Health & Tech in 2021
We know how much health tech interest peaked in the past year due to the pandemic.
Consumers and providers had an unprecedented disposition to push for quicker drug approval, vaccine discoveries, accepting new ways of interacting with health professionals, prioritising mental health and well-being.
For that reason, I want to look ahead and foretell what health tech companies will be solving in the future and which technology will help them to get there.
Although the tech industry takes the lead in company valuation, the healthcare industry is getting more investor interest than before.
In 2019, McKinsey stated that US healthcare would shift $250 billion towards virtual or virtual enabled care. Analysing this data now, we find out that 1) around 13% to 17% of patients visiting occurs through Telehealth 2) although virtual health adoption is still an ongoing process, there's a likeliness to evolve into a hybrid virtual and in-person care delivery 3) investment in virtual care and digital health has skyrocketed 4) healthcare and business models are mutating and increasing to a multitude of services.
For context, in the first half of the year, Rock Health digital health report states that the total VC investment in the digital health space has been a whopping $14.7 billion. Consider that it is more than all the investment done in 2020 ($14.6 billion) and nearly double in 2019 ($7.7 billion) - that means more funding, more deals, acquisitions and exits. As a result, these investments accelerate the healthcare sector's ability to innovate and improve. And although those gains come mainly from the benefit of the fusion with the tech industries, since they drive investors and push the boundaries of what's next, the biggest winner, in the end, will always be the consumer.
"There is $4 trillion in annual healthcare spend in the US alone - 17% of GDP - and the system still relies on messy, unstructured data for everything from drug development to patient care." - Packy Mccormick, in the model of everything.
We know there's vast interest in the digital health sector, but who's trying to fix it? And what problems do they face?
Usually, health professionals, with their insights and experience in the field, identify problems, bottlenecks and inefficient processes. Consequently, they're the ones able to create value propositions to tackle the issues they need to overcome.
According to the Accenture Digital Health Technology Vision Report, in the opinion of healthcare executives, the pace of digital transformation is accelerating, and innovation for their organisation is a high priority. In the same way, healthcare organisations need to update skillsets within the organisation.
From these thoughts, five trends emerge.
The need for robust technology architecture is indispensable to the organisation's success, meaning removing the technical debt they've accumulated with legacy solutions and building a technical wealth that can adapt to their needs and of their teams.
Growing investments in digital twin technologies (e.g. IoT, data streaming, 5G), therefore modelling the physical world in a digital format that gathers, informs, and processes data from multiple physical devices. Creating, for example, scenarios that could improve medical research, education and care delivery.
Allow technology to be used by those who are part of the solution or are aware of the problem. Empower teams with tools (i.e., NLP, low-code) that don't require the team to have an engineering background but allow them to create and apply solutions for issues they know.
Adapt professionals to new ways of working so businesses can have of a dispersed workforce. Although not all teams can work remotely in healthcare, a solution that allows a hybrid setup or the use of an employer's personal computer, can enable rapid rollouts and produce collaborations in multiple environments. Therefore, a virtual-first approach can provide new opportunities and create a symbiosis between technologies and the workforce.
Develop cohesive solutions for data sharing between different systems. Hence, as applications and software solutions evolve, interoperability and future systems will accommodate changes and improve the data flow.
Now that we acknowledge the massive investment in this sector and the problems they'll tackle, let's analyse which companies are getting funded and what problems they're solving.
Full disclosure: I've decided to focus on consumer apps. The reasoning is that, although there are many sectors to explore, I wanted to see how health services would connect with users through the device they use more often, their phones.
Creating a simple query in Crunchbase, I've identified the top 10 seed-funded companies of the year.
From the get-go, there's a standout in geography since half of these companies are from the United States, the other three from Europe and two from Asia. Most of them aim at maintaining or improving health care, enhancing wellness and child care, among other subcategories. Examining with more detail, we observe:
- a platform for families to deal with the loss of loved ones,
- a way to detect clinical depression and anxiety through machine learning and voice biomarkers,
- a fitness mobile application app that provides a workout plan,
- a benefits API for businesses,
- a mobile application platform for frontline and deskless employees onboarding and training,
- a solution for individuals to achieve optimal metabolic health through a blood sugar sensor,
- an app that focuses on the mental health of children and their families, an app for therapy with coaching and specialist support,
- a platform for helping people navigate end-of-life,
- Digital wellbeing assistant platform to help people be more present in their lives using technology, and a meditation, fitness, and mindfulness platform.
Deep diving into the tech that powers their solution, we see that most positions require technologists collaborating with small teams to iterate rapidly, plan, and build to deliver features. Concerning the tech stacks, positions, and roles, I’ve created the following breakdown.
At the seed level, companies need to build, plan, and iterate rapidly to validate their assumptions and quickly find product-market fit. As a result, hiring a reliable tech team and picking a solid tech stack is vital for their success.
That’s why, based on these companies engineering teams and open positions, I created the following breakdown:
Data Engineer (+ ML Engineer)
Trying to merge the role of a Data engineer with a Machine Learning Engineer is a gross faux pas. Yet, the motivation is to get a holistic view of a role that involves analysing, transforming, and understanding data.
That said, this role entails good coding skills around Python and SQL, experience with AWS Ecosystem, DynamoDB and data visualisations tools. An understanding of designing, implementing and maintaining ETL systems, data pipelines with ETL tools such as Hadoop, Spark, Beam and data warehousing technologies such as BigQuery, Redshift, and Snowflake. This way, combining all that knowledge to develop Business Intelligence for dashboards, logging and monitoring.
Web Engineer (Frontend + Backend)
Following the same logic as the previous breakdown, I've aggregated three positions (full-stack, frontend, backend) to simplify this role's overall cluster of technologies and processes.
There's a shared desire to hire senior positions (5+ years), but, above all, the critical point is to focus on the industry-standard languages, tools and frameworks.
Thus for the client-facing, the usual suspect React, show ups, with Storybook for UI components and pages, and GraphQL for data query. Next.js and Vercel stand out as a powerful combo for many projects, and for the backend, the norm is to pick battle-tested solutions like Node.js, Python, Postgres, integrated with AWS and Docker.
Mobile Engineers (Native + Hybrid)
The mobile engineer role is paramount since companies will primarily engage with their customers through apps. Therefore, companies want developers with solid expertise in native code, Kotlin or Swift, and a deep understanding of app stores processes.
On another note, developers with know-how in (or keen to learn) React Native are also in high demand. Companies, more than ever, are focussing on a hybrid-first approach and, when necessary for advanced features, will hook their hybrid code with native code.
The health industry is evolving, and technology is a big part of it. May the driving force behind it be bound by visionary investors or inside operators, the health industry will continue to be challenged and enhanced.
And, for health tech companies, it's the time to seize the moment and venture forward into a space that's eager to evolve.