Sunday, September 24, 2023

The Healthtech ‘arms race’

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Shreya Christina
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Michael O’Sullivan – Managing Partner – Psychology Health.

If you’ve been following recent news, you’ve probably seen the uproar over the “bid war” between some of America’s biggest business players, including UnitedHealth, CVS and e-commerce giant Amazon. But those with an ear to the ground know that this is just the latest development in an escalating land grab for one of America’s fastest-growing industries: home medical technology. The subject of the most recent episode? Selling Signify Health for $8 Billion (subscription required), a home health technology and analytics company, to CVS Health.

The struggle to acquire Signify Health has been adequately covered in other articles. I would encourage readers to see Bruce Japsen’s report for a clear rundown of the key points, but in this article I want to look at what this acquisition represents in a broader context, why it’s important, and what it means for U.S. healthcare in the future.

The state of the current home health tech market

The global home healthcare market is growing rapidly and there have been significant acquisitions and rumors of acquisitions in this area over the past two years. Amazon announced a $3.9 billion deal to acquire technology-focused primary care start-up One Medical in July, BestBuy nearly $400 million the acquisition of patient monitoring technology provider Current Health in October 2021, and Google has something of a healthcare technology spending since 2021, with parent company Alphabet recently announcing that Verily, the health technology arm, has raised $1 billion to compete with Amazon in a home health technology business”arms race.”

Looking at the patterns behind these developments, it’s beginning to look like a sea change for the US health care system. And how could it not? Years of emerging technology-driven private sector health solutions, along with a historic and deepening gap between traditional healthcare players and the needs of the US population, met in the unprecedented Covid-19 pandemic, whose effects (still not fully explained) have made it uncomfortably clear that old-fashioned healthcare frameworks were simply not up to a health crisis in the modern world.

So if this is indeed a turning point for American healthcare, we have to ask how we got here, what’s changing and most importantly, what does it mean for patients, American citizens and the future of our healthcare system?

The Rise of Private Healthcare and the Home Healthtech Renaissance

The past decade has seen a gradual but significant realignment of the US Medicare program. KFF reported in August that nearly half (48%) of eligible U.S. health care beneficiaries are now enrolled in Medicare Advantage programs (provided by Medicare-approved private companies), up from just 19% in 2007. Federal spending on Medicare Advantage bonus payments has also increased every year since 2015. increased to at least $10 billion by 2022. The data paints a clear picture: The bulk of health care spending will soon go to private companies. More interesting, however, is the entry of tech giants such as Amazon and Alphabet into healthcare. If there is one sure sign that the future of the home healthtech industry is bright, this is it.

But it would be naive to view the entry of these tech giants into healthcare as purely altruistic. Amazon’s recent announcement of a merger agreement with iRobot, the company behind the widely popular Roomba robot vacuum, raised eyebrows at civil rights and data privacy advocates who feared the company would use these devices to collect sensitive data about the homes and private lives of their customers. It is a valid concern, and the extremely sensitive nature of the data collected by home care technologies makes the problem even more serious.

What does the new era of technology-led primary health care mean for U.S. healthcare providers and patients?

The question I don’t see many people asking right now is why we are seeing some of the biggest names in technology, as well as an increasing number of other private sector players, rushing to buy their share of the home health technology arms race. to demand. . In my view, it is an inevitable consequence of the reluctance of major healthcare players to evolve with the demands of an increasingly digital population. Of course, there has been widespread digital transformation among many healthcare facilities, but for the most part, these organizations have taken an “absolute minimum” approach. Offline systems have been supplemented or replaced by digitized versions of the same systems; but in most cases, primary care providers have shied away from real innovation in the digital space.

The power vacuum that has existed in digital healthcare over the past decade or more is now being filled by those with the necessary technological frameworks and the experience and ability to analyze big data and distribute digital services at scale. What this means for the future of the American health care system – and the American healthcare customer – is not yet judged at this stage. While many express concerns about the integrity of the companies stepping in to clean up what may become one of the most valuable tools in a new generation of health care services, we would fail to notice the many flaws of the traditional American health care system. .

Can these new players shake up healthcare? Time will tell. But my money is focused on taking technology-led healthcare on a wild ride for the next few years. Business Council is the leading growth and networking organization for entrepreneurs and leaders. Am I eligible?

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