Our health-tech predictions for 2021
Plus a new section: Cool jobs!
Over at OMERS Ventures, we’ve been thinking a lot about what 2021 will bring. First and foremost, we hope it’s a better year for all of you than the dreaded 2020. Fortunately, there’s lots of reasons for optimism, particularly with the rollout of the vaccine.
But what’s next for the health care industry specifically?
This week, my colleague Michael Yang and I sat down to hash out our predictions. Some relate to health-tech, and others are more in the realm of policy/payer trends. We also gut-checked our ideas with a range of experts in the space, and asked for their thoughts. I’ll warn you ahead of time that this newsletter will not be entirely rosy. So if you’re inclined, feel free to skip the bad news at the bottom!
The Good News
There will be a new class of investor in health-tech: Let’s get real. Digital health VC is still not very diverse and we need to do better. Fortunately, surveys like this one from Dr. Ivor Horn/ Rock Health are acknowledging and raising awareness of the problem. So we expect to see more venture firms embracing diversity in 2021, as well as a new crop of solo capitalists raising their own funds.
More approvals for ‘care at home’: We expect to continue to see care delivered in the home, as seniors remain cautious about nursing homes into 2021. We may also see more regulatory approvals for technologies that can monitor people’s health, and we’re seeing a flood of startups emerge in this space to capitalize on that opportunity.
More medical school admissions: NPR is calling it the “Fauci effect.” Citing admissions data from the Association of Medical Colleges, or AMCC, a recent article reports that the number of students applying to medical school has jumped up 18 percent.
Public health departments will be awash with cash: In the aftermath of major health crises, we tend to see public health departments get an influx of funds. Look back to the bioterrorism scare in the early 2000s. Unfortunately, this funding seems to come and go. But we suspect that there will be major investment for years to come, as we won’t want to be blindsided by the next pandemic.
Finally, a big rise in behavioral health funding: We are seeing sustained investor interest in all things behavioral health, which is sorely needed. We expect that demand will be at an all time high for these services in 2021, given that we’ve all lived through a pandemic. The challenge, however, will continue to be the finite supply of providers, the burdensome licensure requirements and the lack of reimbursement. (More on that here in our recent interview with Business Insider).
Telemedicine will be way up from 2019, but not at 2020 levels: Hospitals will invest a ton of marketing dollars into bringing patients back to their physical premises in 2021, and they’ll reschedule those delayed surgeries. But telemedicine won’t go back down to 2019 levels, because a lot of providers and patients found this year they liked it more than they expected to.
More IPOs/M&A: 2020 was a big year for health-tech exits. We suspect that won’t slow down in 2021. There’s a number of companies that could go out, including Crossover Health, Oscar Health and MDLive, and that’s good for digital health. We could also see more consolidation of start-ups that sell into the employer/health plan market, which could be positive or negative for the industry depending on the specifics of the deal.
Some Bad Tidings
We’ll see poor health outcomes due to delayed care: In 2020, elective procedures at hospitals across the country were delayed or cancelled. We’re hearing that many patients avoided preventative care, including primary care visits and dental check-ups. Others didn’t take their medicine if it meant seeing a doctor or pharmacist in person. In 2021, we’ll likely see the effects of that.
Health care workers will experience record burnout - and some will retire early: Thanks to Covid-19, doctors, nurses and other health care workers nearing the end of their careers are starting to retire in big numbers. We expect that a lot more health care workers will hang up their scrubs in 2021. After more than a year battling a novel virus without sufficient support, we suspect that the medical profession at large will report record levels of burnout in 2021 (note: this was a problem pre-Covid).
Some health-tech start-ups will fold: It’s been a hard year for fee-for-service hospitals, and many laid off staff. That could have a ripple effect. Many health system buyers are telling us that they’re really only investing in technology that’s mission-critical right now: Either it saves them money in the short-term or it helps with the Covid-19 effort/recovery. It’ll be a hard sell for several years to come for start-ups that don’t fit that criteria.
“Digital pill mills” will face a reckoning: We’re seeing a few concerning forces at play. There’s been an explosion of direct-to-consumer businesses selling medicines online with minimal oversight. And we’re noticing a bump in advertising both online and on television, pushing for products to be sold on a recurring subscription basis. While some of these services are high-quality, we fear that the bad actors are not preserving the integrity of the tele-health consult.
Health misinformation will remain rampant: As countries around the world look to rollout the coronavirus vaccine, we don’t see an end in sight to health misinformation and disinformation. The social media companies have made strides this year, but haven’t gone far enough to combat this type of content. This will continue to be a big challenge for public health authorities around the world in 2021.
Some of us feel invincible - and there will be consequences: Very few of us partied in 2020 (at least, I hope not). Tens of thousands of couples across the U.S. cancelled their weddings and honeymoons, and anniversary parties were delayed. In 2021, we’ll see more and more people getting vaccinated. And with that, we’ll see a wave of travel and partying. That’s great, but we suspect there could be a lot more accidents and injuries associated with that. And there could also be some minor surges of the virus amongst the groups that are reluctant to get vaccinated.
