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Digital Health – From Skepticism to Promise – Defining an Emerging Field

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The field called “digital health” exploded in 2020. Since last year at this time, we have seen hyper growth and historic investments where the average deal size was 15x greater than 2019. However, the year did not start this way. At the 38th Annual JP Morgan Conference, CNBC’s Christina Farr announced, “Confusion and hype over ‘digital health’ overshadows J.P. Morgan health conference.” In the article, she explained, “Some attendees felt the lack of a clear definition for “digital health” might be hurting the sector.” 

Many came to recognize that the health care industry advanced 10-20 years in a single year, as a result of COVID.  At a June 2019 Senate HELP Committee meeting, Senator Lumar Alexander stated, “Because of COVID 19, our healthcare sector and government have been forced to cram 10 years worth of Telehealth experience into just 3 months.”

While we have all come to recognize the effects of COVID on innovation in the health care industry, when it comes to an emerging field like digital health, where two distinct industries are merging, it is important to remain vigilant in clearly defining terms and expectations. I spent the past 12 months analyzing the evolving definition of the term Digital Health, summarized in the note:  “Comparing Colleague Definitions of Digital Health” and used this exercise to develop the 5-part framework, below, which I use to clarify any discussions of a digital health solution:

  1. Applications (i.e. Telehealth , wearables); 
  2. Customers targeted/ affected (i.e. patients, care providers, research labs); 
  3. Technologies (i.e. software vs hardware); 
  4. Modality ( i.e wired vs wireless); 
  5. Outcomes (i.e. access to health care, cost-savings, profitability, scalability)

Over time, the health care and technology sectors will continue to learn to speak a common language to reduce a sense of “confusion” and “hype” when it comes to the Digital Health industry. By using a common framework to interpret digital health solutions, those of us from different backgrounds, from technology to health care, from investor to patient, can work together to guide this emerging industry to reach its true potential.


Note: from a VC standpoint, the following business aspects are relevant to the analysis of Digital Health companies

  1. How is it addressing a health care problem?
  2. Stage (Startup,  Seed, Series A, B)
  3. Patent activity
  4. Novelty of the technology
  5. Strength of the team
  6. The business model (who will ultimately pay for this product – patients, payers, employers
  7. Does it provide a Consumer and Enterprise solution?
  8. What would suggest long-term adoption, viability
  9. What might prevent it from taking hold?


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