Atlanta’s healthy future
Happy December 1st! I hope you had a wonderful Thanksgiving last week and dodged any overly contentious political discussions at your table (“pass the turkey, hold the heated exchange about mask mandates”).
Today’s topic is healthtech, a subject that has become increasingly important with the snowballing size of the healthcare market, the acceleration of trends like digitization and shifting consumer preferences, and the continuing reverberations of COVID-19.
The 3.8T Pound Gorilla
US healthcare is a gargantuan market. Spending on healthcare in this country grew to $3.8T in 2019, representing almost 18% of GDP (up from around 7% in 1970). It is expected to balloon to $6.2T by 2028.
Despite all this money, the US sees middling outcomes. US life expectancy remains below that of comparable countries like the UK, France, and Australia. (US life expectancy was 77.3 years in 2020 vs. a comparable country average of 82.1 years.)
Part of this is attributable to US healthcare quality and access lagging peer countries (see chart).
Our country’s healthcare system faces major challenges. The CDC estimates that over 31M Americans under the age of 65 are uninsured and that 8% of Americans 18 years or older fail to obtain needed healthcare due to cost.
US deaths jumped 17.7% to 3.36M in 2020, driven largely by COVID-19 (which became the nation’s third-leading cause of death, behind heart disease and cancer) as well as by increases in heart disease, drug overdoses, Alzheimer disease, and diabetes. Further, 6 in 10 US adults have a chronic disease; 4 in 10 have two or more.
The healthcare industry is also undergoing seismic shifts. Consumer preferences are changing. Patients are demanding that care be available how and when it is most convenient for them — forcing a move to more digitally-driven, on-demand, and frictionless patient-clinician interactions. Providers are employing new digital tools and services to boost patient satisfaction, improve medication adherence, and help patients and their physicians track and monitor health. This has led to the growing adoption of virtual care, at-home prescription delivery, remote monitoring, digital diagnostics, and self-service healthcare apps. The spike in telehealth during the pandemic is part of this trend and has proved enduring. Telehealth usage remains 38x higher than before the pandemic, with McKinsey estimating that as much as $250B of current US healthcare spending could be virtualized.
Healthcare organizations have been transitioning to modern IT systems powered by the cloud and analytics tools. They are increasingly looking to leverage interoperable data streams and AI-enabled platforms to improve care, reduce costs, and interact with and treat patients. They have also been collaborating in unprecedented ways across providers, payers, academia, and government. Particularly notable has been the rise in partnerships between healthcare organizations and tech giants like Apple, Amazon, Google, and Microsoft as well as with rising digital health startups like Carbon Health, Olive, and Maven.
Investing in Healthcare’s Future
Founders and investors have clearly recognized the opportunity represented by healthcare. There are now over 90 healthcare unicorns globally. According to CB Insights, the number of worldwide healthcare startup venture deals reached a record high of more than 1,900 in Q3 2021. By the end of last quarter, 2021 total healthcare startup venture funding of $97.8B had already surpassed 2020 funding by 21%. Investors poured this money into startups spanning medical devices, biopharma, healthcare IT, mental health and wellness, and telehealth. Digital health startups have been a particular bright spot, raising 30% more funding than last year.
Atlanta’s Health Infrastructure
Atlanta is well-positioned to capitalize on the surge in healthtech. The city serves as a base for national and international institutions like the Centers for Disease Control and Prevention (CDC), American Cancer Society, Arthritis Foundation, CARE, The Carter Center, and the Task Force for Global Health. Major health systems like Piedmont Healthcare, Wellstar Health System, Emory Healthcare, and Northside Hospital span the metro area. And Atlanta’s academic institutions operate various programs and centers dedicated to healthcare research and education, including Emory’s Woodruff Health Sciences Center, Morehouse School of Medicine, Georgia State’s School of Public Health, and Georgia Tech’s Center for Health Analytics & Informatics and Integrated Cancer Research Center. When it comes to the private sector, over 225 healthcare IT (HCIT) companies operate in Georgia, employing around 30,000 people.
Atlanta’s Healthtech Startups are Looking Well
The Atlanta tech ecosystem has seen ample activity involving healthtech companies this year. In July, for example, Louisville-based Waystar acquired Midtown Atlanta-based healthcare billing and payments software company Patientco. The next month, Alpharetta’s Streamline Health paid $20M for Suwanee-based Avelead, a provider of revenue cycle and process management solutions for hospitals.
Healthtech startups in Atlanta span digitally-enabled healthcare providers, diagnostic software developers, health data management systems, patient engagement tools, drug R&D platforms, and payment solutions. Given the sheer breadth of companies located in the metro area, we won’t explore all of them here. I’ll instead highlight players that seem emblematic of different categories.
Digitally-enabled Healthcare Providers
Certain Atlanta startups are using technology to more effectively deliver healthcare where and when it is most needed. A prime example is SnapMedTech, the parent company of three staffing-focused sub-brands: SnapNurse, InstaStaff; and Paymint. SnapNurse, the company’s on-demand nurse staffing platform, has seen massive growth fueled by high demand for nurses during the pandemic and the ability of the company’s Paymint financial system to send nurses rapid daily payments for their shifts. The number of nurses on SnapNurse rose from 20K in 2020 to more than 160K earlier this year, driving annual revenues skyward from $3M to $88M over 12 months.
