Perspectives

After nearly two years of virtual conferences and Zoom-based panels, the 7wire team packed our bags and headed to Boston to learn, share ideas, and catch up with friends and colleagues in-person at HLTH 2021. Our team is still riding off the high from what turned out to be a busy, insightful, and eye-opening 72 hours!

After taking a week to decompress from the stimulation of in-person meetings, we reflected on HLTH 2021 and identified key takeaways from the event that we expect to be top of mind as our team looks ahead:

1. Healthcare’s talent gap is wider than ever – Virtually all industries are experiencing the consequences of “The Great Resignation” and digital health is no exception. Amplified by the widespread and climbing provider shortage and an increase in well-capitalized start-ups across the industry, companies are acutely experiencing a healthcare talent shortage for both clinical and non-clinical roles. As a result, early-stage startups are creatively seeking resources to meet talent demands, including offering hyper-competitive compensation packages or turning to solutions that extend the role of the care provider. Despite such efforts, there is still an unmet need for broader solutions to rapidly hire and staff clinical and non-clinical labor to support early-stage digital health organizational growth.
2. An influx of capital is setting a higher bar for exit expectations – As our partner Alyssa Jaffee noted during her conference session, while the influx in spending, especially in underserved markets, allows early stage companies to “swing for the fences”, it’s critical for companies to do the groundwork to ensure their structure and model can be successful in the long term. Additionally, as digital health gets bigger and the players get larger, exit value expectations will naturally follow, an important consideration for later stage startup CEOs. Looking ahead, it will be difficult for many high-valued early-stage companies to go public or realize significant upside without dramatic revenue acceleration. When a company is valued at $3 billion today, public investors must see significant upside to be interested.
3. Women’s health is finally on the main stage. Women’s health used to be a “niche” segment of the industry and as a result, a smaller track at conferences. This year, women’s health was finally put under a spotlight with key leaders, including Kate Ryder of Maven Clinic, taking center stage at this year’s event. Women’s health funding through Q3 2021 is already more than two times larger than the amount raised in the same time period in 2020, translating to the market finally recognizing the power and importance of investing in this segment of healthcare. With so many offerings now available, investors will have to ask, “what’s different” and “how will each scale”?
4. Focus on digital health engagement with underserved communities – Many digital health companies were originally built to service private pay, easier to access populations, but the events from the past nearly two years have reinforced the need and opportunity for digital health solutions to effectively engage underserved communities. As our Partner Robert Garber explored on Health Tech 4 Medicaid’s panel, patient engagement must address consumer needs holistically, considering behavioral health as well as physical health concerns. Several companies are gaining adoption in this sector as health plans and health systems are prioritizing hard-to-reach members, particularly companies that were purpose built for vulnerable populations including CityBlock and our portfolio company ConsejoSano.
5. The point solution fatigue is real – As Glen Tullman, 7wire Managing Partner and CEO of Transcarent highlighted, employers and their employees are overwhelmed with the number of solutions available today. Self-insured employers are increasingly offering multiple contracted solutions, each one aiming to deliver quality care, but most are siloed. Navigators are only adding to the confusion. Conversations throughout the conference stressed the need to consolidate offerings across platforms to drive solutions that more effectively integrate with consumer journeys. For example, our portfolio company Transcarent, a new health and care experience company for employees of self-insured employers, connects employees with unbiased information, trusted guidance, and easy access to high value care, all focused on what health consumers are asking for today. And fortunately, the market is responding strongly. The company also recently partnered with Walmart, allowing Transcarent Members to gain access to Walmart’s everyday low-pricing on medications and other services for the first time via their employer.
6. Movement Towards Innovative Business and Payment Models – Coming out of COVID, we’ve seen a shift in consumer-focused companies turning to B2B2C models and direct contracting with employers and health plans who have the greatest buying power. Likewise, companies have recognized the opportunity to capture additional revenue by engaging in value-based contracts, including shared savings, preferred provider pricing, or case rates. As companies consider making these shifts, it’s more important than ever to have the right champion and entry point when selling a digital solution. Not all points of contact are the same, even within the same organization, so companies much be selective when deciding how to enter these large entities to ensure success.
7. In-person events > Zoom events – And finally, nothing replaces in-person connection. The value from seeing people, and building relationships in real life is unlike any Zoom call. We’re grateful for the medical professionals, healthcare teams, front line workers, and HLTH conference organizers who made it possible for us to safely gather in Boston last week. We’re already counting down the days until HLTH 2022!

Missed us at HLTH but want to connect? Feel free to drop us a line here.