Digital Health Embraces the Boomers
As many industries chase the teen world and the 18-to-34 demographic — retail being the most prominent — health care, that historical laggard, appears to be ahead of the game with the over-50 market.
In fact — and perhaps even more quizzical, given the ultramodern visual of baby boomers outfitted in wearable technology — digital health represents the most visible area of that investment.
Recent research conducted by StartUp Health shows that investment in digital health in Q1 2014 more than doubled year over year. And one clear trend that popped out from the data was the scope of investment focused on the over-50 market.
Led by a growing appreciation of the value of preventative medicine, venture capital funding targeted to benefit and capitalize on areas of health that impact the 50+ market represented 53 percent of all digital-health investments from 2010 to 2013. Within that, care navigation ($2.5 billion), vital-sign monitoring ($1.95 billion) and aging with vitality ($1.27 billion) were the most-funded markets. And some emerging 50+ investor areas of interest attracting excitement and investment include behavioral and emotional health, social engagement, diet and nutrition, and physical fitness.
So, what does the digital-health marketplace see that other industries are missing?
Clearly, health care is a unique industry in many ways — with a unique profile that has long cut both ways with respect to investor sentiment.
At the highest level, patient health needs seem to advance as the population ages, so there is volume to be had for the intrepid entrepreneur focused on the older crowd. In fact, 10,000 Americans enter the 50+ demographic daily, and they collectively spend $3.5 trillion a year. But at the same time, health care has historically been a quagmire — with headaches ranging from low reimbursement to active government regulation (and with the government similarly acting as the largest payor) that have made investment in the industry untenable for many.
What could be so different today as to prompt Todd Park, current U.S. chief technology officer and former co-founder of breakthrough health-information technology company Athenahealth, to say, “There has never been a better time in history to be an innovator or entrepreneur in the health care space”?
Well, pretty much everything. As a company whose charge is to help young digital-health companies with big ideas grow into successful, sustainable businesses, we at StartUp Health hear from our community of “Healthcare Transformers” — representing physicians, serial entrepreneurs, international leaders and accomplished executives from other industries who had never thought of health care until recently — that now is the time. We similarly believe that to be the case, having launched StartUp Health three years ago with the goal of playing an active hand in helping build 1,000 sustainable health-and-wellness technology businesses by 2020.
Here’s what we’re hearing and seeing:
- Government and health reform is creating opportunity for new health-care innovation to emerge, and helping industry be more successful. For example, a vault of health data was made public by the government a few years back that has spurred the formation of a number of health IT companies — and the Affordable Care Act, of course.
- Dynamic change, partly by reform and partly by market forces, is resulting in health care’s most ingrained players opening up to different approaches to doing business.
- Consumers are more in the game than ever, with their financial obligations increasing, a commitment to wellness/fitness and an expectation that choosing health care can in fact be similar to how they consider other, more familiar purchases.
- Consumer expectation and willingness (as well as a willingness by health care’s established companies to think differently) is colliding with advances in mobile and wireless technology to create an environment where startup costs are more manageable and investment capital more open to the digital-health opportunity than ever before.
- A new wave of Healthcare Transformers (innovators and entrepreneurs) are focusing on reinventing every aspect of health care.
All the environmental goodies listed above are wonderful for digital health in general and, in some cases, are particularly compelling for investment in the 50+ market. The care coordination required by the ACA and the broader focus on preventative medicine are prime examples.
So, while many other industries put the boomer market to bed and focus on serving what may appear to be the next big thing led by new entrepreneurial energy, we would say that the marriage of health care and the 50+ demographic is right on time.
Unity Stoakes is the president and co-founder of StartUp Health, a global startup platform to accelerate health and wellness innovation. The company provides health-and-wellness innovators (“Healthcare Transformers”) with a structured curriculum, access to customers and peer support designed to help navigate the unique challenges of building a sustainable growth business. Reach him @unitystoakes firstname.lastname@example.org.