March 2020 marked the outbreak of a global pandemic, and with it, an irreversible shift in the perception and adoption of healthtech. The unprecedented complications of Covid-19 not only disrupted the world but laid bare the inefficiencies and vulnerabilities of countries to a crisis, forcing governments to revise the structures of key bodies, with healthcare systems at the top of the list.
The push it needed
Even before Covid-19 became a reality, the drive for countries to make better use of digital technology had already started to take centre stage, with many already experimenting with digital alternatives for primary care delivery, including in-person consultations, chronic disease management and diagnosis. In 2019 the NHS had set about on what was then an ambitious target: to allow patients the choice to conduct the 307 million annual GP consultations via video within five years.
Given a strong push by the pandemic, emerging technologies – from telehealth to monitoring solutions – went from budding to necessary. By the end of 2020 the NHS target had been met, with over 99% of GPs now offering a video-consultation service.
Beyond Covid-19, the health tech boom is here to stay, and will continue to create compelling investment propositions for venture capital and other investors. In this scenario, entrepreneurs must find solutions to the long-sought-after goal in the healthcare sector: the simultaneous reduction of healthcare costs and improvement of patient outcomes, Particularly for the NHS, for whom costs of healthcare delivery were rising faster than the level of funding for services even prior to Covid-19.
This is the space where SPEX has been investing in. We are especially excited about technologies that increase operational efficiency, such as workflow automation and care-coordination tools that can directly improve productivity for healthcare stakeholders and result in potential massive cost reductions.
We testified the general, tangible impact of AI and technology on workflow automation with our portfolio company Firza. Through their development of AI-based technology, which automates workflows, the burden of administration for clinicians could be easily reduced and clinical time could by effectively freed up.
The use of AI in patient-facing care is finally becoming mainstream and AI-assisted care will dominate healthcare in the coming years. Another of our portfolio companies, Skin Analytics has developed DERM – Deep Ensemble for the Recognition of Malignancy – an AI/ML tool that allows easy identification of malignant and pre-malignant skin cancers by analysing photographs of the suspect lesion. DERM slashed secondary care referrals by over 30% and improved patient satisfaction. We feel that this is just one-of-many potential applications of AI in the future of healthcare.
Whilst healthtech entrepreneurs may feel pressure to ‘re-invent the wheel’, we urge them to focus on outcomes – can you demonstrably show that your product has genuinely improved patient outcomes and reduced costs to the healthcare system? Do you have the right expertise on your team to deliver what you promised?
Whilst these three key questions will not cover everything you need for a successful venture, it is certainly a good start.
Written by Claudio D’Angelo, founder and managing director at Spex Capital and serial HealthTech investor.