Galen Growth Issues Special ViVE2023 US Health System Digital Health Report

[As health leaders gather in Nashville for ViVE2023 – for a meeting dedicated to saving lives – we have learned that a mass shooting has occurred in the city at Covenant School, Covenant Presbyterian Church.  There are multiple victims reported in this elementary school tragedy. At this time of terrible loss, our thoughts go out to the families and community impacted. We also think of parents throughout the nation who worry for their children’s safety and physical and mental health.]

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In the first Medika Life analysis of the always insightful Galen Growth data offering insight into the state of affairs of digital health – from partnerships to its practical application to the category’s financial health – we described the global environment as promising yet filled with “trepidation”:

Trepidation. That one word describes the uncertain economic climate that gripped corporate and investment decision-makers. If we are to believe the headlines, wallets have tightened – almost closed – and investment in life science and digital health, as a result, has declined. That go-to conclusion takes a simple approach to a complex investment strategy for the digital health sector that has shown great resilience year-after-after.

Now, the word to describe this new report is “Potential.” There is incredible potential for digital health to find its way within the US health system in multiple ways – from AI to ChatGPT to digital therapeutics – it’s potential remains great. Its path arduous.

The special report prepared for ViVE2023 shifts from its usual global 30,000 feet analysis to a special meeting theme – digital health and the US health system – particularly on the provider side.  The data released during the first full day of ViVE as an analysis of hospital activities around digital health –where the rubber meets the road for many of these ventures – practice application of innovation. Galen Growth of their FINN Partners has mined the insights that entrepreneurs, their investors, health system chief information, and innovation officers need to study closely! 

The data are essential for ventures, incubators and accelerators to mine, determining whether the digital health category and the massive US health provider system are working together to evaluate their activities’ effectiveness and advance the nation’s wellbeing.

Galen Growth is among the world’s trusted digital health private market data, intel and insights firms for industry and investors. They remain the only specialist digital health innovation partner, able to bring together private market venture data, intel and insights platform giving its clients more applicable information than any other platform

In the US, some 417 Health Systems account for nearly 3,500 hospitals. More than 1,600 independent hospitals are the backbone of healthcare delivery in the country and – in addressing in-patient care — a significant contributor to health outcomes.  But, many of these institutions – particularly those in remote and rural communities – are ailing. They need a bolus infusion of health innovation to access patient data, reimbursement and basic diagnosis and treatment priorities.  Digital health – from EMRs to remote access technologies is part of the critical-care, system-wide treatment.

“More than 50% of the 417 US health systems are struggling financially, impacted by the rapidly rising labor cost and shrinking HCP workforce. Meanwhile, demand from consumers and patients continues to increase,” says Julien de Salaberry, founder and CEO of Galen Growth. “Health systems and hospitals have to make increasingly difficult decisions about their healthcare delivery capabilities and seek technology solutions to increase productivity and build capacity while retaining high standards of care,” he adds.

Unless otherwise stated, all data are exclusively sourced from the Galen Growth proprietary

database HealthTech AlphaTM – the leading global digital health intelligence and analytics on-demand platform. HealthTech Alpha now tracks more than 300 million data points and has coverage exceeding 13,000 digital health ventures across the globe.

Here are the core takeaways from the Galen Growth/FINN Partners – ViVE2023 Report – but read the entire report to mine its full value:

Partnerships

In 2022, 31% of all global partnerships with Digital Health ventures founded in the United States were built within the U.S. Health Systems and hospitals– more partnerships than any other industry vertical engaged with Digital Health.

Clinical Evidence

Among the ventures that are partnering with the U.S. Health Systems ventures focused on Research and Clinical Trials take the top strategic area spot, with 69% of the ventures having Evidence Signal > 40, indicating significant Clinical Evidence. Ventures in the strategic areas of Diagnosis and Treatment captured 40 and 36% shared, respectively.

Health Systems

Galen Growth has recorded more than 1,400 partnerships globally between Digital Health ventures and Health systems in the United States since 2012, with only 10 Health Systems recording a Digital Health portfolio larger than 15 ventures. More than 560 hospitals and Health Systems are active, but only the top 65 most active Health Systems are accountable for 50% of all recorded partnerships.

Oncology

Oncology takes the top position across the therapeutic areas, with more than 30% of U.S. Health System is partnering with ventures in this area—cardiovascular Diseases are in second place, with 20%. Looking across the top 25 most active Health Systems, the top 13 therapeutic areas were represented in more than half of the Digital Health portfolios.

Portfolio Size

Across the U.S., there is a 2.1x difference in the Digital Health portfolio size between the most active Health Systems and the most extensive Health Systems. While the largest Health Systems focus on infrastructure improvement and treatment partnerships, the most active systems are partnering more in diagnosis and have a higher share of digital tools for research (incl. clinical trials). Both groups have significant activity in Digital Health tools for Prevention and Wellness.

How is the digital health sector doing overall despite the energy and buzz?  According to today’s Galen Growth report, its most significant potential awaits to be fully realized. Julien de Salaberry summarizes:

“Since 2012, US health systems have disclosed more than 1,400 partnerships globally with digital health ventures, with only 10 Health Systems recording a digital health portfolio larger than 15 ventures. More than 560 hospitals and Health Systems are active, but only the top 65 most active Health Systems are accountable for 50% of all recorded partnerships.”

Once again, Galen Growth has given us a wealth of data to mine and contemplate. The potential for digital health – as a tool to accelerate access to life-saving information and care remains incredibly promising.