Venture capital investors have their eyes on long-term and palliative care as well as behavioral health, and told the Health Datapalooza audience last week it's not all about the tech.
The panel came at the tail end of a week that saw two multi-billion dollar deals in the home health and long-term care arena. Real estate company Welltower and nonprofit health system ProMedica Health entered into a joint venture to acquire HCR ManorCare, a large provider of post-acute care and long-term care, and nursing home chain Arden Courts to create a $7 billion system.
Humana, along with private equity firms TPG Capital and Welsh, Carson, Anderson & Stowe, earlier last week announced an acquisition of hospice operator Curo for $1.4 billion.
Not to be left out, Amazon is reportedly on a cross-country recon tour to see if it can develop technologies for the aging population, CNBC reported.
VCs hit a new funding record in the digital health space this year, and panelists said they are looking for business opportunities that improve the patient experience.
Homecare is the gatekeeper to keeping expenses down, one reason Humana bought into the space, Annie Lamont, managing partner at Oak HC/FT, said. In owning and operating home health, the insurer has the opportunity to bring down plan costs by keeping patients out of more pricey care settings. Lamont mentioned companies like Quartet Health that are jumping into the behavioral health market.
Companies can't bet on technology as a business survival strategy, panelists cautioned.
"Technology is nice but it's the cherry, not the ice cream," Lisa Suennen, senior managing director for healthcare investing at GE Ventures, said during the panel, adding it can be frustrating when a company focuses more on the tech rather than the outcomes. "[Technology] has to deliver value to patients and the system," she said.
Every large organization believes datasets can be a savior to their business model, Bryan Roberts, partner at Venrock, said during an earlier discussion with Devoted Health founder and former U.S. CTO Todd Park.
Datasets need to work in tandem with each other to realize benefits for clinicians and practitioners to achieve insights to their patients.
To that end, Donald Rucker, National Coordinator for Health IT, said that his office, in conjunction with payers and HL7, was in the early stages of sorting standards for population health data.
Rucker said that once those get up and running and providers can view that data, it could be the final brick to piece together a modern Big Data approach in healthcare and help patient empowerment. Rucker is hoping legislation such as the 21st Century Cures Act will inject consumer principles in the market.
Consumers will have more care choices going forward. Startups are also making plays in the home health, primary care, retail and long-term care spaces.
When Amazon announced it would create a healthcare company with J.P. Morgan and Berkshire Hathaway, the news moved markets.
But the incumbent players could use a kick in the pants. Lamont said providers, after years spent focusing on EHR implementation, now have the opportunity to change care delivery processes.
"People need fear in their lives," Lamont said, adding it stimulates competition.