Health Care Innovation is Hurtling Forward, Despite Policy Uncertainty

Yes, Washington, D.C. has been tied in knots for months over the future of Obamacare. Or more specifically, how and whether the federal government should pay for health insurance for certain consumers. In the meantime, health care innovation is hurtling forward as evidenced by investments and operational commitments by health care companies.

Digital Health Investments

StartUp Health’s 2017 Global Digital Health Funding Mid-Year Report compiles seed, venture, corporate venture, and private equity funding for the period January 1 through June 30, 2017 and shows 2017 investing in digital health “has already surpassed previous years in overall funding.” The second quarter of 2017 was the biggest ever, and that single quarter accounted for more money invested than total annual funding for 2010 and 2011 combined. In the first half of 2017, more than 300 digital health deals were inked, worth more than $6 billion.

CHART: Digital Health Funding 2010-2017 (YTD) from StartUp Health

Many of the digital health funding supports innovative ways of delivering health care.

For example, CareDox is a company focused on helping public school health programs be more efficient. More than 50 million students are served by school health care clinics in the U.S., making it one of the largest medical networks in the country. Innovating this front line of health care for kids could improve both the health care children receive and the coordination of care between schools, medical professionals, and parents.

One of the largest investments has been for GRAIL, a big data/analytics company that has received nearly $1 billion since its inception. GRAIL was started by Jeff Huber, who may not be a household name to health policy wonks, but I can guarantee you use something he’s built. Jeff was a senior engineering leader at Google who spearheaded the harnessing of massive data sets to create Google Ads, Apps, and Maps. After those projects, but just before starting GRAIL, he was working on big data at Google Life Sciences as part of Google X (aka The Moonshot Factory). Jeff’s vision is to combine “science, technology, and clinical studies to reveal cancer at its beginnings. To detect cancer early, when it can be cured.”

Being a glass half-full type of person, I get very excited to read about all the new health care ideas out there being turned into businesses. I’m just covering a few in this blog, but if you want to see a more detailed list, mobihealthnews covered the 81 digital health funding deals for Q2 2017.

Health Insurer Innovation

Several health insurers also announced innovative approaches recently (which we will cover more in upcoming blogs) indicating to me, that while big health policy issues are still up in the air, businesses need to keep providing services and coming up with new products to maintain current customers and win over new ones.

An innovative example of a company combining digital health innovation with health insurance is Bright Health. A Minneapolis-based health insurance company launched in 2016 by former UnitedHealthcare CEO, Bob Sheehy and two partners, Bright Health will be selling plans in the individual market in 2018 in select geographies, including Colorado. The company just landed $160 million in venture capital based on this thinking from one of their investors:

“We’re thrilled to continue our partnership with Bright Health to disrupt a complicated industry where consumers are demanding change and leading health systems are hungry to deliver.”

The innovation Bright Health is offering is the selection of a sole health system as a deep partner in a state, and to use apps and other tech tools to attract consumers. In Colorado, Bright Health has chosen to partner with Centura Health to deliver care to its members. While health policy types might bemoan this type of “ultra-narrow” network, time will tell if consumers prefer to trade less choice for lower premiums.

Watching big picture policy debates, it’s easy to forget that investors and companies across the U.S. are coming up with all kinds of new ways to serve health care customers. The dust will eventually settle (I think!) on whether 2017 is the year to change Obamacare, but in the meantime innovation is hurtling forward which is much better way to see what the future of health care looks like in the U.S.