The year 2021 was a banner year for digital health with around $57 billion invested into the sector. Telemedicine and mental health were among the verticals that received the most investment dollars. It was also the year when value-based healthcare became evidently complemented by technology, a tendency being accelerated by the pandemic.
The growing momentum of health tech, in turn, makes VCs bullish on the long-term potential of health tech, especially in telemedicine, biopharma, and medical devices. But will the momentum stay the same for health tech in 2022? Let’s find out.
The state of digital health in 2022
According to CBInsights, the global digital health funding has dropped in Q2’2022 compared to 2021. Thus, it now stands at $7.1 billion, falling 32% from Q1'22 and 58% from the highest watermark in Q2' 21. The decrease has influenced almost all digital health areas, yet leaving health IT at the same level.
Digital health - a miscellany of software, technology, wearables, and applications that cater to the consumer, i.e. patient.
Health Informatics or IT - software designed specifically for healthcare providers that aim to make the process of tending to a patient more accurate.
The global digital health market has also experienced a funding decrease of 57% as a result of supply chain woes, a volatile stock market, and turbulent geopolitics.
But there’s still a bright side for digital health in 2022. Europe, for example, has seen an increase of 6% in funding growth, while health IT funding grew by 27%. And although the unicorn landscape is not as rich as it was in 2021, this year has still welcomed some disruptors, including Viz.ai, BostonGene, and others.
Now let’s see what areas have reaped the most buzz or are poised to do so beyond 2022.
What Impacts The Industry in 2022?
The healthcare industry has seen the advent of a wide range of innovations over the last few years. Yet, there’s a common denominator that links all those applications and that’s technology. In particular, the market for artificial intelligence in healthcare is estimated to reach over $194 billion by 2030. So let’s see how machine intelligence has toppled ours.
Digital therapeutics funding reaches over $1 billion in 2022 YTD
DTx or digital therapeutics is an emerging field of healthcare that uses digital technologies to prevent, manage, and treat medical conditions.
Unlike traditional treatment and medical devices, digital therapeutics leverage technology to target disease at the level of behavior or physiology. This allows it to be used to treat a wide range of conditions, from chronic diseases like diabetes to mental health conditions like anxiety and depression.
DTx’s can be prescribed by physicians as stand-alone treatments or complement drug-based therapies.
In simple words, DTx are complex applications that rely on real health outcomes and clinical evidence to treat a wide range of diseases and disorders. Typically, they are approved by the FDA or undergo any other form of regulatory scrutiny.
As you may have guessed, it’s data processing and artificial intelligence (ML and NLP, to be exact) that gave birth to digital therapeutics. And with smartphones in everybody’s pocket, delivering DTx has become easier than ever before.
AppliedVR's EaseVRx became the first virtual reality-based digital therapeutic for pain relief to be granted Food and Drug Administration approval. EaseVRx is a prescription-use virtual reality headset that helps with pain reduction. Device users reported, on average, a 42 percent reduction in pain intensity, according to one study.
According to a study, people who used a device reported a 42% pain reduction.
Mental health tech raises $1.5 billion in 2022 YTD
Sadly, mental illnesses aren’t rare in the United States. Thus, almost one in five U.S. adults suffers from a mental illness. That’s almost 53 million people.
Mental health tech is a growing field of technology that is designed to help people with mental illness. This includes things like mood trackers, apps that help you manage your medications, and even virtual reality therapies. Mental health tech is a growing field because mental illness is a major problem in the world, and we need new ways to treat it.
Thanks to machine intelligence, therapists can now comb through large amounts of historical data to track family histories, past behaviors, and responses to prior treatments. Combined, this information empowers therapists to better diagnose a patient and choose the most effective treatment.
The big promise AI holds for mental health in the future includes:
- Affordability - mobile applications are cheaper compared to common expenses associated with in-person appointments (therapists’ rates, commute, etc.)
- Anonymity - over 80% of people choose robots over humans to discuss their mental health issues.
- Efficiency - smart algorithms have already proven to be efficient in interpreting behavioral signals.
