Wyatt Matas released their latest white paper on the private-pay home care industry and home care coordination technology platforms. In the past 24 months, more than $200 million has been deployed into marketplace-based private home care technologies. This does not include investments in acquisitions of home care franchise systems or other in-home age tech platforms. Capital follows capital.
StartupHealth released their Q3 2016 report on digital health funding. Though the number of investments is down from the peak in 2013, the amount of money invested continues to rise. YTD investments of $6.5B already exceeds last year. If the current year’s pace continues, total investments for the year will be between $8-9B, a new record. The most active spaces in terms of total raised YTD are patient/consumer experience, wellness and personalized health/quantified self.
Another noteworthy datapoint from StartupHealth’s report is the number of unique investors. Of the 665 investors, 523 have only one digital health investment, which continues to increase each year. It seems like more and more investors want to dip their toes in the digital health pool. As we’ve said many times, money follows money.
The National Business Group on Health surveyed 133 employers with 5,000+ employees, and found that 70% of them offered their employees access to telemedicine benefits, but only 3% of the employees used in within the first half year. Last week we reported on the disconnect between patients’ and physicians’ expectations for telemedicine, noting that 32% of patients surveyed by MedScape did NOT prefer a face-to-face physician visit. Something is preventing willing patients from utilizing telehealth options that save the time and expense of a traditional office visit. Concern about patient confidentiality? Desire to speak with their own physician? Misunderstanding of the capabilities?
According to data from the National Bureau of Economic Research, from 1996-2012, healthcare costs rose 50%, while pet care costs rose 60%, even rising during the Great Recession. While retail costs are included in that figure (and anyone who has shopped for anything in the last two decades knows that pet retail is a growing field), employment data indicates that veterinary medicine is also growing. Employment in veterinary offices has almost doubled from 1996-2013, while employment in physician offices has seen about half that growth rate.
This recession-proof growth in veterinary medicine, along with the consumer-driven model, has spurred interest from private equity groups. For example, VCA, Inc. invested in Companion Animal Practices, North America at a multiple of 10.7x EBIDTA earlier this year. Like the PEG interest in dentistry and dermatology we reported on earlier this month, veterinarians are able to practice medicine with comparatively little government intervention.