as the primary data source for data in mainland China when it launched its dashboard in March.

DXY plans to use the funds to build out both its physician-facing and consumer-facing efforts. Its competitors include SoftBank-backed PingAn Good Doctor and WeDoctor, which is reportedly planning an IPO.

Photo credit: aurielaki, Getty Images

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