Newark Venture Partners recently hosted its 3rd Vertical Virtual Summit. The series is intended to highlight our active investment themes and leadership perspectives from our strategic partners and portfolio companies. In this latest installment, titled Breaking Down the Walls of Healthcare, we dive deep into the macro factors that are deconstructing healthcare as we know it today, technology’s role in the evolution of new digital health solutions, and where payers and providers are dedicating time and resources to adapt to this new world. ICYMI- here’s the recap:
2020 Catalyzes the Next Evolution of Healthtech
Three massive catalysts in 2020 launched the industry into a new era:
These factors tackled some of the most pervasive barriers to effective care in our health system to date: access to care, access to data and aligning incentives across the ecosystem. With strong tailwinds, we’re eager to explore what solutions the next evolution of healthtech will bring to market.
Digital Health: From 2.0 to 3.0
Historically, regulatory pressures played a huge part in ushering in the next evolution of healthcare technologies. The 2009 HITECH Act laid the groundwork for electronic health record adoption among health systems, with this change also came the adoption of technology that enhanced provider workflows as they balanced clinical and administrative tasks. We also saw the first iteration of new hybrid healthcare delivery models that put patient experience at the forefront (i.e., One Medical) but often came at a premium cost to patients.
The next wave of companies began to emerge as the Medicare Access and CHIP Reauthorization Act (MACRA) was signed into law in 2015. MACRA introduced structures that reward clinicians for value over volume, streamlines quality incentive programs and awards bonus payments for participation in eligible alternative payment models. Digital Health 2.0 introduced shared savings models where tech-enabled healthcare services companies were willing to tie revenue to demonstrated cost savings to customers. Furthermore, as more and more personal health data became digitized, we saw a shift to patient-driven tech solutions where patients were empowered to take a more active part in their own healthcare journeys- in many ways disintermediating the traditional provider (i.e. 98Point6).
With the 21st Century Cures Act in place, what should we expect to see in Digital Health 3.0? We anticipate that the pendulum will inevitably swing back towards the traditional institutional providers and payers, as they will become the major adopters of new tech platforms again. As these organizations are forced to compete with the digital-first winners from the first and second wave, they will look to deploy integrated care models that incorporate patient-driven approaches and tech-driven operational efficiencies to deliver full-spectrum, end-to-end care to its patients/members. In this wave, technologies will not be primarily driven by any one stakeholder, whether provider or patient, but be driven by the data collected across multiple sources. This also enables tech solutions to be able to reliably monetize on full value-based care reimbursement models.
Through Newark Venture Partners’ strategic relationships with RWJBarnabas and Horizon Blue Cross Blue Shield of NJ, we have already started to see these leading institutions take action towards the Digital Health 3.0 era. During the event, DeAnna L. Minus-Vincent, Senior VP, Chief Social Integration & Health Equity Strategist for RWJBarnabas, spoke at length about how the system integrates technology vendors like NowPow and ConsejoSano to support their Health Beyond the Hospital initiative. As hospital systems identify the roadmap that reduces friction for the patient and provider to get to true whole-person healthcare, they are actively searching for technology partners to help them optimize the data to drive value. Dr. Divya Palial, Chief Clinical Transformation Officer for Horizon Blue Cross Blue Shield discussed also shed light on their Health Care Value Strategy, from the payer’s perspective. For their organization, driving costs down means creating financial alignment with value-based partners and ensuring there’s awareness and structures of engagement at the provider level. At the patient level, priorities are to streamline care coordination across a patient’s journey with heavy emphasis on medical/pharmacy, behavioral and physical health and social determinants. Dr. Paliwal made it clear that to deliver on healthcare value enablement, the tech stack relies heavily on data, data exchange and data analytics at every level. We also introduced three NVP portfolio companies answering some of the most pressing challenges in the space today: Clearstep, mira and Ride Health.
For more details or to listen to the full Breaking Down the Walls of Healthcare recorded session, email Jennifer@Newark.VC.