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Telehealth is driving a boom in digital communications

Recent data breaches in digital health platforms have raised awareness for privacy protection and questions over who is responsible.

The coronavirus pandemic has slowed the momentum in growth for the healthcare industry this year, but experts say COVID-19 has brought opportunities for healthcare startups to succeed and innovate.

In 2019, billions were invested in digital healthcare companies, with $7.4 billion invested across 359 deals, according to Rock Health, a venture fund for digital health. A strong first quarter showed 2020 would have continued on that trend, but the pandemic caused investors to slow down, according to a panel of industry experts who spoke on Industry Update and Market Trends for HIMSS20 Digital. Moderator Indu Subaiya is a cofounder of Health 2.0 and senior advisor for HIMSS.

Still, digital communication companies are thriving amidst a boom in telemedicine brought on by the pandemic, while companies such as Doctor on Demand are hiring more physicians to meet the surge in virtual care.

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Megan Zweig, director of research and marketing at Rock Health, said companies that strengthened during the recent period of growth are stepping up to challenges created by the pandemic.

"Without COVID, the story would have continued from last year as this was a healthy, growing space with a lot of momentum behind it," Zweig said. "I think that momentum has turned into just incredible urgency and demand for communication, testing, monitoring, care – all of those things done at a distance."

Zweig said $3.1 billion invested in 104 digital health companies at the start of this year indicates continued growth from 2019, a year that also saw Google purchase Fitbit. The pandemic has not caused all investors to stop funding healthcare companies, but that there are mixed feelings on how much capital will be available for startups this year, she said.

"A lot of them are still planning on deploying capital at the same rate they have in the past. Others said they are pulling back," Zweig said. "The vast majority of them do believe healthcare startups are going to have a harder time raising capital this year than in the past."

Zweig described the pandemic as a "stress test" for a healthcare system in which digital platforms had been strengthening in recent years.

Lawrence Byrd, technology evangelist for communications APIs for cloud-communications-provider Vonage, said many of Vonage's customers are telehealth providers. Many have seen 20 times their normal traffic in the last few weeks.

"We're seeing massive expansion of the use of telehealth, and I think it has gone very well," Byrd said.

Part of what has allowed digital health platforms to find success is the fact that many applications had already been designed to meet HIPAA privacy standards, according to Byrd.

Panelists said privacy has become a growing concern for people using digital platforms such as Zoom. Use of "off-the-shelf" products in the education field has led to privacy and security threats, Byrd said.

"Tele-industry, much more mature. We have the applications," Byrd said.

Many adequate applications for telemedicine already exist in doctors' offices, and, since they are generally built in the cloud, they are easy to expand.

Jumping into the race for innovation has not been easy for all companies during the pandemic.

Home-test companies like EverlyWell initially saw an opportunity to produce COVID-19 tests, according to Jonah Comstock, Editor-in-Chief and Director of Content Development with HIMSS Media. The Food and Drug Administration initially indicated it would relax restrictions on producing tests, but walked that back out of concern for unvetted tests hitting the market.

"Similar to telehealth, they saw sort of a time to shine," said Comstock, who said home-testing had otherwise begun to "arrive" before the pandemic. "This crisis is ultimately, once they work out all the kinks, is going to rush it into arriving even faster."

With growing use of digital medicine will come a debate about how companies should be held accountable for their products, holding vast storages of private healthcare data, according to Travis Holt, CEO and cofounder at BCP Tech, a division of Brush Creek Partners. Recent data breaches, such as the one at Equifax, have raised awareness among consumers for privacy protection.

Precedent has been set for companies selling digital products. For instance, the buyers of Microsoft Office 365 agree in the terms and conditions not to hold the company responsible for the product's use, he said. Holt expects the courts to decide in the next five or 10 years whether companies can similarly remove their liability when their products are used in sensitive industries such as healthcare.

"I think there's going to have to be some tragedy and then some subsequent litigation," Holt said. "As we dig into healthcare, which is a much more sensitive area, I think we're going to see a shift in the way that's perceived."

Max Sullivan is a freelance writer and reporter who, in addition to writing about healthcare, has covered business stories, municipal government, education and crime. Twitter: @maxsullivanlive maxesullivan@gmail.com 

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