Digital Health's AI Frontier: The Search for a Dominant Player Continues
Experts at HLTH 2023 discuss AI's role in healthcare, with no clear leader emerging. Big tech and startups compete for the future of digital health.
The digital health landscape is undergoing a transformative shift, with artificial intelligence (AI) at the forefront of discussions and innovations. The HLTH 2023 Conference in Las Vegas became a melting pot of ideas, where over 10,000 attendees, ranging from budding startups to Fortune 500 giants, showcased their latest digital health solutions. The previous year's focus was on moving away from isolated solutions, but this year, the spotlight was firmly on AI.
The burning question on investors' minds was identifying the ultimate use case for AI in healthcare. The competition is fierce with tech behemoths like Alphabet, Microsoft, and Amazon carving out their individual AI strategies and marking their presence at the conference. Startups, although innovative, find themselves in a David-versus-Goliath scenario, trying to demonstrate their potential to bring about a significant change in healthcare against these well-funded giants.
Prateesh Maheshwari, a managing director at Maverick Ventures, a San Francisco-based venture capital firm, voiced a concern that resonates with many in the industry. He questioned whether the digital health sector, despite its size, is making the desired impact. One of the longstanding ideas in healthcare is value-based care, which suggests that healthcare systems and professionals should be financially motivated to maintain patient health and face penalties if their interventions prove ineffective. This concept contrasts with the prevalent fee-for-service model, where patients are billed for every individual service they receive. Speciality care, such as cancer treatment or dialysis, is particularly problematic in this regard, as it demands specialist doctors over general practitioners.
Maheshwari highlighted the significant portion of healthcare expenditure attributed to speciality care and expressed uncertainty about finding a definitive solution. However, experts like Vineeta Agarwala, a general partner at Andreessen Horowitz, are optimistic about AI's potential to address these value-based care challenges and reduce the administrative burdens that technology has imposed on healthcare professionals.
Recent years have seen a surge in capital funnelled into digital health, with AI receiving a significant chunk of these investments. Rock Health, a firm that monitors health tech investments in the US, reported that since 2020, a staggering $21.4 billion has been invested in digital health with an AI focus. The year 2021 alone witnessed an investment of $10.1 billion. While the total investment in AI for digital health in the first half of 2023 was $2.2 billion, as a percentage of overall digital health investments, AI's share has remained relatively stable, hovering around 30%.
The HLTH 2023 Conference's emphasis on AI in healthcare underscores the industry's recognition of AI's transformative potential. However, the real challenge lies not in the technology itself but in its integration into existing healthcare systems. While big tech companies and startups are racing to develop the most advanced AI solutions, the true winner will be the one who understands the nuanced needs of patients, healthcare professionals, and the industry at large. It's not just about creating the most sophisticated AI model; it's about crafting solutions that are accessible, user-friendly, and, most importantly, beneficial to patient outcomes. The future of AI in healthcare will be shaped not just by technological advancements but by a deep understanding of human-centric care.