May 2020

The coronavirus pandemic has slowed the momentum in growth for the healthcare industry this year, but experts say COVID-19 has brought opportunities for healthcare startups to succeed and innovate.

In 2019, billions were invested in digital healthcare companies, with $7.4 billion invested across 359 deals, according to Rock Health, a venture fund for digital health. A strong first quarter showed 2020 would have continued on that trend, but the pandemic caused investors to slow down, according to a panel of industry experts who spoke on Industry Update and Market Trends for HIMSS20 Digital. Moderator Indu Subaiya is a cofounder of Health 2.0 and senior advisor for HIMSS.

Still, digital communication companies are thriving amidst a boom in telemedicine brought on by the pandemic, while companies such as Doctor on Demand are hiring more physicians to meet the surge in virtual care.

Megan Zweig, director of research and marketing at Rock Health, said companies that strengthened during the recent period of growth are stepping up to challenges created by the pandemic.

“Without COVID, the story would have continued from last year as this was a healthy, growing space with a lot of momentum behind it,” Zweig said. “I think that momentum has turned into just incredible urgency and demand for communication, testing, monitoring, care – all of those things done at a distance.”

Zweig said $3.1 billion invested in 104 digital health companies at the start of this year indicates continued growth from 2019, a year that also saw Google purchase Fitbit. The pandemic has not caused all investors to stop funding healthcare companies, but that there are mixed feelings on how much capital will be available for startups this year, she said.

“A lot of them are still planning on deploying capital at the same rate they have in the past. Others said they are pulling back,” Zweig said. “The vast majority of them do believe healthcare startups are going to have a harder time raising capital this year than in the past.”

Zweig described the pandemic as a “stress test” for a healthcare system in which digital platforms had been strengthening in recent years.

Lawrence Byrd, technology evangelist for communications APIs for cloud-communications-provider Vonage, said many of Vonage’s customers are telehealth providers. Many have seen 20 times their normal traffic in the last few weeks.

“We’re seeing massive expansion of the use of telehealth, and I think it has gone very well,” Byrd said.

Part of what has allowed digital health platforms to find success is the fact that many applications had already been designed to meet HIPAA privacy standards, according to Byrd.

Panelists said privacy has become a growing concern for people using digital platforms such as Zoom. Use of “off-the-shelf” products in the education field has led to privacy and security threats, Byrd said.

“Tele-industry, much more mature. We have the applications,” Byrd said.

Many adequate applications for telemedicine already exist in doctors’ offices, and, since they are generally built in the cloud, they are easy to expand.

Jumping into the race for innovation has not been easy for all companies during the pandemic.

Home-test companies like EverlyWell initially saw an opportunity to produce COVID-19 tests, according to Jonah Comstock, Editor-in-Chief and Director of Content Development with HIMSS Media. The Food and Drug Administration initially indicated it would relax restrictions on producing tests, but walked that back out of concern for unvetted tests hitting the market.

“Similar to telehealth, they saw sort of a time to shine,” said Comstock, who said home-testing had otherwise begun to “arrive” before the pandemic. “This crisis is ultimately, once they work out all the kinks, is going to rush it into arriving even faster.”

With growing use of digital medicine will come a debate about how companies should be held accountable for their products, holding vast storages of private healthcare data, according to Travis Holt, CEO and cofounder at BCP Tech, a division of Brush Creek Partners. Recent data breaches, such as the one at Equifax, have raised awareness among consumers for privacy protection.

Precedent has been set for companies selling digital products. For instance, the buyers of Microsoft Office 365 agree in the terms and conditions not to hold the company responsible for the product’s use, he said. Holt expects the courts to decide in the next five or 10 years whether companies can similarly remove their liability when their products are used in sensitive industries such as healthcare.

“I think there’s going to have to be some tragedy and then some subsequent litigation,” Holt said. “As we dig into healthcare, which is a much more sensitive area, I think we’re going to see a shift in the way that’s perceived.”

Max Sullivan is a freelance writer and reporter who, in addition to writing about healthcare, has covered business stories, municipal government, education and crime. Twitter: @maxsullivanlive [email protected] 

“Hello, this is Congressman Jim Clyburn. I proudly represent the 6th Congressional District of South Carolina. I also serve as the House Majority Whip, as Chair of the House Select Committee on COVID-19 and as Chair of the House Democratic Rural Broadband Task Force.

This week, members of our task force and the Energy and Commerce Committee Chair Frank Pallone unveiled our plan to connect all Americans to affordable broadband internet. The COVID-19 pandemic has laid bare the digital divide that exists in our great country.

Families that lack accessible, affordable high-speed internet are unable to work from home, learn remotely and consult with medical professionals via telemedicine. These are all critical components to our ability to be safe, healthy and productive during this crisis.

I am reminded of a book, The Next Greatest Thing, which chronicled our country’s rural electrification efforts in the 20th century. The title of the book came from comments made by a farmer speaking to a gathering in a small rural Tennessee church in the 1940s. He proclaimed, ‘Brothers and sisters: I want to tell you this. The greatest thing on Earth is to have the love of God in your heart. And the next greatest thing is to have electricity in your house.’

Just as the Great Depression made clear to many that electricity was the ‘next greatest thing’ in the 20th century, the coronavirus pandemic is making clear to all that broadband is the ‘next greatest thing’ for many in the 21st century.

Our announcement this week of the House Democrats’ plan to connect all Americans to affordable broadband internet is an updated and expanded version of the broadband provisions of our framework for Moving America Forward. It is the product of significant collaboration between the Rural Broadband Task Force, the Energy and Commerce Committee and many Members of the House Democratic Caucus.

Democrats welcome recent reports that Republicans support the idea of including broadband investment in upcoming coronavirus response legislation, and the President expressed the need for affordable universal broadband when I discussed it with him in an infrastructure meeting last year.

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BAMBERG— As the nation battles the coronavirus, the need for telehealth becomes more apparent. Here in South Carolina, Palmetto Care Connections (PCC), a non-profit telehealth network, has been promoting telehealth to rural and underserved areas for more than a decade. With the coronavirus pandemic, the time for rural telehealth has finally come.

Since 2010, PCC helped rural health care providers implement telehealth solutions to see and treat patients virtually. “We focus on three areas of work – telehealth programs, broadband and technology for rural health care providers throughout the state,” said PCC Chief Executive Officer Kathy Schwarting. PCC leads the South Carolina Health Care Broadband Consortium, filing for federal subsidies that result in up to 65% savings on broadband, internet costs and equipment for rural providers.
“In 2019, PCC filed for $5,392,741 in broadband savings for S.C. health care providers, through the Health Care Connect Fund,” Schwarting said.

One of the health care providers that PCC has assisted is Bamberg Family Practice, a rural health clinic owned by Danette McAlhaney, MD. Dr. McAlhaney has been one of the first private practitioners to adopt telehealth in rural S.C. Dr. McAlhaney provides telehealth services to schools in her community, and she uses telehealth to connect patients in her office to specialists, such as behavioral health specialists at MUSC. Most recently, in March, PCC helped Dr. McAlhaney implement a telehealth platform so she can provide care from her office to patients in their homes.

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