Investment in Healthcare IT is on the Rise – Are We Ready for Change?

We all know healthcare is massively broken, we know that we are light-years behind every other industry, we still use fax machines, we still use pagers, and we still ask patients to courier their own documents and images.

But there is a glimmer of hope at the end of a long, dark, technology disengaged tunnel.

 

Investing in our future…

Luckily for the healthcare industry, Healthcare IT implementation and investment is growing at a rapid pace.  In April alone, $332 Million in total was invested in Health startups.  The investment has grown almost 5 times from the last year’s total in the same time period (14 deals in April 2012 versus 67 for April 2013)

Check out the slideshare below for more details on the current status of the investment in healthcare.

 

VentureBeat’s HealthBeat 2013

Since Healthcare IT is getting red hot, VentureBeat is hosting its very own conference called HealthBeat, which your very own referralMD is competing this month.

Over 150 companies applied and 10 were chosen to compete for some great prizes, including a 250K investment from Venrock.

Check out the press release here.

 

Outlook for the future

Time will tell how much the investments will pay off, unfortunately most applications that are being released have no monetization strategy, and are centered on patient’s managing their own healthcare, which are not viable businesses in the “real-world”

Monetization

Free “apps” are bad for the healthcare industry.

1. Free things are never really free. When we don’t fork over dollars for products or services, we think of them as free. But we always give up something. When it comes to online services, that something is usually personal data or content you’ve created — think Practice Fusion, whose privacy policies obscure the line between what you own vs. what they own. For consumers, that might be an acceptable bargain. But for businesses that trade may be unacceptable.

2. Free services don’t serve you. Free services can’t provide great customer service. You know this to be true if you’ve ever sent an email to a free service to get help. Imagine relying on one of those free services to run your business!. What happens when you need help, and you need it now?

3. Free services for businesses don’t last. Free services for small businesses come and go. Google Apps used to be free, now it isn’t. Free services don’t last for the small businesses because the market is so challenging to reach and serve. My guess is that understanding the market challenges is the key to why Google Apps for Business going paid is a good thing for small businesses.

Patient Centered Healthcare – a low 6% adoption rate

The problem with patient portals is that they are not seen as an integral part of the care process. In fact, we would argue that the use of the terms PHR and EHR create an artificial division – let’s just call it a CHR (Collaborative Health Record) and be done with it. But alas, such is not the case. Ask your local HCO where funding for their patient portal comes from – 9 times out of 10 they’ll say the marketing budget.

As we reported from this year’s HIMSS conference, sure there was talk of patient engagement via portals but the message was one pitched to the Chief Marketing Officer (CMO) and not the other CMO, the Chief Medical Officer.

Yes folks, today the patient portal has very little to do with the patient being an integral part of the care team. No, the patient portal is all about improving consumer/patient satisfaction scores and more tightly linking the consumer to a given HCO. Therefore, is it any wonder then that if a patient portal is not viewed as an integral part of the care process then physicians are unlikely to actively advocate its use leading to a market where consumer adoption and use of patient portals remains at a paltry 6% or so nationwide.

 

Conclusion

Our choices in healthcare are numerous, but many are not properly set up to build a solid company with profit.  This is a red flag that most providers need to review and make a decision when they choose a company to do business with.  Will the company be in business in 3 to 5  years?  Will they help me with my business?  Will they make me money? or at least generate a savings?

Choose wisely my friends…