“The doctor will see you now”:
How AI is disrupting healthtech
Mike Hoey is the President of Source Meridian
Consider the MRI. A mainstay of oncologists and the workhorse for detecting hydrogen-laden (water-heavy) cancer cells. Now, consider how the original prototypical concept for the MRI – nuclear magnetic imaging (NMR) was discovered in 1945, but it wasn’t until 1984 that the first commercially available machine was FDA approved.
In considering the 40 years it took to invent the MRI, we need to think about the one year it took to develop the COVID vaccine. Taking that a step further, the pandemic taught us that those who get in on the ground floor on great new healthtech ideas will be aptly rewarded for their vote of confidence in the sector.
After all, healthtech combines two of the things humans love the most: innovating and furthering our health.
After the Gold Rush
The past two years have been a bit of a gold rush. Because of our time spent at home, we are now aware of cryptocurrencies and NFTs. But even at the height of hype, investors showed telltale signs of buyer remorse for digital assets. Why does a picture of a monkey cost multiple thousands of dollars, for example? At least tulips smell nice.
In the present moment, we’re witnessing a recalibration of sorts. The fanfare for crypto has died off and the Fed is indicating a “soft landing” from the inflationary era of quantitative easing and zero-cost money.
But one must ask: in this era of tremulous uncertainty, what safe harbors lie ahead? For starters, the healthtech sector is estimated to grow at over 17.4% between 2021 and 2027.
That’s a double-digit number to really sink your teeth into. One that’s grounded in an industry that literally prolongs life, not one that requires an obfuscating or complex explanation about why you must be an extremely sophisticated individual in order to see the emperor’s clothes.
It holds up the US economy
Healthcare spending accounted for 19.7% of the United States’ GDP in 2020. In that first year of Covid alone, spending on healthcare increased by 9.7%, or $4.1 trillion. That’s a ton of expenditure, and a big chunk of that – to be perfectly frank – was a waste.
Because closet to an estimated trillion dollars a year ($935 billion is Forbes’ high-end estimate) is spent on undue healthcare expenses, consumers and investors are going to want to see a future in which the quantitative and qualitative boosting powers of tech stands to tighten the screws in places where currently we are seeing huge wastages, namely administrative fees.
Why, for example, should the systems that we depend upon to regulate and tabulate our health records face such a difficult time communicating with one another?
Insurers, doctors, and pharmacies will soon (due to recently passed legislation) be on the same digital framework to easily speed requests to each other so that patients can receive the best care, fast, and doctors can have a complete and holistic overview of the people they are treating.
Life as we know it
By the end of last year over $2 billion across more than 40 deals (with 28% of these deals constituting +$100 mega-round ventures) was raised to extend the human healthspan.
For example, Apollo Health Ventures successfully raised a $180 million venture fund to build a portfolio of data-driven biotechnology and health tech ventures aimed at this purpose, while Switzerland’s Maximon announced the launch of its $100 million Longevity Co-Investment Fund in October.
The hot topic amongst investors in this controversial sector is that of prolonging human life, indefinitely. Purpose-built funds aimed at this lofty goal seek to imbue humans with lifespans that would see our species become centuries-old in order to gain a deeper grasp of time, and this change the world for the better.
Whether or not you believe this is possible, the tech going into the effort will surely help us gain a better understanding of the current biological functions we understand to facilitate aging, such as inflammation, diet, and brain chemistry.
Be the change you want to see
The past ten months have seen a final interesting trend that must be noted as the founders and Chief Medical officers of new companies often appear to have come from either a health or science-based background – not tech.
So what’s it mean when doctors and scientists found companies meant to solve problems, rather than tech people trying to hire medical professionals?
Talent moves in the right direction and problems get solved. Wanna put your money where your mouth is when it comes to investing? In a word: Medtech.
Watch this space.