Amid the COVID-19 pandemic, we saw rapid advancements in digital health and health technology as the virus prompted investors to pour substantial funding into the sector. When we could no longer leave our homes, healthcare providers quickly embraced telehealth capabilities. As we enter 2024, the landscape continues to evolve.
While funding has slowed down since the height of the pandemic, the industry remains dynamic and full of potential, particularly in the realm of artificial intelligence (AI), promising to revolutionize healthcare operations and reduce administrative burdens for clinicians. In this post, we will explore what these technological evolutions–like Amazon’s recent launch of its chronic condition management portal–mean for the healthcare industry, discussing company transparency, consolidation prospects, how private companies advertise to consumers, and more. As we navigate this ever-changing landscape, it’s essential to understand how these developments shape the healthcare industry and what lies ahead.
The year 2021 witnessed a remarkable increase in investment in digital health companies, encouraged by the urgency brought about by the pandemic. However, as 2022 approached, the industry experienced a slowdown in funding. This trend continued through 2023, primarily due to higher interest rates constraining venture capital fundraising efforts and a stagnant IPO market, which limited cash flow for startups. However, experts suggest that this decrease represents a necessary adjustment following 2021. Predictions for digital health funding in 2024 indicate a stabilization, with the possibility of an increase in the latter part of the year, though not to the same extent as the previous boom.
The decline in funding has urged startups to consider strategic partnerships and acquisitions. Digital therapeutics, mental health providers, and weight loss companies are emerging as attractive targets for acquisition. Jennifer Goldsack, CEO of the Digital Medicine Society, emphasizes the importance of integrating quality solutions into more comprehensive tools to meet the demands of healthcare giants like CVS Health and ambitious startups.
With several digital health startups established during the investment boom, 2024 could see a shift in focus toward assessing the effectiveness of these solutions in improving access to quality care. Cheryl Cheng, founder of venture capital firm Vive Collective, highlights the need to distinguish between companies with robust clinical models and sound unit economics that can scale and those that merely benefited from the pandemic’s tailwinds. As the industry matures, the viability and sustainability of these digital health solutions will become clearer, ultimately determining their long-term impact on healthcare.
The buzz surrounding the potential of AI in healthcare surged in 2023. Generative AI technology, capable of creating new content such as text and images, garnered considerable attention. In 2024, the hype around AI may subside as developers focus on refining the foundations laid in the preceding year. Transparency will assume greater importance, particularly for clinical decision support tools and algorithms that impact patient care and insurance claims. Regulatory scrutiny is likely to increase, as witnessed by lawsuits against insurers using algorithms to assess care needs. Transparent explanations of algorithmic workings will be crucial in ensuring trust and accountability.
While digital health promises numerous benefits, it also introduces significant cybersecurity challenges. Healthcare data breaches have exposed sensitive patient information, prompting concerns and regulatory scrutiny. The Office for Civil Rights reported a 93% increase in large breaches between 2018 and 2022, with a 278% spike in ransomware attacks.
Amy Magnano, a partner at the law firm Morgan Lewis, emphasizes the evolving threat landscape, with smaller healthcare providers and business associates increasingly targeted by sophisticated cyberattacks. The use of AI and machine learning by attackers further complicates the situation, enabling more convincing phishing attempts. To counter these threats, some states, like New York, have proposed their own cybersecurity regulations, while others may follow suit.
The federal government, through the HHS, is also exploring ways to enhance cybersecurity requirements for hospitals, potentially adding to the regulatory burden. However, there is a growing realization that focusing on infrastructure, funding, and workforce upskilling may be more effective than fragmented state-level regulations.
So, how have companies like Amazon taken advantage of the recent rise in technology? The healthcare industry is no stranger to Amazon’s relentless pursuit of innovation and expansion. Amazon’s journey into healthcare has been marked by a mix of ambitious endeavors and pragmatic choices. While it initially explored the idea of building out healthcare products and services, the company found greater success in connecting consumers with existing care delivery options. This strategy has proven effective, and Amazon is once again relying on it with health condition programs.
Health condition programs by Amazon are designed to connect individuals dealing with conditions like diabetes and other chronic ailments with management programs. These programs are often available through individuals’ insurance plans at no additional cost to them. This initiative is a partnership between Amazon and Omada, a 12-year-old provider specializing in chronic condition management.
Among Amazon’s existing healthcare businesses, health condition programs bear the closest resemblance to Amazon Clinic. Amazon Clinic is an online marketplace connecting users with third-party telemedicine providers. Since its launch, it has expanded nationwide, introduced video calls, and broadened the range of treatable conditions.
While Amazon’s venture into healthcare offers immense potential, it has raised concerns about something we previously discussed–data privacy and security. With health condition programs, Amazon plans to share consumers’ information with provider partners like Omada to determine eligibility for the service. Omada, in turn, will inform Amazon of a consumer’s eligibility and enrollment status. As a result of these concerns, Amazon has assured customers that the protected health data they share with the company will be safeguarded in accordance with the HIPAA privacy law.
In conclusion, the ongoing technological advancements in the healthcare industry, particularly the integration of AI, can have profound impacts on the sector. It is important that companies prioritize the establishment and adherence to rigorous safety and compliance standards as they develop and implement AI solutions. The assurance of patient safety and the maintenance of the highest ethical standards must remain the top priority.
Companies must actively engage in transparent practices, ensuring that consumers are fully informed about the data used to train AI programs. This transparency fosters trust and accountability, which is essential for the successful adoption of AI-driven healthcare solutions. New programs such as Amazon’s chronic condition management portal will encourage individuals to be increasingly active participants in their healthcare journeys, taking AI-generated suggestions into consideration for diagnoses and treatment plans. This shift empowers individuals to make informed decisions about their health.
With this new healthcare technology, it’s noteworthy that consumers may also receive direct advertising from private practices on platforms like Amazon. This direct engagement between healthcare providers and patients can enhance accessibility to healthcare services and promote personalized care experiences.
That said, it’s crucial to acknowledge the persistent threat of cyberattacks in the digital healthcare realm. As the industry continues to embrace technology, cybersecurity must remain a top priority. Healthcare organizations should remain vigilant, focusing on upskilling their workforce to protect against evolving threats and safeguard patient data. In essence, the ongoing technological evolution in healthcare is reshaping the industry. It offers immense potential to improve patient care and empower individuals in healthcare decisions. This comes with the responsibility of safeguarding patient data and ensuring the highest standards of safety, ethics, and cybersecurity are upheld.