Investors buoyed by recent successful health initial public offerings see healthcare as a prime market for innovation, according to an article atVenture Beat.
IPOs for Fitbit, Teladoc,Evolent Health and Press Ganey Holdings all opened at higher than the original offer price, and investors see plenty of room to move healthcare forward with technology.
“The thing about healthcare is that it’s a $3 billion industry, and the computer systems used in the industry are probably the worst in terms of its 21st century-ness of it, maybe second only to education,” Stephen Kraus of Bessemer Venture Partners said, according to Venture Beat. He added that healthcare is “literally stuck in the 1980s.”
With healthcare reform and the emergence of value-based and population health reimbursement models, organizations need to harness analytics and engagement technologies to care for entire populations of people in a more cost-effective way.
As those challenges are settled, investors are in the mood for more healthcare innovation, according to the article.
“Healthcare reform and regulatory changes–one of which was the HITECH Act—have poured billions into the digital health space, so it’s no surprise that disruption-minded entrepreneurs [are] jumping in,” Kraus said.
As investments in healthcare technology mature, and as investors look for ways to liquidate or gain late-stage capital, IPOs are growing at record levels, according to a mid-year market review by Healthcare Growth Partners.
Rock Health reported that digital health funding surpassed $2 billion in the first half of 2015, keeping pace with 2014, which was a record-breaking year for the industry.
And health IT offers substantial potential for U.S. companies to increase exports, according to a new report from the U.S. Department of Commerce.
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