What does the current moment in the healthcare information technology vendor sector look like, from the point of view of the venture capitalists who are busy deciding where to invest dollars in that sector?
John Gardner, of the San Francisco-based NGP Capital, has some thoughts. NGP Capital’s description of its scope on its website includes this statement: “We invest in high growth companies that have demonstrated product-market fit, sustain strong customer engagement and have a proven business model. Our typical initial ticket size ranges from $8-12M with extensive capacity for follow-on investments. Once invested, we work actively with our entrepreneurs and companies to help them succeed. We are here for our companies to accelerate their growth and help them navigate new territory through our global network within the technology industry.”
Gardner, a partner in NGP Capital, who “has led and managed investments in companies across the information technology spectrum, including enterprise software, carrier software, systems and component companies,” recently made some points, following his participation in the annual HIMSS Conference, held at the beginning of March in Las Vegas. Through his press representatives, Gardner shared the following points with Healthcare Informatics:
> Patient-centric engagement models are becoming table stakes, but a seamless patient journey is still a dream. Customer engagement is an absolute requirement for organizations across the board: hospitals, payers, and pharma have all accepted this at least to some extent. Despite this, the patient journey is still convoluted and far from the seamless customer experience of other industries.
> Data harmonization, specifically, is something that is top-of-mind for specialized data players, as this is necessary to apply any sort of insightful ML/AI tools to population health data. The urgency of interoperability is seen particularly by moonshot players (e.g., precision medicine companies) with innovations that currently outpace many EHR vendors, the former of which requires evolutionary leaps of data standardization, integration, and sharing to reach full potential.
> As digital health continues to evolve from a new phenomenon into a more mature space, players have readjusted their expectations for what can be feasibly achieved. While many of these companies may not be as striking as players that were hyped in the earlier days of digital health, many of the latter have fizzled because they were simply too ahead of the market.
> In a world where data breaches have become commonplace, it is not surprising that healthcare companies have ramped up cybersecurity efforts. While security is not a debate, certain advanced methods, blockchain specifically, have created a division in beliefs. Only time will tell how and to what extent healthcare leverages block chain.
> Digital therapeutics is an area with the potential to disrupt healthcare as we know it today. This has been accelerated by trends toward FDA approval of these offerings – which companies like Pear Therapeutics have achieved – as well as getting approval from CMS and other payers to be reimbursable offerings.
> Telehealth has become status quo, with an increased acceptance of alternative care modes by providers and payers. This is encouraging for nuanced forms of telehealth – namely AI-powered chatbots, such as MDLive’s new product – while they are still emerging technologies, their predecessors have helped pave a path for accelerated adoption.
Following the release of that statement, Gardner spoke with Healthcare Informatics Editor-in-Chief Mark Hagland about his perspectives on the current healthcare IT market. Below are some excerpts from that interview.
Tell me a bit about NGP Capital, and its involvement in the healthcare information technology sector.
Our firm is a global venture capital firm active in the United States, Europe, and China, with over a billion dollars under management. And we are thematic investors, meaning that we pick two to four segments that we really try to understand—industries being disrupted by technology, with the disruption creating opportunities for small, private companies that could disrupt. And we want to invest in five to ten companies over a period of three to five years. And we want to develop proprietary knowledge in those industries.
I have colleagues focused on smart enterprise or industrial IoT; others focused on smart cities or smart logistics. Our core team is focused on digital health in the U.S., Europe, and China. We’re not doing pharma, biotech, or heavily regulated devices. Instead, we’re focused on two things: one is the increasing ability, with phones and sensors, and the ability to connect those to the cloud—from a digital therapeutics and patient engagement perspective, that there are tremendous amounts of opportunities within those sectors to better manage chronic care issues; better health and wellness; prevention, etc.
And there’s another category where the more recent digital transformation of healthcare creates opportunities to improve provider workflows, again through the lens in particular of where provider workflows meet the patient before, during, and after care, and around creating that patient loop and capability to improve care over time. That’s the part of digital health that we’re focused on. Three colleagues here, three in Europe, and three in China, are focused on digital health.
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