I had the honor and privilege of kicking off the Tech Download Series as part of the Cancer Informatics for Cancer Centers (Ci4CC) community at the Spring Symposium. Founded in 2012, Ci4CC is the nation’s leading National Cancer Institutes (NCI) and Community Cancer Center informatics society, a professional organization that serves as a hub for leading NCI-Designated cancer centers, community cancer centers, and key industry and government leadership. The community is aimed at driving progress and innovation in exploring applied innovations in cancer informatics. It has significantly influenced oncology research and patient care, reshaping our understanding of cancer.

The Ci4CC Tech Download Series is designed to explore and showcase cutting edge technologies in cancer informatics, cancer care and digital health that advance patient care and research.

The Series brings together start-ups, investors, academia, and all who have interest in accelerating and improving patient outcomes. It will facilitate the exchange of knowledge, promoting collaboration, and propelling progress to enhance cancer care, optimize patient outcomes, and further translational research.

In the rapidly evolving landscape of healthcare, technology investment trends provide a valuable lens through which to understand the future of medical innovation. The following summary highlights a recent discussion around significant trends, challenges, and innovations in healthcare technology, with a particular focus on oncology. By understanding these trends, stakeholders can make more informed decisions about buy versus build strategies and anticipate the next wave of technological advancements.

Following are the highlights of the Tech Download Session from May 1, 2024.

Understanding Investment Trends in Healthcare Technology

Context for Investment Trends

For the past two decades, I have been deeply immersed in the healthcare technology sector. My journey includes several years at Epic Systems and 13 years leading product and strategy at a high-growth clinical trials technology company, navigating through successful exits and overseeing six acquisitions within a whirlwind 18-month period. I have been involved in the Cancer Informatics Community for the last 12 years and have seen its evolution. My current focus on Venture Capital investments involves identifying and vetting startups, pinpointing industry and market trends, and uncovering hidden opportunities that others might overlook. I also serve on the boards of several portfolio companies, guiding them in strategy and growth.

Our Venture capital firm, HealthX Ventures, is dedicated to investing in enterprise digital health companies, ranging from pre-seed to Series A stages who sell into providers, payers, employers, and the pharma/life sciences sectors. Observing healthcare technology investment trends from this vantage point provides us with early insights into emerging innovations, often years before they become widely recognized or adopted. This unique perspective allows us to anticipate and capitalize on the next wave of transformative healthcare technologies.

The Shift in Investment Dynamics

Over the past few years, the healthcare technology investment landscape has undergone significant changes. The boom of 2021 and early 2022 saw a surge of what was termed "dumb money" being invested indiscriminately. However, this was followed by a correction, bringing investment levels back to pre-pandemic norms. Despite this adjustment, the volume of deals has remained high, the quality of early-stage deals has increased due to lower valuations, but the size of individual investments has shrunk. This shift indicates a more cautious approach by investors who are now seeking startups with solid traction and comprehensive value propositions.

Implications for Startups

For startups, this environment presents both challenges and opportunities. With investors becoming more selective, only those companies that meet rigorous criteria are securing funding. This heightened scrutiny necessitates that startups demonstrate not just innovative solutions but also clear paths to market adoption and financial sustainability. The trend suggests that while funding is available, it is being directed toward ventures with well-rounded offerings and proven potential. Valuations have come down significantly, with much more rigor around linking valuation to real traction and proven milestones.

AI and Technology in Healthcare

Artificial intelligence (AI) has emerged as a dominant theme in healthcare technology. The proliferation of AI-related press coverage and the increasing interest from major biopharma companies underscore its growing importance. However, despite the buzz, many healthcare organizations have yet to fully define their AI strategies. A survey indicated that while only 12% of academic medical centers currently have an established AI strategy, up to 70% plan to develop one within the next year. This discrepancy highlights the gap between interest and implementation, suggesting significant growth potential in AI adoption.

