3 reasons why digital health is gaining traction: $, $, $

Digital health refers to the application of information and communications technologies to improving human health. Examples include everything from electronic medical records (EMRs) to telemedicine to remote sensing to the analysis of big data. While some of these technologies have been around for over 50 years, there are three reasons why the industry is exploding: money, money and money.

Payer and employer money
Payers are desperate to reduce the costs of care and eliminate the 30 percent of healthcare expenditures that are wasted in the United States. Non-face-to-face care is a way not only to leverage an undersupply of doctors, but a way to reduce costs. EMRs and health information exchange eliminates redundancy. Remote sensing keeps people out of the hospital.

Investor money
Investors are moving from high-risk drugs and devices to less risky web-based digital health companies. Drugs take about 10 years and estimates of $1 billion to get to market. iPhone apps take $40,000 and 18 months to grow to potentially enormous valuations. Can you blame investors?

Reimbursement money
Doctors are finally being paid to use EMRs, iPhone apps, telemedicine technologies and data analytics to improve performance. Several states have mandated reimbursement parity for telemedicine visits compared to office-based visit E/M payments.

Understanding why digital health has reached a tipping point is not difficult to understand. Just follow the money.

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