When Bob Dylan wrote “The times they are a-changin’,” he likely didn’t anticipate the scale of “a-changin’” occurring in our country today. Disruptions to the economy, federal agencies, grant programs and elsewhere have created a cooling effect across business sectors, and that includes healthcare technology – a major area of focus for us on the Matter Health team.
Just as we saw during the pandemic, though, the healthcare innovation economy has shown its resiliency again. Those of us who obsess over the news 24/7 see the headlines about layoffs and consternation about international trade. But we also connect with optimistic industry leaders and see the news items that suggest we’re approaching yet another technology boom, this time powered by AI.
These are the recent storylines we’re following and the insights we’re hearing across healthcare industry events that strike a hopeful note about health-tech’s future.
The health-tech IPO: Back from being a complete unknown
When the digital physical therapy company Hinge Health (NYSE: HNGE) issued its IPO last month, it marked a significant breakthrough for an industry that had fallen quiet on Wall Street. The pandemic-induced gold rush, which produced a record number of health-tech IPOs and SPAC mergers in 2021, ended in a series of overevaluations and busts that combined with economic headwinds in recent years to dampen investor enthusiasm in the space.
Hinge Health showed the pathway from digital health startup to public company and did it in style when its stock jumped up 17% on its first day of trading. They’re also not alone. Omada Health, a digital chronic care company, filed for its own IPO in May and Hinge’s largest competitor, Sword Health, signaled it may also pursue an IPO this year.
The health-tech investment spike of 2021 largely rested on the backs of companies built for a mid-pandemic world (e.g. telehealth solutions, remote patient engagement, etc.). Hinge Health and the up-and-comers behind it could mark a wave of sustainable success that brings more investment to the sector.
The slow one now will later be fast…with AI
The AI-driven technological evolution is clearly upon us, but some of the relationship dynamics between humans and AI are coming into clearer focus.
The “Godfather of AI” himself, Dr. Geoffrey Hinton, once predicted AI would easily outperform and replace humans in the field of radiology, for instance. But at leading institutions, including the Mayo Clinic, radiologists have leveraged AI in a role that complements human radiologists – a “second set of eyes” – not a replacement.
At this year’s New England Bio Community Conference, Dr. David Rosenthal presented his view of AI both in the clinic and in the marketplace. As a primary care physician at Yale New Haven Health, professor at Yale School of Medicine and an investor in health-tech, Dr. Rosenthal’s purview covers many angles.
Like the Mayo Clinic radiologists, he sees the best path forward for AI – both as a clinician and an investor – in the tasks that complement humans. He leverages an AI scribe to help him take notes during patient visits, as an example. He also highlighted the tasks for AI-powered tools that draw the most investor interest, and they include administrative functions, coding, decision support, and synthesizing and summarizing data.
The burgeoning copilot role for AI may signal less volatility in the job market than some have predicted, and in turn, a stable marketplace for health-tech innovation.
The players who cannot adapt fast enough to the AI revolution may “sink like a stone,” but overall, we continue to see signs of a strong health-tech innovation economy backed by a wave of exciting technologies. That technological wave paired with renewed support from Wall Street bodes well for what’s to come in health-tech.