In the ever-evolving landscape of healthcare technology, understanding where specific innovations stand within the hype cycle is crucial for stakeholders. The hype cycle illustrates the journey of new technologies from initial hype through a period of disillusionment, and finally to widespread adoption. This analysis provides insights into the expected timeframes for these innovations to reach a plateau, where they become fully integrated into everyday practice.

Currently, some notable innovations are emerging from the trough of disillusionment and moving closer to broader adoption. Key examples include cloud analytics for healthcare and life sciences (HCLS) and health data curation. These technologies are on the cusp of transitioning from skepticism to practical, widespread use.

Insights from the Cancer Center Panel

A panel discussion featuring leaders from various cancer centers provided valuable insights into the current state and future direction of healthcare technology investments. The panel included Brad Taylor, Chief Research Informatics Officer at the Medical College of Wisconsin, Dr. Peter Yu, Physician-In-Chief from Hartford HealthCare Cancer Institute, and Dr. Trevor Heritage, SVP Informatics & Data Officer at Florida Cancer Specialists & Research Institute.

After a highly engaging discussion, here are five key takeaways that emerged from this discussion:

1. Budgetary Constraints and Prioritization

While budgets for healthcare technology are on the rise, they remain constrained. This means that new technology investments must demonstrate a strong financial return on investment (ROI) or directly impact patient safety and virtual care. The focus on ROI is crucial, as it determines which projects receive funding.

2. Building on a Solid Foundation

Innovation must be grounded in a solid foundation. Many cancer centers are still dealing with IT project backlogs from the COVID-19 pandemic, compounded by budget and staffing constraints. Additionally, hospital mergers and acquisitions add layers of complexity, necessitating a robust foundational infrastructure before new technologies can be effectively integrated.

3. Innovations and Strategic Priorities

Key areas of innovation identified by the panel include:

Clinical Trial Recruitment: Enhancing patient identification and workflow support for clinical trials.
Cancer Registry Automation: Reducing the costs associated with required cancer registry reporting through automation.
Decision Support for Precision Oncology: Leveraging AI to support generalist oncologists with specialized decision-making.
Workflow Integration: Streamlining enterprise workflows to improve efficiency, from scribe notes to billing and coding.

4. Buy vs. Build Decision Making

Each cancer center has a unique approach to the buy versus build decision. Factors influencing this decision include the availability of viable solutions, the ability to keep pace with innovation, and the institution's specific needs. The choice often involves a balance between adopting cutting-edge innovations from startups and waiting for established players to integrate new technologies into existing workflows.

5. Academic vs. Community Cancer Centers

The needs of academic medical centers differ from those of community cancer centers. Academic centers typically have specialized expertise and resources, while community centers focus on supporting medical oncology generalists with diversified clinical workflows. Despite these differences, both types of centers face challenges in staying abreast of innovations and clinical trial options, indicating a need for collaboration and shared resources.

Technology Spotlights and Audience Voting

The session concluded with technology spotlights from several innovative companies, followed by audience voting. The companies presented included Dyania Health, nCartes, Geno.me, Provider GPT by GenomOncology, and Health Universe. The audience selected Health Universe as the top organization, closely followed by Dyania Health. This interactive segment highlighted the community's interest in practical, impactful solutions that can advance healthcare delivery and patient outcomes.

Conclusion

The discussion underscored the dynamic nature of healthcare technology investments and the critical role of innovation in driving progress. By understanding current trends and the strategic priorities of leading cancer centers, stakeholders can better navigate the complexities of the healthcare landscape. The emphasis on AI, the need for a solid IT foundation, and the nuanced decision-making process between buying and building new solutions are all key considerations for future investments.

As the healthcare industry continues to evolve, staying informed about these trends will be essential for making strategic decisions that enhance patient care and operational efficiency. The ongoing dialogue between innovators, investors, and healthcare providers will be crucial in bringing new treatments and technologies to patients more quickly and effectively.

Healthcare Technology Investment Trends and Innovations: A Summary of Key Insights