Blog

What Digital Health Is (and Isn’t)

Malay Gandhi
April 05, 2013

Digital health is not a new concept. Seth Frank, writing 13 years ago, penned “Digital Health Care—The convergence of health care and the Internet” in The Journal of Ambulatory Care Management. Today, technology is rapidly transforming healthcare. Eric Topol’s The Creative Destruction of Medicine enumerates how these digital technologies, social networking, mobile connectivity and bandwidth, increasing computing power and the data universe will converge with wireless sensors, genomics, imaging, and health information systems to creatively destroy medicine as we know it. He refers to this as digital medicine, or the digitization of human beings.

At Rock Health, we support entrepreneurs working in the space Topol describes—at the intersection of healthcare and technology; and not solely in medicine, but across healthcare, including wellness and administration. As part of our research, we track companies and catalog venture funding in the digital health space.

Defining digital health and choosing which companies to include is complex, so here is some transparency as to how we catalog deals:

Digital health companies

In our funding reports, we only include health companies that build and sell technologies—sometimes paired with a service, but only when the technology is, in and of itself, the service. This includes companies like:

  • Health Catalyst, which “provides a flexible, agile and late binding data warehouse platform that integrates data from source transactional systems” ultimately enabling automated reporting, population health management and reduction of waste and inefficiency
  • Sotera Wireless, which developed the ViSi Mobile System, a mobile vital signs monitoring device, “designed to keep clinicians connected to their patients, whether in or out of bed, or while in transport”
  • Omada Health, which “designs evidence-based online programs that inspire lifestyle change and prevent disease”, starting with its first product, Prevent, for pre-diabetics

Healthcare companies that aren’t digital

We exclude companies that are selling services (versus technology) from our summaries; companies like:

  • Access MediQuip, which manages benefits for implantable and specialty surgical device benefits and works with patients, providers, payers, and manufacturers to “deliver services that begin with preauthorization support and continue through billing and reimbursement”
  • xG Health, which spun-out from Geisinger Health System to provide services to healthcare provider organizations for population health management, encompassing consulting, analytics, and care management services (which includes “specially trained personnel”)
  • One Medical, which provides primary care through a set of brick-and-mortar physician offices and online tools

These companies are innovative, but we don’t include them in our funding reports, because they are selling labor-intensive services, not technology.

Deals under $2M

Besides these service companies, we also don’t include deals under $2 million in our funding reports. The reason is simple: there’s no systematic way to track all seed deals. Most are never filed with the SEC, and many are never reported in the press. We know this because many of Rock Health’s own portfolio companies have no public record of their seed financings, despite raising those rounds. We aim to be accurate, and know that it is simply not possible for smaller deals.

We take the tracking of this space seriously, and intentionally avoid any overstating or inflation of funding in digital health.  We hope you enjoy the reports and our data, and are always happy to answer questions regarding this work.