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#cbihealth
The technology market
intelligence platform.
CB Insights software lets you predict, discuss, and
communicate emerging technology trends using data
in ways that are beyond human cognition.
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A FEW OF OUR HAPPY CUSTOMERS
The most publicly reference-able customers of anyone in the industry
1200
490
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62 16
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ABOUT THE LEAD ANALYST
Nikhil Krishnan
Research Analyst, CB Insights
nkrishnan@cbinsights.com
#cbihealth www.cbinsights.com 5
TABLE OF CONTENTS
7 What Is Healthcare Consumerization?
8 Macro Trends
22 Digital Therapeutics Private Market Activity
32 Changing Primary Care
61 Pharmaceutical Distribution
70 Looking Ahead: Artificial Intelligence
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What are we analyzing in
Healthcare Consumerization?
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Healthcare Consumerization:
MACRO TRENDS
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HEALTHCARE REGULATORY CHANGES
FUTURE UNCLEAR FOR CMS' MANDATORY
VALUE-BASED INITIATIVES
March 25, 2017
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HEALTHCARE COSTS
CONTINUE TO
INCREASE
Healthcare is outpacing
inflation along with some
other services industries
and more highly
regulated industries.
Compared to the
baseline 55% inflation
during this time period,
healthcare was close to
double at 105%.
Healthcare is towards
the bottom when it
comes to digitization.
Even though a lot of
money flows into Health
IT, the only areas that
have seen digitization are
typically in the parts
related to billing and
business processes.
Chronic disease is a
major driver of health
expenditure, especially
amongst the Medicare
population. Most of the
high cost drivers (heart
disease, diabetes) can be
managed with lifestyle
changes, facilitated by
new technology and
tools.
The penetration of
mobile devices in society
has opened up
possibilities in
healthcare. Services can
become location
agnostic, more lower-
income households have
access to mobile
devices, and diagnostics
can be enabled at home.
#cbihealth www.cbinsights.com 22
Global equity funding since 2013:
$3.7 BILLION
across
546 DEALS
#cbihealth www.cbinsights.com 23
DIGITAL
THERAPEUTICS
ANNUAL FUNDING
50
48 Funding activity in 2017
has already reached a
39 new peak in quarterly
38 38 38
35 deal activity, with 50
34
32 32 deals in the first quarter
29 30
27 of the year. Funding has
25
remained relatively
21
consistent between
17
$200M and $400M since
13
Q215, but the last two
quarters have seen a
funding slowdown.
$21
$289
$191
$121
$127
$338
$152
$159
$306
$227
$244
$383
$399
$263
$198
$194
$60
Digital therapeutics
hasnt seen many exits
since the space is still
maturing and digital
health as a whole tends
to take longer due to
regulatory burden, trials,
etc. There have been
some sizeable ones,
including TelaDoc and
iRhythm technologies.
Interesting to note that
3 2 4 4 3
2017 has already seen 3
exits so far.
2013 2014 2015 2016 2017*
*2017 through Q117
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LACKING HEALTHCARE
ACCESS
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UNBUNDLING PRIMARY
Urgent Care Concierge Medicine
CARES FUNCTIONS
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CONSUMER
DIAGNOSTICS
Companies are
leveraging mobile to
enable diagnostic tests
to be done by consumers
or bringing the tests
directly to the consumer.
Helps avoid problems of
single-instance
measurement, allows
measurements to be
taken at different times
of day, and can catch
anomalies earlier.
#cbihealth www.cbinsights.com 40
CONSUMER
DIAGNOSTICS
#cbihealth www.cbinsights.com 44
URGENT CARE
INCREASING IN
POPULARITY
#cbihealth www.cbinsights.com 48
CONCIERGE MEDICINE COMPANIES
CONCIERGE MEDICINE
COMPANIES
Concierge
medicine/direct primary
care build their own
practices and charge a
retainer fee (billed
monthly or annually) for
access to a suite of
services. This creates a
more predictable stream
of revenue and creates a
lock-in for the network.
#cbihealth www.cbinsights.com 51
TELEMEDICINE
BENEFITS
Create a referenceable
conversation
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AND CAN INCREASE
THE REACH OF CARE
#cbihealth www.cbinsights.com 57
MEDICATION
ADHERENCE IS A HUGE
PROBLEM
Failure to adhere to
medication schedules is
a huge contributor to
failure in treatment,
medical waste, and
undermining the value of
clinical trials.
#cbihealth www.cbinsights.com 58
MEDICATION ADHERENCE COMPANIES DIFFERENT
APPROACHES
#cbihealth www.cbinsights.com 61
DRUG DISTRIBUTION TODAY IS COMPLEX
#cbihealth www.cbinsights.com 65
VIRTUALIZING THE
PHARMACY
Similar to other
industries like
commerce, technology is
virtualizing the retail
pharmacy. New tools
allow for businesses to
be built entirely online
and both reduce
overhead spend and
simplify complex
logistics (which in this
case also simplifies
medication regiments).
By getting more
consumers to use
platforms, companies
are aiming to leverage
negotiating power and
bring the costs down of
drug + provide
transparency in the
process.
Brian Tilzer
Chief Digital Officer, CVS
#cbihealth www.cbinsights.com 70
HEALTHCARE HAS SEEN THE MOST AI DEALS
Artificial Intelligence
startups are attacking
different parts of AI, from
preventive care, to virtual
assistants. Many of
these startups are
patient facing, and can
reshape patients
interactions with the
healthcare system.
#cbihealth www.cbinsights.com 75
HAS PATENTS IN WEARABLES AND
DIAGNOSTICS
QUESTIONS? nkrishnan@cbinsights.com
#cbihealth www.cbinsights.com 78
Where is all this data from?
The CB Insights platform has the details on all the
deals included in this report
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CBINSIGHTS.COM
@ cbinsights
+1(212)292-3148
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