Last week, I traveled to San Francisco to attend the 37th annual J.P. Morgan Healthcare Conference. The conference is the largest healthcare investment event in the industry, bringing together thousands of investors, innovators and healthcare professionals who are changing the world.
The conference is always a high priority for us as we look to start our year surrounded by entrepreneurs who are pushing boundaries and challenging the technology and care delivery norms. I always come back with insights into the direction the industry is headed and where priorities are.
Here are a couple of the key trends I saw at the 2019 J.P. Morgan Healthcare Conference:
VCs Are Eager to Put Money to Work
With the cost of hotel rooms rising to well over a thousand dollars a night and one hotel charging $21 for a cup of coffee, attendees spent big bucks at this year’s conference. Investors experienced this in the valuations that entrepreneurs and early-stage healthcare startups are seeing and expecting. Many VCs are recommending entrepreneurs put more money to work as investment funds continue to offer inflated valuations driven by a variety of financial instruments, including access to capital in the debt markets.
Venture capitalists are eager to get in earlier in a company’s life cycle while there are no clear leaders in many of the emerging spaces (more on this below). At the same time, entrepreneurs are willing to take more money than often initially requested while requesting higher valuations as they are unsure what the capital market will look like in another 18 months.
Plenty of Innovation but No Clear Winners in Healthcare IT Space
There was no shortage of exciting new companies releasing advancements at the conference. Direct-to-consumer engagement solutions to improve the healthcare experience and overall cost of care were the goals of many of the digital health companies I spoke with this year.
A lot of money is being spent to connect healthcare providers to consumers through mobile devices and other technology with the goal of reducing unnecessary utilization and improving the efficiency of physicians and care extenders. These earlier stage companies present ways to solve multiple problems in healthcare, including for the growing self-insured marketplace and risk-bearing health plans (Medicare Advantage), and also for specific disease conditions which without care intervention are a major cost driver for health plans and government payers.
However, despite the high level of excitement around the consumer engagement and behavior modification through technology enablement space, none of the companies I met with has yet established themselves as a true leader. It is still unclear which ones will make a significant impact on the industry.
Top Priorities in 2019
No company is presenting a solution to all healthcare problems. But, the problems they are aiming to solve give a good sign of the direction the healthcare technology industry is headed. Here are what I believe to be some of the priorities for investors and healthcare professionals based on what I saw at the conference:
- Behavioral Health: There remains an unmet need in behavioral health that became even more clear this year. Several companies have made strides in connecting patients to mental health professionals through mobile devices as the stigma surrounding mental health continues to fade. Creating a platform that helps patients identify their clinical need and then connects them with an appropriate provider, either virtually or in-person, in a relatively quick manner is what technology companies are striving for.
- Long-term Care: Technology and services looking to improve care for post-acute episodes, compliance with medication management, senior living and chronic diseases all drew notice from investors this year.
- Precision Medicine: Eli Lilly’s $8 billion acquisition of precision-cancer-drug developer Loxo Oncology shows the importance and value of precision medicine that targets specific mutations in DNA. Precision medicine innovations for diabetes and other diseases were also prevalent this year.
- Alternative Care Settings: Because traditional healthcare delivery systems include costly inpatient treatment options for a variety of acute procedures and illnesses, an increasing number of companies are focused on bringing care to patients in their homes. This includes patients who would go to the emergency room or post-surgical patients who need to be monitored, as well as patients being treated for acute conditions that would require a short inpatient stay.
The J.P. Morgan Healthcare Conference has always been a great week for reconnecting with our network and meeting entrepreneurs who are working to deliver the next big thing. While the connections made are a crucial part of the value this conference offers, gaining insight into the industry and identifying trends like the ones mentioned here are always my favorite takeaways.