Big technology companies continue to move into the healthcare space, entering into strategic partnerships with health systems and investing in telehealth and digital health companies.
Those companies have reported gains in many cases, but the overall market is a bit more volatile. A panel session at the Becker's Health IT + Revenue Cycle Virtual Event on Oct. 8 outlined how big tech and Wall Street will affect healthcare going forward. The panel included Ashish Atreja, MD, chief innovation officer in the department of medicine at the Icahn School of Medicine at Mount Sinai in New York City and Pamela Gallagher, interim CFO of Baptist Health Hardin in Elizabethtown, Ky.
Below is an excerpt from the panel. Click here to view this panel, as well as other event panels, on demand.
Question: This has been a year of ups and downs for many reasons, looking at digital health, more downs than other industries than that. How do you anticipate Wall Street will affect healthcare going forward?
Pamela Gallagher: It's going to open up the markets even more, and I'm going to say a lot of non-traditional healthcare investors will invest in a new technologies and you might see some of those investments shift out of traditional healthcare, even if you know the for-profits that are in Wall Street. I think you're going to see some of that investment move out of the traditional hospital space into maybe some more the Amazon, Apple, Google, things like that. I think you're going to see some shifts in investments.
Dr. Ashish Atreja: I definitely agree. I think you're going to see some non-health [investors] with the IPOs. Suddenly many non-health focused venture capital firms and private equity firms have gotten interested in healthcare. That trend will continue. At the same time, I feel there's a little bubble for what is happening right now with COVID; people are so health conscious that's affecting the sight of the investors as well. As COVID gets better, when it gets better, I do feel the growth is going to be there. There is definitely some real growth and it has accelerated virtual care. I also feel digital therapeutics and digital monitoring is going to be the biggest wave now.
We have already started seeing the trend with Teladoc acquiring Livongo because just synchronous care doesn't take away physician time and effort. It's the same physician time and effort, it's same vision. Digital therapeutics and digital monitoring or digital care plans can actually create exponential value because then they're automated at any time. You don't require the same time and space, right? That's where exponential value is. Some of the bubbles that are on virtual care may decrease, but asynchronous care I think has continued to rise.
Q: How do you think the trends there will impact how health system investments and what are you doing to prepare for that? Or how can hospitals and health systems prepare for that?
PG: I think hospitals would invest their money into some other technologies and things. I think the health systems themselves will invest in outside industries and I think they'll see some positive results in that. Hopefully they'll take a more business view of it and not just be so healthcare-centric. I think they're going to realize the values and even those investments I think will increase outside their little world. I think they're going to be broadened significantly.
AA: That's a very interesting take, and many health systems and hospitals already have venture arms. Some don't have formal venture arms but they have informally invested many times. Definitely, there are physicians groups which invest a lot, and I'm pretty sure CFO groups invest a lot too. So, I think there's definitely investment, and I think one way to ride the wave is actually get very strategic investors, which become your partners in transforming your health system, right? That way you already have equity share in the company. You may have a board ownership in the company as well, and you can strategically align it and that can empower your health system and create value in addition to the value from the increase in the valuation perspective, from a pure fiscal perspective.
I think we will see is new key models, new business models of collaborations. For example, an organization may have one psychiatrist, but can't offer comprehensive behavioral health. Just having that understanding itself will allow hospitals and health systems to partner with the behavioral health companies. Many hospitals still take the approach of providing every type of care, but no one is gathering metrics on which they're providing efficiently and which they're not. Suddenly that efficiency effectiveness is going to become much more transparent, much more universal to see for everyone. As we say, proof is in the pudding and people will actually have a harsher look within their ecosystems to say, 'Hey, we were never designed to do that and maybe we should invest in a company rather than just saying that we are doing it right.'
PG: I think Ashish you're absolutely correct. I think as we drive through the retail and more consumerism, and I think the focus on quality and what you do best will actually drive the market. So right on.