A.
Before COVID-19, a few companies, such as Livongo, made a splash in the digital health community by going public – Livongo in July 2019.
Fast-forward to March 2020, for the first time, physicians, patients and administrators were forced to utilize digital health tools, and companies like Teladoc and Amwell were rapidly adopted.
Telemedicine, remote patient monitoring and digital front door technologies that once were fringe, became mainstream.
Although the consumer perception and stigma around mental health was starting to change before COVID-19, the pandemic generated widespread acceptance and adoption of mental and behavioral healthcare services.
For example, in research studies I conducted as a clinical investigator at Stanford University, we showed that when given the option between in-person and virtual care for mental healthcare, study participants tended to choose telehealth.
Notably, since 2018, mental health has been the top clinical indication to receive investment, growing from $1.4 billion that year to $5.1 billion in 2021, according to Rock Health.
While the growth of telehealth platforms has been substantial, a more exciting area of investment in mental health is in digital therapeutics.
These solutions are essential going forward because it will not be feasible to train enough providers to meet the mental healthcare demand, whether in-person or online.
For many years, mental health has lagged between physical health both in access to treatment and reimbursement – this is despite the mandates of the Mental Health Parity and Addiction Equity Act of 2008.
Substance use disorders, in particular, have worsened during the pandemic, as more than 100,000 Americans died from drug overdoses in a 12-month period between 2020 and 2021.
By loosening the requirement that a clinician must conduct an in-person visit before prescribing an opioid use disorder medication , startups have made treatment more accessible.
While a record number of digital health companies went public through various methods in 2021 – 23 in just one year compared to a total of 26 from 2011 through 2020 – they fared poorly in the market.
The incredible excitement in digital health due to the trends I’ve discussed, such as on-demand care and digital adoption by consumers and physicians, created a mismatch between market valuation and actual financial performance.
Over the long term, however, digital health has just begun to scratch the surface of addressing the $4 trillion healthcare industry in the U.S.
While 2021 may have been a public coming-out year for digital health companies, these first-generation solutions were actually service companies with a bit of technology – which the market belatedly realized.
While in medical school, we might learn every protocol for how to dose a hypertensive medication, and yet we would not spend any time ensuring these patients have access to or can afford these medications.
Furthermore, in training we would move between premier research hospitals, like Stanford, to safety-net hospitals and witness the incredible inequality in resources available to both patients and providers.
Hospitals are faced with impossible decisions.
Not only is this population difficult to manage for the existing care system, it is even harder for startup entrants.
These two things together make longer term investments in someone’s health very difficult and often showing no ROI.
Despite these challenges, I am still excited about digital health investment for Medicaid populations for several reasons.
While historically digital adoption of these technologies was not widespread, today among patients with Medicaid and their providers, these digital health tools have become adopted.
The reason I stepped away from clinical practice is that I believe, through technology, we can deliver a higher quality of care regardless of the patient’s health status or economic situation.