An Equity Analyst’s Take on Health 2.0 Trends To Watch in 2015

Health 2.0 recently had a chance to talk with Steven Wardell, an equity research analyst at Leerink Partners, ahead of his appearance at WinterTech to discuss themes he’s seeing in the digital health market and what he thinks will be the trends to watch in 2015. Hear more from Wardell and other investors from Rock Health, Canvas Venture Fund, GE Ventures, and Norwest Venture Partners on investing in consumer health at WinterTech on January 15th in San Francisco.

Health 2.0: Tell us about your role as an equity research analyst covering digital health at Leerink Partners.

Steven Wardell: One of the most exciting parts of my role is I get to interpret the growing digital health landscape for the investment community. Investors want to better understand the major trends in the sector and how they are creating winners and losers in healthcare.  They want to get a perspective on what the investment themes are and who the potential winners are. I’ve done deep industry research on digital health investment themes and I can help investors understand the themes and the companies that are benefiting from them.

Health 2.0: What are some of the digital health investment themes?

Steven Wardell:  I think that the digital health investment themes will be familiar to the Health 2.0 audience.  One of the most exciting themes is consumer empowerment. Consumers increasingly have control of healthcare dollars and healthcare enterprises are having to learn to serve the consumer and sell to the consumer.  We haven’t had consumerism in healthcare in the modern era, so the emergence of the healthcare consumer is a big change.

Another investment theme is healthcare automation. The healthcare sector has under-invested in automation in the past but there are signs that the healthcare sector will rapidly increase its adoption of automation technologies in the future because of automation supply side and demand side shocks. One example of a demand-side shock is that we have an aging population that will need more healthcare and will demand more personalized healthcare, which is a big challenge for the healthcare system to cope with.  And it’s clear that one of the ways the healthcare system can meet this challenge is through automating healthcare.

Another investment theme is connected health.  Connected health is healthcare that is delivered wherever the patient is and when the patient needs it (and not necessarily inside the four walls of a traditional provider organization).  Connected health often involves a connected digital device that generates a new health data stream and sends it from the patient to the provider.  There are many opportunities for connected health devices to enable higher quality healthcare and more cost-effective healthcare.

Another digital health investment theme is population health management. Healthcare reform is changing the basis of payment in our healthcare system from fee-for-service to fee-for-value.  And there is a big wave of new digitally-enabled population health management solutions that providing low-touch, cost-effective ways to maximize the health outcomes for populations.
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Health 2.0: What will be some consumer digital health trends to watch in 2015?

Steven Wardell: I think that in 2015 we’ll see a move to give wearables greater sensor capabilities and greater clinical value-add than the typical activity tracker of 2014. I think we’ll see sensors that can collect a greater variety of clinical data such as blood pressure, pulse rate and sleep metrics.

In addition, I think we’ll see online health media grow in importance to the public, especially on mobile devices and this will feed consumer empowerment in healthcare.  Consumers have shifted their attention decisively from offline channels to online channels and this is benefiting online health media and all online media as advertisers catch up.  I think we’ll see consumers relate to their health through their mobile devices in innovative ways in 2015 that we couldn’t have even imagined 2 years ago.

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