Bright future ahead for digital startups
Accenture says market will double in size as innovators and investors flock
The burgeoning digital healthcare market is where the money's at. In fact, in just three year's time, industry analysts project the sector will nearly double, thanks to evolving consumer expectations and a serious influx of start-up cash.
That's according to a new report, put out by Accenture, which forecast an expansion of the U.S. market, from its current $3.5 billion value to a more robust $6.5 billion come end of 2017.
[See also: Digital health sees record cash flow.]
Often considered among the last industries to innovate, healthcare has seen start-ups and entrepreneurs flocking to the space in recent years, bringing their best ideas forward and getting the cash flow they need to move forward. This growth, Accenture analysts project, will be sustained even past 2017.
"A digital disruption is playing out in healthcare that will change social interactions, alter consumer expectations and, ultimately, improve health outcomes," said Dipak Patel, managing director of Accenture's patient access initiatives, in a press statement announcing the report.
"This momentum," he added, "will be sustained if digital healthcare start-ups apply capabilities that create a seamless patient experience and result in both medical cost savings and improved outcomes."
[See also: Consumers wild about wearables.]
That disruption, Accenture points out, has been facilitated by some serious venture capital so far. Just this past year, for instance, digital health startups received $2.8 billion in capital funding – a 31 percent growth rate since 2008. VC for these startups is expected to increase to $4.3 billion next year.
According to Rock Health's 2014 digital health funding midyear report, capital funding for digital health startups grew a whopping 176 percent in the first half of 2014 compared to first half of 2013. This while the software segment grew only 123 percent, and the biotech segment a seemingly low 28 percent.
Accenture's data highlights that, since 2008, the digital health segment that has received the lion's share, or $2.9 billion, of capital is the infrastructure capabilities segment, which includes interoperability initiatives and data analytics.
Engagement solutions – such as wearable technology like Google Glass and FitBit – was pegged at $2.6 billion in startup funding since 2008.
[See also: Google Glass links to EHR.]
"Healthcare leaders will need to embrace digital capabilities, not only to stay relevant to consumers, but to influence behavioral change, improve access to care channels and reduce per patient costs," said Patel.