Bad actors will jump the vaccine queue: We know that the wealthy and powerful got special treatment throughout the pandemic, including early access to tests and experimental therapies. And we don’t see that changing as the vaccine rolls out. As this excellent Stat News article explains, the rich could fudge the definition of an essential worker or a high risk condition in order to get to the top of the line. We also expect that there will be a black market for the vaccine in many countries, especially once vaccines are available that don’t require cold storage.
A few bonus predictions from our network…
A focus on health outcomes: “When it comes to behavioral health, I expect that the market will move to outcomes. Payers will increasingly be asking vendors to show that they’ve made a difference to patients’ health by improving, say, depression scores. That will be the new expectation in 2021. (Shantanu Nundy, chief medical officer at Accolade)
A long road to recovery for hospitals: “Firstly, the losses will carry over and the hole is deep. Secondly, our behavior patterns have changed after nine months of Covid-19 and we’ve found alternatives to hospitals wherever we can. For example, ERs aren’t what they were —telehealth and urgent care centers are filling the void — and likely won’t be again. My gut says hospitals are going to see soft revenue for years, with too much bed capacity and under-utilized capabilities. I think that means they’re going to be forced to invest in solutions that deliver on cost savings and productivity gains.” (Nick Richitt, Managing Director, Head of Healthcare Investment Banking, Americas at Deutsche Bank)
We’ll be feeling the impact of the pandemic for some time to come: “The long-term impact of the pandemic will be profound for so many areas in individuals' health, the delivery of healthcare, and healthcare utilization. We are already seeing huge increases in alcohol and other substance use - especially among parents - and so therapy, addiction, and behavioral health services will be critical.” (Dr. Gina Merchant, behavioral scientist and digital health consultant)
Health data interoperability will finally advance: “The final 21st Century Cures Act rules have sent a strong signal to the market that universal APIs make data exchange and app deployment turnkey, and that information blocking is illegal. Government agencies and big tech companies will visibly leverage this new data liquidity for large scale innovation across artificial intelligence, genomic medicine, digitally-delivered healthcare, and discovery. In parallel, there will be an, at times heated, national conversation about protections for patient privacy.” (Dr. Ken Mandl, director computational health informatics program at Boston Children’s Hospital)
Health systems going virtual: “At the end of 2021, we'll regard at least one of them as a major player in the ‘next generation health system’ space where the Optum's and Teladoc's have dominated the conversation to date. Patients will prefer models that cover the full spectrum of care delivery settings (i.e. virtual, in-clinic, in-home, etc), and companies that have been focused only on virtual care delivery will be pushed to seek out partnerships with in-person care delivery entities. Mayo Clinic is a good candidate to lead in this space - its recent Platform investment in K Health and partnership with Medically Home set the stage for some potentially meaningful moves in 2021. (Kevin O’Leary, investor and author of one of our favorite health-tech newsletters)
And now for our newest section…
COOL JOBS ALERT!
We asked our network for openings and scoured the web. Here’s seven to get you started on your search, whether you’re looking to work at a start-up, academic medical center or larger company:
Love wearable tech? Oura, maker of the health-tracking ring, is hiring a Head of Business Development. Brian Gilan, the company’s senior product manager, tells us that the ideal candidate would have deep health care knowledge and experience building a BD team. Location is San Francisco.
Passionate about health data analytics? WithMe Health is hiring a Health Economics & Outcomes Research Lead who can work remotely, but the Bay Area is preferred. CEO Joe Murad says the ideal candidate is passionate about improving health outcomes and lowering costs through medication guidance. (WithMe Health is an OMERS Ventures portfolio company)
Want to improve women’s health? Tia, which specializes in providing high-quality care to women, is looking for a backend engineer. We so appreciate the mission and this looks like a cool opportunity to help buildout an engineering culture.
Is MSK your thing? PeerWell is looking for a lead quality engineer to help build out tools to help people recover/ prepare for surgery, or avoid it altogether. CEO Manish Shah tells us there’s bonus points for candidates that have a keen interest in 3D modeling and AI/ML to create novel health care applications. (PeerWell is an OMERS Ventures portfolio company).
Looking to pickup new skills? Duke is on the hunt for fellows for its data science program. Those who get admitted will spend two years learning how to apply machine learning and quantitative sciences to rich sources of healthcare and administrative data. Duke’s very own Dr. Daniel Buckland tells us the ideal candidate gets digital/AI, but is looking to increase their medical know how.
Care about kids’ health? Brightline Health is looking for a marketing manager (among other roles) to support its mission of providing care to children and teens with a behavioral health condition.
Ready for leadership? KelaHealth is in the market for a head of commercial for its surgical precision technology. The preferred candidate has some knowledge of the surgical field and a background at a venture-backed startup, plus they can navigate an EMR.
That’s it, folks. We expect you to hold us accountable. So feel free to call us out in a year from now! Got any predictions of your own? We’d love to hear them!
If you have a job listing to share, reach out to @chrissyfarr on Twitter.