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WSJ: Beware of Health IT Bubble: Not Enough ‘Actual Business Plans’
Veteran VC Says Beware of Health IT Bubble: Not Enough ‘Actual Business Plans’

Timothy Hay from the Wall Street Journal  wrote a great article after he interviewed me.
With software executives filling out the roster at this year’s JP Morgan Healthcare Conference, and with the reported IPO plans of medical cost-transparency software provider Castlight Health at a $2 billion valuation, information-technology for the health-care industry is beginning to look nearly bulletproof as a sector. But with feverish activity and high valuations comes the danger of a bubble, said veteran investor Anne DeGheest, who was an investor and entrepreneur through the tech boom of the 1990s, and who founded Sand Hill Road firm HealthTech Capital several years ago.

 

Ms. DeGheest has invested extensively in medical devices and in health-related information technology, and she said she learned in the ‘90s to read the signs of an economic bubble. She sees some of those signs today, telling Venture Capital Dispatch of a potential “Series B crunch” as a number of health entrepreneurs without solid business plans try to raise money from investors.

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Anne DeGheest | 04 February 2014

Will Digital Health succeed? Any lessons from the Dot Com eHealth failures?

HealthTech and Digital Health investment doubled in 2013 to over $2 Billion. However, over 73% went to seed and series A investments, with still a flat amount of deals funded by venture capitalists at the series B and C stages. Are we going to see a growing funding crunch for all these young companies or will we see increasing VC investments?


Will the Digital Health movement succeed? Any lessons from the Dot Com eHealth failures?

With new digital health accelerators opening doors weekly across the country, are we running the risk of another Dot Com like “Bubble”, when too many companies got started with poorly defined business models and an over exuberance of early seed capital that led to a terrible funding crash that killed most of them, including several very good ones?

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Anne DeGheest | 02 February 2014

HealthTech Conference 2013 identifies massive opportunities for healthtech entrepreneurs
HealthTech Conference 2013 identifies massive opportunities for healthtech entrepreneurs

By Anne DeGheest

Please check my article on VentureBeat:

HealthTech Conference 2013 was bustling with energy with “an all-star lineup” of the leading minds in the healthcare industry. The sold-out event demystified the tectonic shifts in our healthcare system and identified specific actions that startup companies must take to be successful.

Big takeaway: The healthcare industry is being disrupted in a massive way, and 16% of GDP is being turned over, creating a tsunami of opportunities!

Overcoming challenges to build successful healthtech companies

The conference emphasized the need for collaboration between healthcare systems, payors, suppliers, entrepreneurs, and investors around emerging opportunities for healthcare innovations. Some of the key takeaways included:

  • The existing Gold Rush towards quickly deploying new digital health solutions is repeating the mistakes we made during the dotcom years — focusing too much on building a demo to show off the digital technologies instead of building a proven value-added solution that a lot of people are willing to pay for.
  • Entrepreneurs often develop a technology without spending enough time defining the pain points for all the stakeholders involved. The winners will create total solutions that benefits physicians, patients, and the ultimate payors.
  • Existing care delivery is not sustainable for both the hospitals and physicians. New models will emerge that deliver care wherever patients are: at home, at work, or at the mall.
  • New data created must be liquid and easy to integrate with other health information systems from mobile systems to hospital EMRs. We do not need more data silos. And don’t forget to ensure HIPAA data compliance for security and privacy requirements.
  • Data only has value if it becomes actionable with proven impact metrics on the subpopulation that needs to change. For example, digital technologies that enable aging at home need to address seniors with different technology skill sets than they would use to address younger consumers.

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Anne DeGheest | 23 November 2013



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