The application matrix of mental health tech has significantly grown over the last few years and is slated to gain traction in the future. Remote patient monitoring, mental health apps, virtual reality, and CBT apps are just a sliver of everything that mental health tech has to offer
Calmerry, an online mental health platform, developed by The App Solutions.
Clinical trials tech raises over $1 billion in 2022 YTD
Clinical trials are a critical step in the development of new treatments and therapies. They provide valuable data that can help us understand how a new treatment works, what side effects it may cause, and whether it is safe and effective.
And you know what’s shocking? The number of years it usually takes for a new drug to hit the market. In the United States, it takes an average of 12 years (!) for an experimental drug to make it to the medicine cabinet. Moreover, only 5 in 5,000 drugs go from preclinical testing progress to human testing.
In recent years, AI has been used increasingly to reduce the time and costs it takes to develop a new drug. In clinical trials, algorithms can help to identify which patients are most likely to respond to a new treatment. Machine learning can also help to monitor patients during the trial to ensure that they are adhering to the treatment plan.
According to Deloitte, AI-powered applications play a crucial role at all stages of clinical trials - from trial design to sign-off. Advanced data analytics and automation are the main unique selling propositions of AI for drug development.
In the future, computer intelligence is projected to bolster the design and execution of faster, and more patient-focused clinical trials by processing structured and unstructured patient data in real time. This analysis will be complemented with data from patient populations to generate 360-degree evidence.
Telehealth funding hits over $5 billion across 290 deals in 2022 YTD
Until the pandemic, only a few tech scions thought of telemedicine as a viable solution with long-term potential. According to a poll, in January 2022, 38% of patients received care via telehealth. In 2021, this figure was around 48%. But despite the drop, it's still higher than before the pandemic
Telehealth is the delivery of healthcare services using telecommunications and digital technologies. It allows patients to consult with healthcare providers from a distance using video conferencing, telephone, or the internet. Telehealth can be used to provide a wide range of services, including primary care, mental health care, and specialty care.
Telemedicine platforms bring benefits to both types of users:
- Doctors can securely exchange files with patients via secured live chat, provide quick diagnoses, receive laboratory tests, consult a patient, and others.
- Patients can receive high-quality medical services without leaving their homes, schedule appointments, pay for medical services online, and others.
The pandemic has reinforced the need for virtual health care. Our team, for example, has built a custom telemedicine platform for a Berlin-based clinic that needed a remote communication solution to decrease the number of offline visits during the pandemic.
Here's what a telemedicine platform looks like - a healthcare hub conventiently fit into your smartphone.
Health IT funding totals $5.1 billion across 254 deals in 2022 YTD
Finally, health informatics has got a boost in 2022 as healthcare providers flocked to electronic health records, e-prescribing, and personal health records. Unlike traditional health data storing, electronic records allow for rapid information sharing, reduced paperwork, and better follow-up - things much-needed in the modern healthcare system.
Health IT can free you to focus on your health instead of on the everyday hassles of managing your health care. [1]
According to statistics, the global healthcare IT market size was valued at over $250,577 million in 2020 and is estimated to garner over $880,688 million by 2030. The full saturation of health IT is only one piece of the puzzle for resolving a system-wide lack of interoperability.
Technology Is Making Healthcare More Human
The last few years have laid bare the inefficiencies of the traditional healthcare system. Lack of visibility, labor shortages, preventable medical errors, and other problems significantly impact patient outcomes and adversely affect the public perception of traditional healthcare.
Paired with technology, the healthcare system can unlock more interoperability, reduce medical errors, and cut down operational costs. So it’s no wonder that we’re moving to a completely new, digital plane of medicine where artificial intelligence, data analysis, and connectivity step in to make our lives better.
[1] Health IT: Advancing America’s Health Care. The Office of the National Coordinator for Health Information Technology.
https://www.healthit.gov/sites/default/files/pdf/health-information-technology-fact-sheet.pdf
https://www.healthit.gov/sites/default/files/pdf/health-information-technology-fact-sheet.pdf