Local startups Ascend Medical, MedZed, and Physician 360 all offer telemedicine services. Physician 360 supplements this with at-home diagnostic tests, while Ascend and MedZed offer their members home visits from mobile care providers. Evva Health, which won CodeLaunch ATL’s inaugural seed accelerator pitch competition in August, provides a platform of resources and guidance for caregivers looking after their loved ones. And CareValidate gives companies tools to manage COVID-19 testing, tracing, and vaccination management for their employees.
Diagnostic and Treatment Software
Companies in this category provide software solutions to help providers identify and treat illnesses. Startups nView and TQIntelligence both focus on mental health. NView, backed by local venture firm Panoramic Ventures, offers a suite of online behavioral assessments to help diagnose, treat, and monitor mental health disorders, while TQIntelligence — a Seed Stage Showcase company at the Venture Atlanta Conference in October — provides speech emotion recognition technology to assist therapists in screening for mental health issues among at-risk youth.
InpharmD offers medical providers the ability to ask clinical questions, receive curated responses, and research treatment options via an app providing access to over 21M summarized reputable medical studies. The company graduated from Y Combinator earlier this year, raised a $1M Seed round in August, and already counts over 10,000 physician, nurse, and pharmacist users.
Finally, OncoLens, also backed by Panoramic Ventures, provides a unified platform to help cancer programs coordinate treatment planning across multidisciplinary teams. The OncoLens platform is already being used by several cancer centers and healthcare networks, including Emory Healthcare and Wellstar Health System.
Data and Compliance Systems
Various Atlanta-area startups are working to enable better use and management of healthcare data. In June, Alpharetta-based Ciox Health, which facilitates the secure exchange of identified medical records, merged with San Francisco-based Datavant, a startup that links de-identified personal health datasets to each other, to create the country’s largest health data ecosystem. The combined company’s network now reaches over 2,000 hospitals, 15,000 clinics, and 120 health plans. Midtown Atlanta’s Rimidi pairs patient-generated health data from connected devices or patient-reported outcomes with clinical health data from electronic health records (EHRs) to deliver tailored insights and actions within healthcare providers’ existing EHR workflow. And analytics startup Trella Health uses Medicare claims data to help providers understand post-acute care activity for patients age 65+ in their service areas so these providers can benchmark themselves against competitors, identify referral partners, and market themselves more effectively.
A couple of local startups are also using technology to ensure healthcare providers’ adherence to policies and curtail mistakes. Early-stage Motivo, for example, enables new therapists to receive virtual supervision from experienced clinical supervisors as part of their licensure process. Clean Hands Safe Hands developed technology that monitors and tracks hand washing and sanitizing compliance by healthcare providers and provides audio reminders to those who forget to clean their hands — all with the aim of reducing hospital-acquired infections.
Patient Engagement Tools
Companies like LifeQ and Sharecare provide more consumer-focused data offerings. LifeQ offers a “health operating system” for personal wearable devices to monitor health functions and provide users with personal health insights. The company raised a $47M Series A in May and has partnered with device manufacturers like Samsung, Xiaomi, and Montblanc. Buckhead-based Sharecare offers consumers an app with information, programs, and resources to help them improve their health. The company, which was co-founded by WebMD founder Jeff Arnold and celebrity physician Dr. Mehmet Oz in 2010, went public via SPAC in July.
Loyal, Radix Health, and Nova Health Labs offer HCIT solutions targeted at patient experience. Both Loyal and Radix provide tools for patients to navigate appointment scheduling, billing, and communications with their healthcare providers. Nova’s software enables the automated transcription, analysis, and triage of patient voicemails, texts, and emails for oncology care teams to improve communication with patients while reducing human error and care team burnout.
Research & Development Platforms
Florence Healthcare is perhaps the most notable Atlanta startup providing technology aimed at healthcare R&D. The company’s platform connects pharmaceutical companies with study sites to enable remote, decentralized management of clinical trials for drug development. Florence, which graduated from Georgia Tech’s ATDC incubator, is now used by over 10,000 research teams in 44 countries. It raised an $80M Series C in the spring, participated in by Atlanta-based (and prior investor) Fulcrum Equity Partners.
Health Benefits and Payments Solutions
A final category of startups includes companies that manage healthcare benefits and payments. Rialtic, which was founded last year by veteran health tech executive Doug Williams and quickly raised over $16M, is building a platform that enables accurate claims payments between payers and healthcare providers. Alpharetta-based Decisely, which raised $3.5M in March, provides software that helps small businesses manage HR offerings and offer more affordable health insurance to employees via solutions like association-based healthcare plans (plans where similar groups of businesses come together to acquire healthcare).
The companies highlighted above are only a sample of those keeping Atlanta at the forefront of healthcare technology. They and their peers are playing a vital role in helping healthcare organizations identify new treatments, improve patient experience, and deliver better, more efficient care to a greater number of people. More power to them. The world is a healthier place because of their efforts.
