The interest of tech companies is a great thing for our industry. This interest draws more attention, creativity and resources to healthcare.
But what are the top three reasons these tech companies are becoming further interested? Bob Kocher, MD, Internist and Partner at Venrock, Palo Alto, California fills us in:
1. Aging Demographic
“An additional 17 million Americans have gained health insurance coverage under the ACA, aka Obamacare, at a time when retiring Baby Boomers are already fueling a spike in demand for healthcare services,” says Kocher. “We’re adding 10,000 Medicare beneficiaries every day and older people spend more on healthcare, so from a purely economic standpoint, the opportunity in the healthcare market is enormous, interesting, and growing,” says Kocher.
2. Market Opportunities Created by the Affordable Care Act (ACA)
The Affordable Care Act (ACA) requires an enormous amount of data on cost and quality be made freely available. In addition, digital health applications, mobile phones, and wearable sensors, as well as breakthroughs in genomics, are creating truly big data sets in health care. These data contributes to greater market efficiency, more consumer-oriented products and services, and clinical care that is evidence-based and personalized.
“Since passage of the Affordable Care Act [in 2010], these trends have combined and we’ve now got more than $10 billion of new venture capital dollars flowing into the healthcare IT industry, and more than 500 new companies created,” says Kocher.
3. Investor Enthusiasm for Software Solutions
Over the last five years, tech titans including Google, Intel, IBM, and Apple have set their sights on the roughly $40 billion healthcare IT market, joining a proliferation of Silicon Valley startups that are developing new products to help achieve the “Triple Aim” of better care, improved outcomes, and lower costs.