Covid-19 may turn out to be digital health’s tipping point, two Silicon Valley venture capitalists said Wednesday. The industry’s rapid shift could be beneficial for patients, providers, and some industry players — but it also might prove detrimental to companies that swerved toward Covid-19 and away from the bedrock of their businesses.
“I’ve been worried about all of these companies that have suddenly pivoted to Covid overnight,” Lisa Suennen, an investor who leads the firm Manatt’s venture capital fund and its digital and technology businesses, said in a panel at the STAT Health Tech Summit.
“I feel like every business plan, they crossed out ‘AI’ and wrote in ‘Covid-19,’” she added.
Suennen said it’s encouraging to see so many health tech companies pitch in on the Covid-19 response. Tech companies have launched symptom bots, built digital contact tracing technology, and created new tools to analyze case data and spot emerging hotspots. But, experts said, a full pivot to Covid-19 — at the cost of their core capabilities in other areas of health tech — might not be a smart strategy for every company.
“I think if you have to rejigger, redeploy, rehire, and change the internal working of the company, … you’re going to run into long-term problems,” said Kiersten Stead, managing partner at Data Collective. “We all know this is a business that requires a longer-term commitment, so even if you can work on something for 12 months, that’s not necessarily creating value over time.”
Stead said she and many other venture capitalists and investors saw a flood of companies shift their focus to Covid-19, hoping to address some aspect of the health crisis. For some companies, Stead saw the effort as “wishful thinking.”
“I think because of the scope, breadth, and speed of a pandemic, unless you were already working in the space and had a core competency to do whatever you were proposing to do … we didn’t believe it was a realistic business model,” she said.
But it’s clear that the pandemic has dramatically accelerated digital health’s adoption with such speed and volume that it’s difficult to see health care turning back from tech tools. In some ways, it’s taken 20 years for digital health to become an overnight success, Suennen said.
That’s easiest to see in telehealth, which has allowed patients to see their doctors when in-person visits were — and may still remain — inadvisable.
But digital health also extends to remote patient monitoring and synthetic clinical trials, which combine health records from many patients to test therapies, Stead said. The growth in those areas could prove crucial for pharmaceutical companies whose patient recruitment efforts for clinical trials may be lagging due to physical distancing practices.
“The other tipping point — or indicator of one — is the ability of Teladoc and Livongo to be perceived as such a successful merger,” Suennen said. The combined company potentially represents “a platform to manage care delivery in digital health as opposed to a zillion little niche products for your left big toe and cheek and something else. But all together, it can take care of people more holistically.”
That strength may outlast the pandemic. “This is not just a stopgap,” Suennen said about telehealth. “The energy behind proof is growing more and more, as it should.”
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